On July 10, 2013, the Hong Kong Legislative Council moved to enable Hong Kong to enter into stand-alone Tax Information Exchange Agreements and, more importantly for U.S. persons who have financial accounts there, to sign an “intergovernmental agreement” (IGA) with the U.S. for implementation of the Foreign Account Tax Compliance Act (FATCA).
It is expected that the U.S. and Hong Kong will agree on an IGA, and that financial institutions in Hong Kong will begin to comply with FATCA’s due diligence and automatic disclosure provisions next year.
This is the central point of the article, and also the only part that has anything to do with Hong Kong; the rest is merely another regurgitation of general FATCA information we all know already, though it’s nice to see that he mentions “quiet disclosure” as an option for coming into compliance in benign cases.
However, the claim that this amendment has anything to do with automatic disclosure is incorrect, as an informed reading of its actual text reveals. Furthermore, a speech about the amendment by a key pro-Beijing legislator provides striking insight into the attitude of the Hong Kong government (and quite probably, the attitude of Beijing as well) towards demands for information exchange which go beyond OECD standards — and despite the fact the speech doesn’t mention FATCA by name, it casts doubt on the seemingly-authoritative declaration that “it is expected that the U.S. and Hong Kong will agree on an IGA”.