William Byrnes' Tax, Wealth, and Risk Intelligence

(Updated as of 19:00 EDT June 25, 2014, FFI #s updated June 26 with Haydon Perryman, Director of Compliance Solutions, Strevus)

FATCA FACTS

IGAs: 83 (72,034 FFI/branches)

Model 1: 74 (57,492 FFI/branches)

Model 2: 9 (13,834 FFI/branches)

Non-IGAs: 250 – 83 = 167 (5,212 FFI/branches)

Registered: 77,353 FFI/branches from 205 countries/jurisdictions

Approximately 25% (19,046) of the currently 77,353 registered FFIs are impacted by the FFI agreement changes, including FFIs registrations from the current nine Model 2 countries/jurisdictions and the FFI registrations from the 123 countries/jurisdictions without an IGA.

77,353 financial institutions and their branches registered from 205 countries and jurisdictions, of a total of 250 countries and jurisdictions recognized by the USA.  45 countries / jurisdictions do not yet have any FFI registrations. One of these 45 countries, Kosovo, has an IGA.

Of the total FFIs registered, 72,141 FFIs (93%) registered from the 83 countries/jurisdictions that as of June 25^th (at 19:00 EDT) have an IGA.  57,492 FFIs registered from Model I IGA jurisdictions probably most as a category of a Model 1 Deemed Compliant FFI or as a branch.  13,834 (18%) of FFIs registered as Model 2 reporting FFIs or branches.  These 13,834 Model 2 FFI registrations are impacted by the FFI Agreement changes of June 24, 2014.

Non IGA Registrations (Participating FFI and other)

The 5,212 FFIs registered either as Participating FFIs or branches from the remaining 123 countries/jurisdictions (without an IGA) currently are also impacted (note that while there are 83 IGAs as of today, no FFI registered from Kosovo as of the June 2^nd GIIN list, thus it is 205 subtracting 82 IGAs).

30% FATCA Withholding Begins July 1st

Meanwhile, 30% withholding on all withholdable payments to nonparticipating FFIs in the 167 non-IGA countries/jurisdictions begins three business days from today, on July 1^st. Most commentators expect a rush of over 300,000 FFI registrations by the end of 2014.  Some predict more than a half million entities must still register, based on the UK’s HMRC estimate that 75,000 entities are impacted by FATCA within the United Kingdom (where less than 6,300 are currently registered on the GIIN list). Withholding on IGA jurisdiction non-compliant FFIs only begins January 1st.

Model 2 IGAs – 9 (13,834 FFI Registered)

1. Armenia (5-8-2014): 28
2. Austria (4-29-2014): 2,979
3. Bermuda (12-19-2013): 1,243
4. Chile (3-5-2014): 325
5. Hong Kong (5-9-2014): 1.540
6. Japan (6-11-2013): 3,252
7. Paraguay (6-6-2014): 17
8. Switzerland (2-14-2013): 4,041
9. Taiwan: 409

Below is a selection of the 77,353 registered from 119 of the total 205 countries and jurisdictions on the June 2nd GIIN list.

1. Afghanistan: 7
2. Andorra: 34
3. Anguilla: 71
4. Antigua & Barbuda: 36
5. Argentina: 270
6. Armenia: 28 <– IGA
7. Aruba: 14
8. Australia: 1,865 <– IGA
9. Austria: 2,979
10. Azerbaijan: 17 <– IGA
11. Bahamas: 611  <– IGA
12. Barbados: 124  <– IGA
13. Belgium: 250  <– IGA
14. Belarus: 65
15. Belize: 123
16. Bermuda: 1,243
17. Brazil: 2,259  <– IGA
18. Bulgaria: 73
19. BVI: 1,838  <– IGA
20. Canada: 2,265  <– IGA
21. Cayman Islands: 14,837  <– IGA
22. China: 212
23. Christmas Island: 1
24. Colombia: 173  <– IGA
25. Comoros Is.: 1
26. Costa Rica: 123  <– IGA
27. Cook Is.: 73
28. Croatia: 51  <– IGA
29. Curacao: 174  <– IGA
30. Cyprus: 280  <– IGA
31. Czech Republic: 93  <– IGA
32. Denmark: 187  <– IGA
33. Djibouti: 1
34. Dominica: 17 <– IGA
35. Dominican Republic: 68
36. Ecuador: 22
37. Egypt: 63
38. Equatorial Guinea: 1
39. Estonia: 27  <– IGA
40. Falkland Islands: 1
41. Finland: 467  <– IGA
42. France: 2,290  <– IGA
43. French Southern Territories: 1
44. Georgia: 24  <– IGA
45. Germany: 2,555  <– IGA
46. Gibraltar: 97  <– IGA
47. Greece: 92
48. Greenland: 1
49. Grenada: 32
50. Guadeloupe: 1
51. Guam: 3
52. Guatemala: 76
53. Guernsey: 2,396  <– IGA
54. Honduras: 48  <– IGA
55. Hong Kong: 1,540 <– IGA
56. Hungary: 102  <– IGA
57. Iceland: 5
58. India: 247  <– IGA
59. Indonesia: 308 <– IGA
60. Ireland: 1,757  <– IGA
61. Isle of Man: 313  <– IGA
62. Israel: 322 <– IGA
63. Italy: 457  <– IGA
64. Jamaica: 42 <– IGA
65. Japan: 3,252  <– IGA
66. Jersey: 1,619  <– IGA
67. North Korea: 4
68. South Korea: 397
69. Kuwait: 78
70. Latvia: 41
71. Lichtenstein: 240  <– IGA
72. Lithuania: 22 <– IGA
73. Luxembourg: 3,561 <– IGA
74. Macao: 37
75. Malta: 236  <– IGA
76. Mauritius: 728  <– IGA
77. Mexico: 419  <– IGA
78. Monaco: 99
79. Netherlands: 2,054  <– IGA
80. New Zealand: 335  <– IGA
81. Norway: 313  <– IGA
82. Other: 23
83. Panama: 451  <– IGA
84. Paraguay: 17   <– IGA
85. Peru: 165  <– IGA
86. Poland: 165  <– IGA
87. Portugal: 256  <– IGA
88. Qatar: 47  <– IGA
89. Romania: 110 <– IGA
90. Russia: 515
91. Saint Pierre & Miquelon: 1
92. San Marino: 15
93. Saudi Arabia: 18 <–IGA
94. Seychelles: 38  <– IGA
95. Singapore: 784  <– IGA
96. South Africa: 318  <– IGA
97. Spain: 1,188  <– IGA
98. Slovakia: 55  <– IGA
99. Slovenia:  21  <– IGA
100. St Kitts & Nevis: 71 <– IGA
101. St Lucia: 61  <– IGA
102. St. Vincent and the Grenadines: 105  <– IGA
103. Sweden: 313  <– IGA
104. Switzerland: 4,041  <– IGA
105. Taiwan: 409 <- IGA
106. Thailand: 768 <-IGA
107. Timor-Leste: 1
108. Togo: 4
109. Tonga: 1
110. Turkey: 66  <– IGA
111. Turkmenistan: 1   <-– IGA
112. Turks & Caicos: 28  <– IGA
113. Ukraine: 106
114. United Arab Emirates: 136  <– IGA
115. United Kingdom: 6,264  <– IGA
116. USA: 563
117. Uruguay: 132
118. Venezuela: 30
119. Wallis & Fortuna: 1

FFI Registration Among Model 1 IGAs and the Rest

Of a possible 250 countries and jurisdictions recognized by the US State Department and IRS (not including the 14 US dependencies for which FATCA withholding does not apply), 45 do not yet have an FFI registration.  But of the 205 countries and jurisdictions with FFI registrations, 20% of the total registered FFIs are Cayman Islands firms (14,837) (see my article of June 8). 

There is not one reliable number of how many financial entities in the world qualify as a financial institution requiring FATCA registration.  The list of FFIs requiring registration includes, by example, trusts companies, certain trusts, life insurance companies, investment funds, banks.  The IRS has said that “At this time, the full FFI list is expected to be less than 500,000 records.”

Some financial pundits are estimating as many as twice this figure.  Yet it seems that the categories of ‘certified deemed compliant’ FFIs and exempt FFIs should soak up a number of small, local FFIs.  Yet,  the UK Revenue HMRC estimates 75,000 of its FFIs are impacted by FATCA (http://www.hmrc.gov.uk/fatca/itc-regs-2013.pdf – page 4) (down from 300,000 prior to the UK-USA IGA).   If the UK, as one albeit important financial center, requires anything close to 75,000 FFI registrations, then the IRS figure of 500,000 FFI registrations is far too low.  Note that the ‘500,000’ FFI figure, if it excludes the corresponding branch registrations in other jurisdictions, and if it excludes the five classifications of “Certified Deemed Compliant”, seems more realistic.

BRIC Registration

Brazil leads the BRIC countries with 2,258 FFI registered, followed by Russia (515), India (247) with China only having 212.

NAFTA Registrations

2,265 FFIs registered from Canada and Mexico at 419.

Major OECD Countries Registrations

The United Kingdom (6,264) Revenue has recently announced that it will not adopt the IRS issued six-month extension (until December 31, 2014) for entity accounts (see my articles of May 5^th and 2^nd).  Thus, from July 1st, UK FFIs must document all personal and entity accounts under the requirements for “new” accounts as opposed as to “pre-existing” account due diligence procedures.

Australia (1,865), France (2,291), Germany (2,255), Ireland (1,757) and Netherlands (2,054).

European Financial Centers Registrations

Switzerland (4,041), Luxembourg (3,561), Austria (2,979), Lichtenstein (240).  Guernsey (2,396), Jersey (1,619), Isle of Man (313) and Gibraltar (97).

Caribbean Financial Centers Registrations

BVI (1,838), Bahamas (611), Bermuda (1,243) and Panama (451).

State of Palestine Registrations

23 FFIs registered with the IRS, listed as from the State of Palestine.  Primarily MENA banks and a branch of HSBC Middle East Bank.  See June 8th article  about this contentious issue.

North Korean Registrations

While North Korean remains a sanctioned country by OFAC (see http://www.treasury.gov/resource-center/sanctions/Programs/pages/nkorea.aspx) with a FINCEN AML update available at http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-A005.pdf, it had 4 FFI branches register.

“Other” Registrations

23 financial firms listed “other” as the country / jurisdiction.  By example, Harneys Nevis by example should probably register under Nevis (or where it is incorporated, if not Nevis)?  Why is the Austrian insurance group, Sigal Life UNIQA group Austria,  registered under “Other”?  Perhaps the July 1st list will have movement from “Other” to actual countries?

Interesting Research on the UK FFI List (by the subscriber “Edelweiss” in the comments on this blog)

Edelweiss has posted his research on the UK’s 6.264 registered FFIs (under comments to another one of this blog’s articles).  I think his research bears repeating in this article.  By example, he reviewed the list by GIIN and determined that about 1% of the global sign-ups of the June 2nd GIIN list are affiliated with AXA SA, the French financial services firm.

He then compares the 6,264 entities registered from the UK with the HMRC estimate (pg. 4) of 75,000 impacted FFIs (down from 300,000 prior to the IGA), finding that less than 10% of UK FFIs registered for the June GIIN list.  Either the HMRC estimated horribly wrong, or most UK FFIs are still undertaking initial FATCA preparation (relying on the October 25th registration deadline imposed by HRMC instead).

• The UK list is dominated by fund management firms and their various funds, private equity and the plethora of feeder funds investment trusts and quite a few trusts. Bridgepoint, a small UK private equity firm, has 72 entities (globally), while 3i, a similarly small UK private equity firm, has 45 entities (globally).
• There are quite a few entities that appear to have names suggesting they are part of a private equity holding company structure.
• Globally, he found 26 mentions of “Bidco”, 157 of “Holdco”, 37 “Midco”, 44 “Topco”, 144 “Acquisition”, 156 “Mezzanine”.
• He found 321 instances of “LLP” and “265″ instances of partnership
• Finally, he found 16 “deceased” and 33 “will trust”

Model 1 IGA – 31 (followed by number of registered FFIs/branches)

1. Australia (4-28-2014): 1,865
2. Belgium (4-23-2014): 250
3. Canada (2-5-2014): 2,265
4. Cayman Islands (11-29-2013): 14,837
5. Costa Rica (11-26-2013): 123
6. Denmark (11-19-2012): 187
7. Estonia (4-11-2014): 27
8. Finland (3-5-2014): 467
9. France (11-14-2013): 2,291
10. Germany (5-31-2013): 2,555
11. Gibraltar (5-8-2014): 97
12. Guernsey (12-13-2013): 2,396
13. Hungary (2-4-2014): 102
14. Honduras (3-31-2014): 48
15. Ireland (1-23-2013): 1,757
16. Isle of Man (12-13-2013): 313
17. Italy (1-10-2014): 457
18. Jamaica (5-1-2014): 42
19. Jersey (12-13-2013): 1,619
20. Liechtenstein (5-19-2014): 240
21. Luxembourg (3-28-2014): 3,561
22. Malta (12-16-2013): 236
23. Mauritius (12-27-2013): 728
24. Mexico (4-9-2014): 419
25. Netherlands (12-18-2013): 2,054
26. New Zealand (6-12-2014) 335
27. Norway (4-15-2013): 313
28. Slovenia (6-2-2014): 21
29. South Africa (6-9-2014): 318  
30. Spain (5-14-2013): 1,188
31. United Kingdom (9-12-2012): 6,264

Model 2 IGA – 5

1. Austria (4-29-2014): 2,979
2. Bermuda (12-19-2013): 1,243
3. Chile (3-5-2014): 325
4. Japan (6-11-2013): 3,252
5. Switzerland (2-14-2013): 4,041

Jurisdictions that have reached agreements in substance:

Model 1 IGA – 43 (followed by number of registered FFIs)

1. Antigua and Barbuda (6-3-2014): 36
2. Azerbaijan (5-16-2014): 17
3. Bahamas (4-17-2014): 611
4. Barbados (5-27-2014): 124
5. Belarus (6-6-2014): 65
6. Brazil (4-2-2014): 2,259
7. British Virgin Islands (4-2-2014): 1,838
8. Bulgaria (4-23-2014): 73
9. Colombia (4-23-2014): 173
10. Croatia (4-2-2014): 51
11. Curaçao (4-30-2014): 174
12. Czech Republic (4-2-2014): 93
13. Cyprus (4-22-2014): 280
14. Dominica (6-19-2014): 17 < – new entry
15. Georgia (6-12-201): 25
16. Grenada (6-16-2014): 32 < – new entry
17. India (4-11-2014): 247
18. Indonesia (5-4-2014): 308
19. Israel (4-28-2014): 322
20. Kosovo (4-2-2014) – nil
21. Kuwait (5-1-2014): 78
22. Latvia (4-2-2014): 41
23. Lithuania (4-2-2014): 22
24. Panama (5-1-2014): 451
25. Peru (5-1-2014): 165
26. Poland (4-2-2014): 165
27. Portugal (4-2-2014): 256
28. Qatar (4-2-2014): 47
29. Romania (4-2-2014): 110
30. St. Kitts and Nevis (6-4-2014): 71
31. St. Lucia (6-12-2014): 61
32. St. Vincent and the Grenadines (6-2-2014): 105
33. Saudi Arabia (6-24-2014): 18 < – new entry
34. Seychelles (5-28-2014): 38
35. Singapore (5-5-2014): 784
36. Slovak Republic (4-11-2014): 55
37. South Korea (4-2-2014): 397
38. Sweden (4-24-2014): 313
39. Thailand (6-24-2014): 768 < – new entry
40. Turkey (6-3-2014): 66
41. Turkmenistan (6-3-2014): 1  
42. Turks and Caicos Islands (5-12-2014): 28
43. United Arab Emirates (5-23-2014): 136

Model 2 IGA – 4

1. Armenia (5-8-2014): 28
2. Hong Kong (5-9-2014): 1.540
3. Paraguay (6-6-2014): 18  
4. Taiwan (6-23-2014): 409 < – new entry

Practical Compliance Guide for FATCA

The LexisNexis® Guide to FATCA Compliance (2^nd Edition) comprises 34 Chapters by 50 industry experts grouped in three parts: compliance program (Chapters 1–4), analysis of FATCA regulations (Chapters 5–16) and analysis of Intergovernmental Agreements (IGAs) and local law compliance challenges (Chapters 17–34), including intergovernmental agreements as well as the OECD’s TRACE initiative for global automatic information exchange protocols and systems.