Liberty and justice for all United States persons abroad

US rules “won’t work”

“The proposed approaches across the globe simply won’t work. They won’t mesh. They won’t interact. They will cause conflicts,” Pearson said at the meeting. “Washington, we have a problem,” he said.
Business Week

Patrick Pearson, a European Commission official, warned that many of the US rules “won’t work”.
The Financial Times

European hedge funds face arguably the worst – whether to break their local rules or those in the US. The way new OTC trading rules in each jurisdiction are written, it appears they will be subject to both, but will only be able to comply with one or the other… “If you put a European hedge fund in a situation where it has to choose between complying with US or European rules, it may avoid the swap transaction altogether because it will not want to risk being non-compliant,” says Wayne Pestone, chief regulatory officer at FXall in Washington, DC. “Putting hedge funds in this position just doesn’t make any sense.”
Risk.net

There is a lack of clarity on the various steps that need to be taken and the delays in implementation have led to further confusion. Imposing additional overseas (i.e., US) rules could be duplicative and also lead to jurisdictional conflicts. Non-US regulators may also be concerned about such an approach. Cost could be another important factor.
CPI Financial

The US Foreign Account Tax Compliance Act (FATCA) has been described as “a kind of US backward imperialism”
Guardian

FATCA Act could violate American banks… “there is concern about possible violations to the American legal orders (bank secrecy, taxation, consumer protection) with the implementation of the law”
Noticieros Televisa

This is only a bit of many recent news articles that I quickly put together in a few minutes.  More stateside Americans seriously need to spend more time reading international media!

5 thoughts on “US rules “won’t work”

  1. Some Brocker’s may note the the FATCA coverage that’s thus far been lacking in Mexico until now in Noticieros Televisa

    Unfortunately I don’t read Spanish to know what the article covers, but I know that Mexico has been trying to get the US to share its citizens account information for some time. As the US being Mexico’s premier haven for Mexican drug money, FATCA reciprocity with Mexico won’t fly too easily with USFI’s I would guess.

  2. @bubblebustin, Thanks for the link to the article. It only mentions the concerns of Latin American banks, not of immigrants in the US with bank accounts in their countries of origin, nor of US citizens living in Latin America.

    I manually translated the article below, but in the future you can also try Google Translate, it works pretty well for most European languages.

    FATCA law might damage Latin American banks

    The law seeks that worldwide financial institutions inform to the Tax Service [IRS] about the accounts with more than 50 thousand dollars

    Lima, Peru, Nov. 7, 2012. The Latin American Federation of Banks (Felaban) expressed its concerns over the possible infringement of its legal ordinances with the implementation of the United States FATCA law, which demands the report of bank accounts of its citizens abroad.

    The law, called FATCA in its acronym in English (Foreign Account Tax Compliance Act), seeks that financial institutions worldwide inform to the United States Tax Service [IRS] about the accounts with more than 50,000 dollars of its citizens abroad.

    The president of Felaban, Oscar Rivera, said that this entity supports in principle the general goals of the law, with regards to preventing tax evasion, promoting financial transparency and the ultimate effect that this may bring to the efforts to prevent money laundering.

    However, “there are concerns for the possible infringement of Latin American legal ordinances (bank secrecy, taxation, consumers’ rights) with the implementation of the law”, he remarked in a press conference.

    Rivera added that this subject will be discussed during the meeting of Felaban’s governors, who will meet in Lima on the occasion of its 46th Annual Assembly from November 17 to 20.

    The meeting of governors will propose assessing the possibility of establishing paths to cooperation to avoid violation of the internal legal restrictions in each country and the burden that this would have on the Latin American banking sector.

  3. @shadowraider

    I have to give Swisspinoy credit for that link. The article is early FATCA learning curve stuff. Thanks for the translation info!

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