FATCA Expanded Affiliated Group (EAG) by Country – the FFI List
Posted by William Byrnes on July 2, 2014
free chapter download here —> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457671 Number of Pages in PDF File: 58
3,778 Lead Entities of EAGs among the approximately 88,000 FFI registrations from 250 countries. Haydon Perryman, FATCA Compliance expert of Strevus, and I are undertaking an analysis of this July 1st FATCA FFI list release by country and by IGA, and now by EAG. Haydon has put together the below chart based upon the excel formulae he created. Check out Haydon Perryman’s FATCA blog at http://haydonperryman.wordpress.com/
FATCA EAG Definition
The FFI and its branches and affiliates are defined as an “expanded affiliated group” (“EAG”). An entity is a part of an EAG if it is affiliated with a common parent that directly or indirectly owns over 50% of the stock by vote and value of such corporation, or in the case of a partnership or non-corporate entity, owns over 50% by value of the beneficial interest of such partnership or non-corporate entity.
Subject to certain phase-in provisions regarding “Limited Branches” and “Limited Affiliates, discussed below, each FFI that is a member of an EAG must obtain the status of either a PFFI or RDCFFI before any of the other group members are able to obtain the benefit of either such status. Said another way, one bad apple poisons the barrel, and leads to FATCA withholding for all.
Except to the extent that the rules allowing limited branches and limited affiliates apply (described below the chart), each member of an EAG (including all of its branches, units, offices, and divisions) must conduct due diligence on its accounts, enact FATCA policies and procedures, abide by the terms of the FFI-agreement, and close U.S. accounts if the holder fails to provide required disclosure and reporting information.
|Model 1A IGA||Model 1B IGA||Model 2 IGA||No IGA||US||Grand Total|
|Antigua and Barbuda||1||1|
|Bolivia, Plurinational State Of||3||3|
|Isle of Man||16||16|
|Korea, Republic of||21||21|
|Papua New Guinea||1||1|
|Saint Kitts and Nevis||4||4|
|Saint Vincent and The Grenadines||2||2|
|Tanzania, United Republic Of||1||1|
|Trinidad and Tobago||7||7|
|United Arab Emirates||14||14|
|Venezuela, Bolivarian Republic Of||4||4|
|Virgin Islands (British)||85||85|
|WEST BANK AND GAZA||1||1|
Limited Branches and Affiliates Exceptions Under Regs
A FFI is, however, allowed to be a PFFI even if one or more of its branches cannot satisfy all of the requirements of an FFI-agreement under important exceptions to the general rule regarding “limited branch” and “limited FFI affiliates”.
An FFI is permitted to obtain “participating FFI” status if one or more of its branches are non-compliant under the “limited branch” exception. The limited branch exception applies to those FFIs that are in a jurisdiction that has applicable law that prohibits the FFI from reporting, closing, or transferring U.S. accounts, or withholding, closing, blocking, or transferring recalcitrant or nonparticipating FFI accounts. In such case, the limited branch is treated as a “nonparticipating FFI” even though it is an affiliated branch of the “participating FFI.” The other branches with “participating FFI” status must withhold on payments to the limited branch. The limited branch must not open U.S. accounts and must identify itself as a “nonparticipating FFI” to withholding agents.
The exception to the EAG requirements for “limited FFI” affiliates is similar to the regulatory scheme for limited branches. Under the relevant transition rule, a “participating FFI” may be permitted to have an affiliated FFI that is not compliant with FATCA until December 31, 2015 provided that such affiliates are separately identified as a nonparticipating FFI and the PFFI agrees to withhold on payments it makes to, or receives on behalf of, that branch or affiliate and agrees to report (or provide sufficient information to its U.S. withholding agents to allow them to report) payments made to these limited branches and affiliates as required on Forms 8966 or 1042/1042-S.
A Reporting Model IGA FFI may continue to treat branches and affiliates as compliant under the limited branch and limited FFI exceptions even after the expiration of the transitional rule, provided that the branch or affiliate is still unable to comply with FATCA due to restrictions under local law and the Reporting Model FFI continues to comply with its obligations under the IGA with respect to such limited branches or affiliates.
Read a detailed analysis of the EAG with many examples in the LexisNexis® Guide to FATCA Compliance (2nd 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.
 26 U.S. Code § 1471 – Withholdable payments to foreign financial institutions
(e) Affiliated groups (1) In general
The requirements of subsections (b) and (c)(1) shall apply—
(A) with respect to United States accounts maintained by the foreign financial institution, and
(B) except as otherwise provided by the Secretary, with respect to United States accounts maintained by each other foreign financial institution (other than any foreign financial institution which meets the requirements of subsection (b)) which is a member of the same expanded affiliated group as such foreign financial institution.
(2) Expanded affiliated group
(A) by substituting “more than 50 percent” for “at least 80 percent” each place it appears, and
A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954 (d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).
26 U.S. Code § 1504 – Definitions
(a) Affiliated group defined
For purposes of this subtitle—
(1) In general
The term “affiliated group” means—
(A) 1 or more chains of includible corporations connected through stock ownership with a common parent corporation which is an includible corporation, but only if—
(i) the common parent owns directly stock meeting the requirements of paragraph (2) in at least 1 of the other includible corporations, and
(ii) stock meeting the requirements of paragraph (2) in each of the includible corporations (except the common parent) is owned directly by 1 or more of the other includible corporations.
(2) 80-percent voting and value test
The ownership of stock of any corporation meets the requirements of this paragraph if it—
(A) possesses at least 80 percent of the total voting power of the stock of such corporation, and
(B) has a value equal to at least 80 percent of the total value of the stock of such corporation.