For those of us trying to make sense of FATCA and GATCA — the OECD CRS, this is a good read …
OECD CRS (Common Reporting Standard)
FURTHER GUIDANCE
|
Bloomberg BNA – September 26, 2016 “Finish Line Unclear for Some FATCA Pacts as Banks Worry”
Sept. 23 — A bumpy path may lie ahead for crucial agreements to ease the process for foreign banks to report their U.S.-owned accounts under a controversial law—even as IRS pressure grows for countries to get their pacts in force quickly.
Some countries face legal challenges to agreements under the Foreign Account Tax Compliance Act, while others may not be moving quickly. The lack of agreements in force is raising big concerns among global banks with operations in some jurisdictions that have fully functioning pacts and some that don’t.
…
The alternative—directly reporting individual accounts to the U.S. or potentially facing a 30 percent withholding tax—is a major concern for cross-border financial institutions as difficulties continue in countries that haven’t managed to get an IGA in legal force. According to Sept. 23 Treasury Department data, 113 countries have agreements, but 49 still need to reach the finish line.
…
Tax attorneys said the Organization for Economic Cooperation and Development’s common reporting standard may be draining energy and legislative resources in some jurisdictions. The CRS is a separate multinational system designed to allow financial information exchange across many borders.
More than 100 countries have signed on for that exchange. The U.S. can’t fully adopt the CRS because of legal challenges. Some of those 100 countries have implemented CRS statutes before finalizing FATCA agreements.
…
Even if banks want to register for direct reporting, in many cases they still face the legal prohibitions that led to the creation of IGAs, she said. In another challenge, financial institutions that have already made huge efforts to document all their U.S. accounts under their agreements would have to redocument them to comply with FATCA, said Ferris, now a financial services principal with Ernst & Young LLP.
etc.
Related:
New post — What will be the road ahead for OECD CRS and FATCA?
If Hillary Clinton gets elected FULL ON oppression in all areas particularly these areas not to mention WAR.
If Donald Trump gets elected they are OVER.
@Furious
Don’t bet on it. Our own PM and his minions had lots of negative things to say about FATCA, and now they love it. In the off chance Trump wins, don’t expect anything.
“The U.S. can’t fully adopt the CRS because of legal challenges.”
What? How can that be? What kind of tax evading traitor would challenge a law like that? Why do courts even give them the time of day?
I wouldn’t bet on Trump reversing this. I’ll give him my vote because they said they would do something about it. I know the dems want to double down on it. So they would be dead to me.
The political pundits are aligning that a win for Trump would spell the end of the GOP & the chance in 2020 of a serious change to the corrupt process. Assuming he doesn’t do anything outright horrible, like sell Manhattan to Putin, it might be a good thing after all….A win for HRC will be a lose-lose for everyone, it seems. Wth happened that both parties are so despicable?
REVOLVING DOOR keeps spinning:
“A lot of financial institutions are nervous about what they’ll do if countries get dropped off the list of IGAs,” said Tara Ferris, a former OECD adviser on automatic exchange of information. “They’re exploring what they can do in a worst-case scenario.”
Yes, THAT Tara!
PS:
“… said Ferris, now a financial services principal with Ernst & Young LLP.”
My Canadian MP, a Liberal, said she is against FATCA, but couldn’t answer me when I asked her why her government is still fighting us in court over it.
Fact is, had Canada not overlooked Canadian law, Canada would be in the same boat as many other nations and the US itself. Its ridiculous it’s gotten this far, yet we hear that FATCA’s “here to stay”. This is leading up to FATCA becoming one of America’s biggest boondoggles ever.
@not that Tara
Sounds as though Ferris was rewarded handsomely for her efforts in benefitting the compliance industry.
What is so mind boggling is that if the nations had held together, then a no to FATCA would have had to be accepted by America. because they need their banking partners too.
@not that Tara, re that ever-revolving door;
Another prime example;
http://isaacbrocksociety.ca/2013/02/01/jack-townsend-warnings-on-continued-government-patience-for-offshore-account-ostriches-13113/comment-page-2/#comment-978172
I miss seeing the familiar icons/monikers of some of our regulars. Glad to see you’re still checking in here!
One wonders how the US can stand up to international scrutiny re its banking industry while forcing FATCA on the rest of the globe. Our local NON-US tax revenue agencies and our NON-US accountholder fees are being abused to pay for compliance with extraterritorial US Treasury FATCA demands to sift through accounts held in financial and non-financial institutions entirely OUTSIDE the US boundaries and jurisdiction – yet WITHIN the US, US banks continue to misbehave egregiously:
ex.
“…Wells Fargo chief executive John Stumpf will forfeit $41m (£31.5m) in bonuses as the bank tries to deal with a scandal over its sales practices.
The bank is investigating how two million accounts were opened without customers’ permission…”….
http://www.bbc.com/news/business-37491982
“..As many as two million accounts were opened using fictitious or unauthorized information…”…..
http://www.wsj.com/articles/wells-fargo-board-actively-considering-executive-clawbacks-1474985652
Let us remember one of the glaring instances where US banks admitted laundering money for drug cartels:
http://www.bloomberg.com/news/articles/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal
http://www.alternet.org/economy/whats-wrong-wells-fargo
Will the House Oversight and Government Reform Committee FATCA-related hearing
( http://thehill.com/policy/finance/298130-lawmaker-seeks-to-investigate-obamas-foreign-tax-compliance-law ) recognize the gross and unjust inequity of the US maltreatment of ordinary people living legally and compliant with local laws and taxation where they ACTUALLY reside – outside the US – yet are actively treated extraterritorially by the US as guilty of crimes before the fact – with no evidence of wrongdoing, under FBAR and FATCA (except the ‘crime’ of banking legally locally and living and saving outside the US, like Baby Elle http://maplesandbox.ca/2016/baby-elles-fatca-letter/ http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/robertwood/2016/04/19/dear-president-obama-im-a-baby-not-a-tax-cheat/&refURL=https://www.google.ca/&referrer=https://www.google.ca/ ).
We are not moneylaunderingdruglordterrorfunders like those several US banks were happy to welcome as accountholders https://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs .
The US should get its own house in order before extorting the rest of the world under FATCA’s demonstrably false pretenses that ALL financial institutions anywhere in the vast globe outside the US (and many unrelated NON-financial ones) and their local accountholders are criminals or criminals in waiting hiding money from the US. It is not our financial institutions trying to suppress reports and subvert the law like HSBC US https://www.rt.com/op-edge/330781-drug-smuggling-hsbc-crimes/ .
The revolving door and cosy relationship between the US Treasury and US banks continues;
Ex. ‘ Treasury Dept. financial crimes director to join HSBC despite Mexican drug money taint – report’
27 Apr, 2016
The Treasury Department’s top anti-money laundering official is reportedly taking a top seat at HSBC, a bank struggling to cope with a record $1.9 billion settlement with the US government in a case involving a Mexican drug cartel and financial fraud.
Jennifer Shasky Calvery, the director of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), is going to officially step down on May 27, nearly four years after she took the post in 2012, Reuters reported. She also used to serve as federal prosecutor, leading the department’s anti-money laundering unit.
“I hope that we have enhanced the agency’s solid foundation so that FinCEN can best perform its mission for years into the future,” Shasky said in a press release..”
https://www.rt.com/usa/341064-treasury-official-hsbc-laundering/
https://www.guardian.co.tt/news/2016-09-27/december-31-deadline-fatca%E2%80%88compliance
Trinidad & Tobago has now been given until 31st December by the IRS to go back to its room and think about it!
@Don
Meanwhile Canada will have reported for two years by then. What a bunch of chumps here!
@Bubblebustin – It just goes to show if the Mouse (Trinidad) can roar, then certainly a Canadian Polar Bear could have done the same and more effectively. Canada had and still has the power to make FATCA more difficult for the US.
The good news is the US House of Representatives are about to approve the Justice Against Sponsors of Terrorism Act (JASTA) bill for yet another nail in the US dollar’s reserve status coffin. The BRICs and other are looking for an alternative and the RMB will be the natural contender.
FATCA will be significantly weakened if that happens especially if Trump decides to make Saudi and others pay for their own defense. Without the US subsidiary why would they need the US dollar in the same way?
“Don’t bet on it. Our own PM and his minions had lots of negative things to say about FATCA, and now they love it. In the off chance Trump wins, don’t expect anything.”
“I wouldn’t bet on Trump reversing this. I’ll give him my vote because they said they would do something about it. I know the dems want to double down on it. So they would be dead to me.”
I agree with Jack Spratt and Neill on this. I wouldn’t expect Trump to do a damned thing other than to lie out his teeth with regards to FATCA; just like everything else. He says that he’s going to make the other countries pay for the “protection” that they receive from the United States. What better way to do it than to continue the FATCA oppression?
US employees of JP Morgan have been in Switzerland recently trying to entice banks to move the probably illicit money to the US. The Blick newspaper reports: “The Americans, however, enjoy a legal vacuum because Washington has not ratified the automatic exchange of information. In addition, the practice offered corresponds exactly to those maneuvers, which the US has convicted Swiss banks of in recent years.”
A Google translation of the Blick article:
https://translate.google.com/translate?sl=de&tl=en&js=y&prev=_t&hl=de&ie=UTF-8&u=http%3A%2F%2Fwww.blick.ch%2Fnews%2Fschweiz%2Fregelverstoss-von-j-p-morgan-chase-us-bank-wirbt-in-der-schweiz-um-schwarzgeld-id5528078.html&edit-text=
Switzerland should expel the US ambassador.
(Canada should too, but we already know that.)
Too complex for me, but looks useful.
Another murky area between FATCA and the CRS:
http://www.lexology.com/library/detail.aspx?g=0221f080-4376-4726-bfb1-87923fddf402
‘Trust protectors: reportable under CRS, but not under FATCA’
Kozusko Harris Duncan
USA October 20 2016
“….The Foreign Account Tax Compliance Act (FATCA) does not require reporting of US protectors who are not otherwise beneficiaries or settlors of the trust. In contrast, under the CRS, protectors will now be reported to their country of tax residence…”………..
……….”It is unfortunate that the CRS requires disclosure of trust protectors who contributed no money to the trust, have no beneficial interest in the trust (the terms of which may even expressly prohibit the protector from benefiting) and have no effective control over the trust. CRS reporting may discourage individuals from accepting the role of protector, to the detriment of families creating modern, healthy governance structures for the trusts they create. Perhaps the taxing authorities receiving the information will merely note that they have no taxing interest in the protector and file that information away. Alternatively, time and resources may be wasted making useless inquiries based on the CRS report. Perhaps more troubling, there is also a risk that corrupt government employees may attempt to use or disclose confidential information gained in the course of their employment for personal financial gain. In its introduction to the CRS, the OECD remarked that countries have a shared interest in maintaining the integrity of their tax systems. Hopefully, countries receiving information under CRS take this admonition seriously. Collecting information on protectors who have no personal tax liability or tax reporting obligations with respect to the trust assets they have agreed to safeguard does nothing to further the fight against tax evasion or strengthen the integrity of tax systems. But it appears that this information collection is here to stay.”
I copied this into a file a few days ago, badger, intending to try to make sense of it in a more thorough read. It is, though, too complex for me to understand. My interest is in our Canadian registered accounts (specifically for me, the RDSP) which are considered trusts and must be reported as such to the IRS on Forms 3520 and 3520A and, of course, referred to on FATCA reporting form 8938. There are in Canada also trusts designated discretionary (like the Henson Trust: http://advisors.td.com/public/projectfiles/5f0c9574-effc-40fc-b342-a717acff47ec.pdf). I know it will be to my benefits (and that of others) to understand what all of this means for those deemed US citizens / persons.
Thanks, as always, for all you find and present here!
I cannot figure out what this means:
“Remarkably, every G20 country has agreed to implement the standard except for the U.S., which has opted to maintain FATCA as its framework for AEOI. In contrast, the U.K. has plans to abandon its UK FATCA and transition its Intergovernmental Agreements (IGAs) to the CRS framework.”
http://sovos.com/blog/tax-transparency-g20-international-collaboration-combatting-evasion/
I believe it’s correct that CDOT (UK FATCA) is or was being phased out. It’s all being wrapped up in DACS/CRS, I think. Or it was. No idea how Brexit might affect things.
And perhaps the IGAs referred to are the CDOT IGAs – not the US-UK FATCA IGA.
@iota: I actually think the little grey matter I had left just abandoned me. There is NO way FATCA & CRS can co-exist.
https://www.pwc.com/us/en/financial-services/publications/fatca-publications/assets/fatca-interaction.pdf
I’m having trouble discerning this exchange re the Sovos article. (Maybe nothing has changed and I’m just confused…as usual):
Haydon Perryman @haydonperryman 6h6 hours ago
@wisecroneknows Yes, the #CRS is based on residency and is, reciprocal. Yes, UK #CDOT, after 2017 reporting, is superseded by the CRS.
wisecroneknows @wisecroneknows 5h5 hours ago
@haydonperryman UK will abandon #FATCA IGA & report based on residency? Will not report 2 nations that do NOT reciprocate, only promise to?
Haydon Perryman @haydonperryman 3h3 hours ago
@wisecroneknows Nope. We in the UK can only marvel at the US’s taxation without representation and wonder from where they got such an idea.