Funds Europe reports on the decision by UTI International (Singapore) to “remove” its American investors because of FATCA’s compliance burden:
http://www.funds-europe.com/news/13346-we-had-to-exit-americans-because-of-fatca-uti-international
UTI International (Singapore) chief executive officer Praveen Jagwani says the asset manager had to remove American investors because of the compliance burden Foreign Account Tax Compliance Act (Fatca) brings.
The regulation requires financial institutions to use enhanced due diligence to identify US citizens that have invested in either non-US financial accounts or non-US entities.
Fatca, which will become effective this year, was launched with the intention to keep US citizens from hiding income. Asset managers face severe consequences if they fail to enter an agreement with the Internal Revenue Service.
The intent behind Fatca is to keep US persons from hiding income and assets overseas.
Speaking at a recent Funds Global Asia roundtable in Singapore, Jagwani says Fatca is the single most difficult act of regulation for the asset management industry.
“We offer a Guernsey-domiciled Indian equity fund and because of six American investors, our compliance cost has gone up significantly,” Jagwani says.
“In order not to penalise the remaining investors, we have unfortunately had to decide to exit the American investors.”
UTI International is a subsidiary of one of India’s largest asset managers, UTI Asset Management Company.
Margaret Harwood-Jones, managing director and global head of investors and intermediaries, Standard Chartered, another roundtable participant, says there is no place in the world where businesses can hide from the impact of any foreign regulation.
“Even when it is only half a dozen investors buried somewhere in a particular fund, they have to be fully identified and properly treated in order to comply with Fatca,” Harwood-Jones says. “The obligation to report, to comply with the plethora of new regulation is important yet onerous indeed.”
In the end the USG will receive very little money, bad publicity and resentment, but not significant $.
Ex-pats with real money are renouncing, as per Alison’s podcast, the clever ex-pats with money can get around FATCA, if you’re poor abroad you’re still poor so there’s nothing there, and the middle classes, if they don’t renounce, have the tax credits to offset any liability, if they bother to file at all.
Make the IRS work for it. They simple don’t have the resources to cope with ex-pats across over 200 legal systems.
Inside the US, the IRS depends upon a system to easily put liens on people’s property or take money out of their paycheck. These methods won’t be available.
Just scary letters and a long drag out legal process in the 6 countries stupid enough to sign a mutual collection assistance agreement.
When the world wakes up to this properly, the push back will begin.
@Don, I agree that the push back will really get going once the world wakes up. It is pretty big pushback even now, and I bet most people haven’t heard of FATCA (and if they have they haven’t figured out what it REALLY means). This is why our government has been trying so desperately to push this through parliament in the stealth of the night…the wimps. Notice that the IGA was announced very quietly in an obscure shoe store just days before the Olympics started. Too bad Flaherty hadn’t come up to Ottawa Trailers again…lol….Atticus and I would have had a go at him.
@WhiteKat – I hope the legal challenges ends up finding the IGA breaks the Charter and sends the issue right back to Parliament Hill forcing MPs to pass discriminatory legislation.
Carl Levin and Company have to be made to understand the US isn’t what it used to be, and FATCA will not stand.
The banks will be their best publicity when they try to pry information out of customers to determine if they’re a ‘US Person’ or not.
The why to overload the bank’s system is to encourage everyone not to answer these question whether they qualify as a ‘US Person’ or not.
It would be a nightmare for the banks, half the cases real, half suspect. We need to cause disruption, annoyance, anger across the system.
The why to overload the bank’s system is to encourage everyone not to answer these question whether they qualify as a ‘US Person’ or not.
YES should be our number 1 priority. People could also call and and have a forceful angry discussion with any bank manager (not your own obviously) that you will sue and also hold them personally responsible for any losses or violations of your charter rights. Set your outgoing dialing to ‘private’ number and phone and be firm while being careful not to say anything illegal. I would like to see hundreds of us do this once a day to to create noise and stress for these bankster’s and the traitorous Canadian Banking Association. We need to get busy and make lots of noise and stop the debating and whining constantly. We need to fight them instead proactively. We are fighting for our lives here and are now warriors like Isaac Brock was. He saved our country. Will his disciples do the same? He was a hero, we are hero’s as well no matter what the outcome, NOT criminals
@Deckard….
Your link to the UTI International is NOT working…
This works.
@Just Me
Thanks – I fixed the banner link.
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Even if a weakening US will not be able to cope with the implications and workload of FATCA, as we all hope, it will leave the ideas and mechanisms for a more sinister world power to impliment down the track.
@Gordian, exactly what I fear for the long-term: if not the US, then perhaps China! In fact, if GATCA becomes the norm in Europe, I wouldn’t be at all surprised if more countries (such as the EU) adopted citizenship-based taxation like the US as a means of having more control of their citizens.
I could see things going either way….we’re on the verge of hopeful reform though I fear that Voldemort may be ushering us into a new Dark Age of Orwellian surveillance and controls…mobility could be greatly reduced so that the vast bulk of the world’s population even in Europe and North America will be reduced to serfdom. Only the super rich will continue to enjoy mobility and the super poor with no assets whom they can continue to exploit because the middle class as we knew it will be disappearing.
A filthy rich 2-5‰ and a HUGE exploited underclass who won’t ever be able to retire or even get on the property market; life will be cheapened rather like with the exploited, desperately poor miners in the Diomand mines of Congo…