FATCA did make it so to speak as an issue to do something about.
From the recommendations:
The Canadian Bankers Association highlighted that the U.S. Foreign Account Tax Compliance Act applies to Canadian financial institutions and account holders. In its view, future trade agreements concluded by Canada should prohibit the extra-territorial application of foreign laws to Canadian financial institutions.
I believe Eric may have already touched upon this but it appears as if it has now been picked up by Reuters.
http://www.reuters.com/article/2012/11/28/us-asia-regulation-china-idUSBRE8AR0N720121128
It may be worthwhile for those of you in touche with Kevin Shoom to forward this article to him.
“China’s banking and tax laws and regulations do not allow Chinese financial institutions to comply with FATCA directly.” Liu said. He emphasized those were his views and not necessarily the opinions of the central bank or the Chinese government.
The law will only slightly increase U.S. tax revenues, Liu said. “One estimate says FATCA covers less than 2 percent of U.S. tax payers and would bring extra revenue of only $8bln over 10 years, he said.”
Liu was giving a speech on the foreign impact of financial regulation. He also noted the challenges posed to foreign banks by some of the regulation contained in the U.S. Dodd-Frank Act, such as the Volcker Rule. The rule bans banks from engaging in proprietary trading and will apply to many foreign banks if they have a branch in the U.S.
“The Volcker Rule seems to be intentionally designed to apply to a broad range of foreign institutions in order to level the playing field for U.S. entities subject to the rule.”
Interesting Ed and Ethan podcast. I actually think they did an okay job of trying to explain FATCA as best as one can in layman’s terms. You have to skip over the first part where they discuss Blaze’s “friend” mayor Joe Fontana of London, Ontario (as of today now arrested on corruption charges).
In general we need more of this and that is why I wanted to give it honorable mention. I would also send a message to them indicating your interest in the topic and some of your own thoughts. Hopefully they will cover the issue again in the future.
Wow, they got a really BIG and I mean BIG country to sign on.
http://www.fsitaxposts.com/wp-content/uploads/2012/11/US-Denmark-IGA-model-1.pdf
Agreement is very similar to that of the UK except:
1. Small Financial Institutions with Local Client Base
A Danish Financial Institution that meets all of the following requirements:
a. The Financial Institution must be licensed and regulated under the laws of Denmark;
b. The Financial Institution must have no fixed place of business out-side Denmark;
c. The Financial Institution must not solicit account holders outside Denmark. For this purpose, a Financial Institution shall not be consid-ered to have solicited account holders outside of Denmark merely be-cause it operates a website, provided that the website does not specifi-cally indicate that the Financial Institution provides accounts or ser-vices to nonresidents or otherwise target or solicit U.S. customers;
d. The Financial Institution must be required under the tax laws of Denmark to perform either information reporting or withholding of tax with respect to accounts held by residents of Denmark;
e. At least 98 percent of the accounts by value provided by the Finan-cial Institution must be held by residents (including residents that are entities) of Denmark or another Member State of the European Union;
f. Subject to subparagraph 1(g), below, beginning on January 1, 2014, the Financial Institution does not maintain accounts for (i) any Speci-fied U.S. Person who is not a resident of Denmark (including a U.S. Person that was a resident of Denmark when the account was opened but subsequently ceases to be a resident of Denmark), (ii) a Nonpartic-ipating Financial Institution, or (iii) any Passive NFFE with Control-ling Persons who are U.S. citizens or residents;
g. On or before January 1, 2014, the Financial Institution must im-plement policies and procedures to monitor whether it provides any account held by a person described in subparagraph 1(f), and if such an account is discovered, the Financial Institution must report such ac-count as though the Financial Institution were a Reporting Danish Fi-nancial Institution or close such account;
h. With respect to each account that is held by an individual who is not a resident of Denmark or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and pro-cedures described in subparagraph 1(g), above, the Financial Institu-tion must review those accounts in accordance with the procedures de-scribed in Annex I applicable to Preexisting Accounts to identify any U.S. Reportable Account or account held by a Nonparticipating Finan-cial Institution, and must close any such accounts that were identified, or report on such accounts as though the Financial Institution were a Reporting Danish Financial Institution;
i. Each Related Entity of the Financial Institution must be incorpo-rated or organized in Denmark and must meet the requirements set forth in this paragraph; and 33
j. The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified U.S. Persons and who are residents of Denmark.
In one regard this announcement is relatively good news as I have had suspiscions they were intending to make announcement at the end that they signed with 50+ countries. Instead it looks like they are going out with announcements in dribs and drabs. It is still in my opinion weird for Denmark to be signing prior to lets say Germany.
This is pretty pathetic but I wanted to post it.
http://www.fco.gov.uk/resources/en/pdf/3706546/594588382/716347982/TrEmUSANo12012FACTA
I don’t know if I can say anything else at the moment it is a very poorly written document basically competely focused on the problems facing financial institutions.
US and China could play “fiscal chicken” under FATCA
This month the IRS released a list of 50 countries that are on the road to signing an IGA – either finalising models for IGAs, engaged in dialogue for pursuing an IGA or conducting initial negotiations. China was not on the list as being at any level of negotiation with the IRS. This is significant, according to Dan Niedle, a London-based tax partner at law firm Clifford Chance.
“The interesting question about the list is who’s not on it at all. And China is the obvious one,” he says. “There are lots of rumours. Early on it was reported that China might just ban its financial institutions from taking part and dare the US to impose withholding taxes.”
Again this re-iterates the need for Canada and other countries not to enter into IGA’s.
I am temporarily suspending wall of shame inductions but I think the following blog post is rather interesting. Ann Hollingshead and the Task Force for Financial Integrity & Economic Development have been big FATCA supporters for many years whom I sparred with back in the early days of Brock. At one time she was also critic of Jim Flaherty for as she put it interferring with the soveriegn right of the US to make its own tax policies. Clearly she knows about our criticism and has been stung by it(She in fact singles out American Citizens Abroad for as she puts it hyperbole). I think this might be a wonderful opportunity to bring our criticism back home to her and let her know about our latest activities. (The actually point of the blog post is to say how great the IGA’s are).
A Strong, Sustainable, Future for FATCA and Tax Compliance.
Perhaps communism isn’t so bad after all.
The Treasury Department has already concluded a bilateral agreement with the United Kingdom. Additional jurisdictions with which Treasury is in the process of finalizing an intergovernmental agreement and with which Treasury hopes to conclude negotiations by year end include: France, Germany, Italy, Spain, Japan, Switzerland, Canada, Denmark, Finland, Guernsey, Ireland, Isle of Man, Jersey, Mexico, the Netherlands, and Norway.
Jurisdictions with which Treasury is actively engaged in a dialogue towards concluding an intergovernmental agreement include: Argentina, Australia, Belgium, the Cayman Islands, Cyprus, Estonia, Hungary, Israel, Korea, Liechtenstein, Malaysia, Malta, New Zealand, the Slovak Republic, Singapore, and Sweden. Treasury expects to be able to conclude negotiations with several of these jurisdictions by year end.
The jurisdictions with which Treasury is working to explore options for intergovernmental engagement include: Bermuda, Brazil, the British Virgin Islands, Chile, the Czech Republic, Gibraltar, India, Lebanon, Luxembourg, Romania, Russia, Seychelles, Sint Maarten, Slovenia, and South Africa.
No China or Hong Kong
Brazil is a bit of a surprise that it on the list along with Russia.
http://www.georgemasonjicl.org/fall-2012-symposium/
No videos but interesting picture summary. The guests were not at each others throats at least from appearances as I might have expected. Jatras and Eggert even appeared together at the end to have picture taken with the just the two of them.
http://www.georgemasonjicl.org/fall-2012-symposium-pictures/
Also a link to the presentations:
http://www.georgemasonjicl.org/wp-content/uploads/2012/09/CLE-Materials-Final.pdf
I am considering doing my own PowerPoint presentation on this issue for anyone who has to speak at these conferences against FATCA because I think I can do one ten times as better as any of the pro-FATCA people can. I have to say just from reading the presentations of the second group of panelists who were mainly compliance “consultants” I cannot say I was overly impressed. I think in general a lot of issues I discuss frequently were never really brought up.
I also took with interest one of the presentations by the second panel that expected the final rules to be release by October 31st. Clearly this has not been the case. In fact none other than Jesse Eggert announced at least from what I understood at other conference just two days later that the final rules were not being released until the end of the year. I am curious whether there was any mention of this at the GMU conference.
Its official. Daily Kos has a thread on FATCA started by poster “War on Error.” I have always hated Daily Kos so I am quite thrilled I can now go after them on FATCA. I think “War on Error” seems pretty set in his pro-FATCA ways so my suggestion is to give “War on Error” a John Baird/Peter Van Loan tire iron sandwich. Others I suspect Just Me for example will be advocating more of a “compromise” position. In general even if “War on Error” doesn’t generate a lot of hits the more we comment the higher it will climb on the Daily Kos most commented posts section.
http://www.dailykos.com/story/2012/11/05/1156301/-FATCA-One-Big-Reason-Why-Mitt-Hopes-He-Wins
