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Posts Tagged ‘GIIN’

OFAC compliance v. FATCA compliance?  Can a SDN FFI Obtain a GIIN?

Posted by William Byrnes on August 4, 2015


The entity I represent is on the Office of Foreign Asset Control’s Specially Designated Nationals list.  Is the entity eligible to register and receive a GIIN?

Answer to be found International Financial Law Prof Blog

 

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Haydon Perryman & William Byrnes’ June FATCA GIIN Update

Posted by William Byrnes on July 1, 2015


The FFI GIIN List Update (Lists from June 1, 2014 through June 1, 2015)

On 1 June 2015 the IRS published its thirteenth FATCA GIIN list of “approved FFIs” (a list of theFATCA_rollfinancial firms that have registered on the IRS FATCA portal).

Total approved FFIs reached 165,461, and increase of only 2,851 during the month of May.  This FATCA registration trend since January has been described as lethargic, with April’s increase just 2,600 additional firms joining, 3,734 additional during March, and 2,479 in February.  But when compared to what was forecast by the IRS, by industry, and by the UK, it’s a troubling low figure.

In its FATCA FAQs, the IRS suggested a 500,000 potential FFI registration figure.  Many industry stakeholders suggested that 800,000 – 900,000 firms fall under the expansive definition of financial institution.

Given the broad definition of a financial institution that must register for a GIIN, the UK HMRC estimated that, even with its IGA and its accompanying local regulations, 75,000 UK entities probably are impacted.  Yet, only the UK GIIN population is only 23,256.

If the UK HMRC is correct that 75,000 entities are impacted in the UK, then extrapolated among other large and sophisticated financial service economies like Japan, China, India, and Germany, the IRS estimate of 500,000 may be low.

90 countries and dependencies have entered into a FATCA IGA with the U.S. based on Model 1A (reciprocal), or are awaiting local ratification, accounting for 100,190 of the registrations.  A further eight countries signed a Model 1B (non-reciprocal), accounting for a further 39,564 GIINs.  A final 14 countries signed a Model 2 version IGA, adding 18,458 FFI registrations covered by an IGA.  Thus in total, 158,212, representing 96% of FFI registrations, are from the 112 IGA states and their dependencies.

The 131 countries and dependencies without an IGA have only registered 6,295 FFIs to date, a surprising low number given that the initial implementation of the 30% withholding for non-compliance with FATCA began 1 July 2014.

The UK and its ten dependencies and overseas territories comprised 74,694 of the GIINs, representing 45% of the total, or without the UK included, 49,898 for 30.6%.  The 34 OECD members have produced 79,057 GIIN registrations.

Cayman remains the FFI registration global leader, with 30,868, throughout the entire FATCA registration process.  Ironic that the EU Commission just black listed it last week.

The major financial industries of the four BRIC countries have only led to 8,254 FFI registrations, which is seen as a worrying point for FATCA acceptance among non-OECD states.  BRIC registrations are now just dripping in, up from 8,186 in May, 8,060 in April and 7,962 in March.

OECD Common Reporting Standard signatories for the a multilateral competent authority agreement to automatically exchange information has reached 61.  But a notable holdout of a signatory that has not yet actually ratified the agreement is the U.S.  88 countries and dependencies are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the latest being Mauritius which signed June 23.

FATCA IGA Scenarios GIINs Jurisdictions
Model 1A IGA  100,190  90
Model 1B IGA  39,564  8
Model 2 IGA  18,458  14
No IGA  6,295  131
US  886  1
US Territories  68  6
Total  165,461  250

Want to read more GIIN analysis and statistics?  See the International Financial Law Professor blog

I am beginning my new faculty position with Texas A&M University School of Law in a week.  With the resources of Texas A&M Law, my research colleague Haydon Perryman (who is now with UBS Investment Bank where he is responsible for global regulatory reporting of FATCA and the CRS) and I will be able to expand our FATCA and CRS research capacity.  Any readers that want to assist in such research, please contact us at Haydon Perryman or William Byrnes.  Please download my FATCA SSRN article here.

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FATCA GIIN Registrations Update for April | Kluwer International Tax Blog

Posted by William Byrnes on April 23, 2015


FATCA GIIN Registrations Update for April | Kluwer International Tax Blog.

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Haydon and Byrnes’ Analysis of FATCA Updates & GIIN List of March 2015

Posted by William Byrnes on March 20, 2015


GIIN list, IDES Update, 8938 Form Instruction Updates …. read on Wolters Kluwer.

GIIN Lists Analysis: June 2014 through March 2015

In the words of my English colleague Haydon Perryman, March was a “bit of a damp squib”.  Financial institution FATCA registrations have slowed to a trickle with only 2,479 additional ones seeking a GIIN, bringing the ultimate total to 156,276.

Of this total, … read on Wolters Kluwer

Form 8938 (Reporting of Specified Foreign Financial Assets) Instructions Updated

In the Final Regulations effective 12 December 2014, Form 8938 Reporting of Specified Foreign Financial Assets, the IRS International Financial Law Prof Blogaddressed such issues as dual residents, valuation challenges, foreign currency, virtual currency (left for another time), retirement accounts and insurance policies. The Final Regulations can be found on the FATCA – Regulations and Other Guidance page in the For Individual Taxpayers section. However, as of 10 March 2015, the IRS updated December’s changes to the Form 8938 reporting requirements, as well as including additional information not in the December instructions. A summary of important points follows.  Of this total, … read on Wolters Kluwer

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Comparison of NAFTA, BRIC, EU and Caribbean of the 8 FATCA GIIN Lists (June 2014 -> January 2015)

Posted by William Byrnes on January 12, 2015


see the full analysis at International Financial Law Prof Blog excerpted below.

Caribbean and Atlantic Financial Centers Registrations

The Cayman Islands remain the global FATCA compliance registration leader with 27,011 FFIs, almost 7,000 more compliant FFIs than the UK.  The June GIIN list included 1,837 BVI FFI registrations, now at 4,653.  Bahamas has increased from 610 to 882, Bermuda 1,242 to 1,824 and Panama 450 to 773.  …

By the way, the 3rd edition of my Lexis Guide to FATCA Compliance will be out soon with substantial more analysis – 1,200 pages over 54 chapters.  Over 50 FATCA compliance experts from tier 1 institutions, former government officials, and professional firms have contributed to create this detailed and robust guide, filled with numerous practical examples and several chapters written specifically for the non-legal, compliance operations officer.  No filler pages of publicly available documents and regurgitated regulations – it’s all beef.  See the Lexis website to order a copy of this 3rd edition.

 

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Analysis of the 2014 FATCA GIIN Registration Lists

Posted by William Byrnes on December 2, 2014


International Financial Law Prof Blog

FATCA_rollHaydon Perryman and I have sifted through the GIIN lists of June through December.  I present Part 1 initial analysis below.  Part 2 on Thursday.

By the way, the 3rd edition of my Lexis Guide to FATCA Compliance will be out soon with substantial more analysis – 1,200 pages over 54 chapters.  Over 50 FATCA compliance experts from tier 1 institutions, former government officials, and professional firms have contributed to create this detailed and robust guide, filled with numerous practical examples and several chapters written specifically for the non-legal, compliance operations officer.  No filler pages of publicly available documents and regurgitated regulations – it’s all beef.  See the Lexis website to order a copy of this 3rd edition.

…. The November 2014 list saw a jump in registration, led by the United Kingdom, achieving a total of 116,104 FFIs and branch registrations.[6]  43 percent of all registered GIIN are from the UK and her Crown Dependencies and Overseas Territories. The final GIIN list released before submission for publication, December’s, grew by only six thousand registrations, to 122,881, of which only 6,094 were from non-IGA countries.  Such a stunted growth in FFI registration is foreboding of the remaining, significant compliance challenges. …. read the entire story at International Financial Law Prof Blog

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Analysis of FATCA GIIN List (of November 1st)

Posted by William Byrnes on November 7, 2014


Hello Lexis FATCA / International Tax Subscribers,
I am just one weekend away from completing the 3rd edition of Lexis’ Guide to FATCA Compliance.  Deep into my analysis of these challenging issues, editing, cross-referencing, and amalgamation ofd27f6-6a00d8341bfae553ef01b7c6eb77bd970b-pi over 70 expert contributors analysis and perspectives (including Haydon Perryman).  All the FATCA activity this year has spawned 54 chapters of over 1,000 of legal, operational and compliance analysis.  I hope that I have been as pedantic as the previous years with catching every typo, cross reference link, footnote citation, and consistent style / grammar / punctuation.

Last month, the GIIN list included 104,344, a jump from the September list of 5,000 from 99,861 FFIs (mind you that a substantial number of these registrations are not unique, but instead represent affiliates within EAGs) – see our previous analysis links below.  It is now November.  The UK self-imposed (yet ignored) deadline to GIIN register passed October 25th.

So what happened?  read on at http://lawprofessors.typepad.com/intfinlaw/2014/11/novembers-published-fatca-giin-list-analysis.html

remember to download for free –> LexisNexis® Guide to FATCA Compliance

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IRS Posts New and updated FATCA FAQs

Posted by William Byrnes on August 5, 2014


New and updated FATCA Registration System and FFI List FAQs have been posted to the FATCA Website.

  • What is the maximum number of points of contact allowed on the Registration? Updated: 8-1-2014
  • What is the maximum number of points of contact allowed on the Registration? Updated: 8-1-2014
  • What information will be in the notification e-mail the RO receives? Updated: 8-1-2014
  • Why is the RO not receiving FATCA notification emails regarding the FI’s status and account updates? Updated: 8-1-2014

book cover

free chapter download here —> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457671   Number of Pages in PDF File: 58

Over 600 pages of in-depth analysis of the practical compliance aspects of financial service business providing for exchange of information of information about foreign residents with their national competent authority or with the IRS (FATCA).

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August FATCA GIIN list analysed by country and by IGA

Posted by William Byrnes on August 1, 2014


By William Byrnes and Haydon Perryman

Treasury-Dept.-Seal-of-the-IRSThe IRS published its August list of 95,239  FATCA registered FFIs, including entities that completed the registration process by July 25th.  The increase has been disappointing to say the least.  Only 7,246 additional entities completed registration this past month, up from 87,993 in July.

89,718 FFIs (94%) are registered from the 101 IGA countries on the GIIN list.  Only 4,801 FFI (5%) registered from the 143 countries without an IGA for which FATCA withholding began July 1st.

June GIINs 77,354 -> July GIINs 87,993 -> August GIINs 95,239 (7,246 increase)

How Many Foreign Financial Institutions Are Still Not Registered?  Most!

Most pundits thought at least 20% of the FFIs requiring FATCA registration would have done so by now.  We were wrong.  I was personally thinking that 110,000 would be registered for the August 1st FFI list.  The small increase of just 7,246 is troubling.  Total global compliance remains in the single digits by both the IRS and foreign government estimated numbers.

The 30% FATCA withholding began July 1st on 143 countries (101 have IGAs that forestall withholding until January 1, 2015).  Only 4,801 FFI (5%) registered from these 143 countries.  Thus, FATCA compliance is running in the low, single digits for these countries.

read our analysis and a country-by-country, and IGA, breakdown at International Financial Law Professor

Who We Are?

Haydon Perryman, FATCA Compliance expert of Strevus, and I have been undertaking (and publishing) the leading, same-day, analysis of the previous June 2nd  and the July 1st  of the FATCA FFI GIIN list by country, by IGA, by EAG, as well as exploring other interesting aspects of registered FFIs, and FATCA compliance documentation (e.g. W-8s and equivalent forms allowed by IGA). Haydon brings the practical side to bear having established the FATCA compliance system for Tier 1 UK institutions and Tier 1 EU ones, and I the academic side being the primary author of Lexis’ Guide to FATCA Compliance and an international tax professor.

book cover

free chapter download here —> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457671   Number of Pages in PDF File: 58

Over 600 pages of in-depth analysis of the practical compliance aspects of financial service business providing for exchange of information of information about foreign residents with their national competent authority or with the IRS (FATCA).

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FATCA FAQs Updated by IRS

Posted by William Byrnes on July 23, 2014


book coverFATCA Q&A Updated by IRS – the updates are below.  Link to New and Updated FAQs have been Posted with Regard to QI Agreements, Financial Institutions, and General Compliance 

free chapter download here —> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457671   Number of Pages in PDF File: 58

Over 600 pages of in-depth analysis of the practical compliance aspects of financial service business providing for exchange of information of information about foreign residents with their national competent authority or with the IRS (FATCA).

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Updated 2014 Qualified Intermediary (QI) Agreement released !

Posted by William Byrnes on June 27, 2014


free chapter download here —> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457671   Number of Pages in PDF File: 58

Revenue Procedure 2014-39Application Procedures and Overview of Requirements for Qualified Intermediary Status Under Chapters 3, 4, and 61 and Section 3406; Final Qualified Intermediary Agreement.  The effective date of this revenue procedure is June 27, 2014.  Revenue Procedure 2014-39 will be published in IRB 2014-29, dated July 14, 2014.

The QI agreement is updated to reflect the enactment of Chapter 4 (§§1471-1474) of the Code, and the issuance of regulations under section 3406 and chapters 3, 4, and 61 of the Code.

Renewal of QI:  An FFI that seeks to renew its QI agreement as well as register as a (a) participating FFI, (b) registered deemed-compliant FFI, or (c) limited FFI must do so by submitting a registration form through the FATCA registration website.

An NFFE that is a direct reporting NFFE or a sponsoring entity of a direct reporting NFFE must also renew its QI agreement through the FATCA registration website.

A QI will retain its QI-EIN to be used when it is fulfilling the requirements of a QI under chapters 3, 4, and 61 and section 3406, including making tax deposits and filing Forms 945, 1042, 1042-S, 1099, and 8966.

New QI: A prospective QI must submit Form 14345, Qualified Intermediary Application, to become a QI.   The Form 14345 must establish, to the satisfaction of the IRS, that the applicant has adequate resources and Procedures to comply with the terms of the QI agreement.

Once the QI application is approved, the IRS will send an approval notice to the address of the QI provided on Form 14345.  The approval notice will include a QI-EIN for fulfilling the requirements of a QI under chapters 3, 4, and 61, and section 3406, including making tax deposits and filing Forms 945, 1042, 1042-S, 1099, and 8966.

It will also instruct a QI (other than an NFFE that is not acting on behalf of its shareholders) to submit the information specified in Form 8957, Foreign Act Tax Compliance Act (FATCA) Registration, (“registration form”) through the FATCA registration website available at www.irs.gov/FATCA, to obtain its chapter 4 status as a (a) participating FFI, (b) registered deemed-compliant FFI, or (c) direct reporting NFFE, and must register as a QI by providing the information specified for renewal of QI status.

An NFFE that is acting as a sponsoring entity of a direct reporting NFFE and that obtains QI status must also register as a QI on the FATCA registration website by providing the information specified for renewal of QI status.  Upon completion of the registration process, an FFI (other than a limited FFI or limited branch of an FFI) will be issued a GIIN to be used to identify itself to withholding agents and to tax administrators for FATCA reporting. In the case of an NFFE that is not acting on behalf of its shareholders, the approval notice will provide the date on which the QI-EIN is issued (which will serve as the effective date of the QI agreement).

For future years, the IRS intends to update the online FATCA registration website to allow prospective QIs to submit a QI application electronically and in such manner as the IRS may prescribe in future guidance or other instructions. Until this update to the FATCA registration website occurs, a prospective QI must submit to the IRS address identified above a paper Form 14345.

book coverComplying with FATCA?

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.   A free download of the first of the 34 chapters is available at http://www.lexisnexis.com/store/images/samples/9780769853734.pdf

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5 new IGAs with 3 business days to go until 30% FATCA withholding on remaining 167 countries begins

Posted by William Byrnes on June 25, 2014


(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 25th (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 2nd 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 1st. 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 5th and 2nd).  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 (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.

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Updated FATCA GIIN List of FFI Registrations by Country and IGA

Posted by William Byrnes on June 16, 2014


Below is a selection of the 77,353 registered from 115 of the total 205 countries and jurisdictions on the June 2nd list. Of the total registered as of June, 70,811 FFIs (91.5%) registered from the 78 countries and jurisdictions that as of June 15th have an IGA.  Thus, these 70,811 probably registered either as Deemed Compliant FFIs or as branches by the initial May 5th extended deadline.

Only 6,542 FFIs registered from the remaining 172 countries and jurisdictions either as Participating FFIs or branches.  Withholding agents are finalizing systems to begin 30% withholding on the Non-Participating FFIs within these 172 non-IGA countries.  Withholding on IGA jurisdiction non-compliant FFIs only begins January 1st.

  1. Afghanistan: 7
  2. Andorra: 33
  3. Anguilla: 70
  4. Antigua & Barbuda: 35
  5. Argentina: 269
  6. Armenia: 27 <– IGA
  7. Aruba: 13
  8. Australia: 1,864 <– IGA
  9. Austria: 2,978
  10. Azerbaijan: 16 <– IGA
  11. Bahamas: 610  <– IGA
  12. Barbados: 123  <– IGA
  13. Belgium: 249  <– IGA
  14. Belarus: 64
  15. Belize: 122
  16. Bermuda: 1,242
  17. Brazil: 2,258  <– IGA
  18. Bulgaria: 72
  19. BVI: 1,837  <– IGA
  20. Canada: 2,264  <– IGA
  21. Cayman Islands: 14,836  <– IGA
  22. China: 211
  23. Christmas Island: 1
  24. Colombia: 172  <– IGA
  25. Comoros Is.: 1
  26. Costa Rica: 122  <– IGA
  27. Cook Is.: 72
  28. Croatia: 50  <– IGA
  29. Curacao: 173  <– IGA
  30. Cyprus: 279  <– IGA
  31. Czech Republic: 92  <– IGA
  32. Denmark: 186  <– IGA
  33. Djibouti: 1
  34. Dominica: 17
  35. Dominican Republic: 67
  36. Ecuador: 22
  37. Egypt: 62
  38. Equatorial Guinea: 1
  39. Estonia: 26  <– IGA
  40. Falkland Islands: 1
  41. Finland: 466  <– IGA
  42. France: 2,290  <– IGA
  43. French Southern Territories: 1
  44. Georgia: 24  <– IGA
  45. Germany: 2,554  <– IGA
  46. Gibraltar: 96  <– IGA
  47. Greece: 91
  48. Greenland: 1
  49. Grenada: 31
  50. Guadeloupe: 1
  51. Guam: 3
  52. Guatemala: 75
  53. Guernsey: 2,395  <– IGA
  54. Honduras: 47  <– IGA
  55. Hong Kong: 1,539 <– IGA
  56. Hungary: 101  <– IGA
  57. Iceland: 5
  58. India: 246  <– IGA
  59. Indonesia: 307 <– IGA
  60. Ireland: 1,756  <– IGA
  61. Isle of Man: 312  <– IGA
  62. Israel: 321 <– IGA
  63. Italy: 456  <– IGA
  64. Jamaica: 41  <– IGA
  65. Japan: 3,251  <– IGA
  66. Jersey: 1,618  <– IGA
  67. North Korea: 4
  68. South Korea: 396
  69. Kuwait: 77
  70. Latvia: 40
  71. Lichtenstein: 239  <– IGA
  72. Lithuania: 21 ß IGA
  73. Luxembourg: 3,560 ß IGA
  74. Macao: 36
  75. Malta: 235  <– IGA
  76. Mauritius: 727  <– IGA
  77. Mexico: 418  <– IGA
  78. Monaco: 98
  79. Netherlands: 2,053  <– IGA
  80. New Zealand: 334  <– IGA
  81. Norway: 312  <– IGA
  82. Other: 22
  83. Panama: 450  <– IGA
  84. Paraguay: 17   <– IGA
  85. Peru: 164  <– IGA
  86. Poland: 164  <– IGA
  87. Portugal: 255  <– IGA
  88. Qatar: 46  <– IGA
  89. Romania: 109 <– IGA
  90. Russia: 514
  91. Saint Pierre & Miquelon: 1
  92. San Marino: 14
  93. Saudi Arabia: 17
  94. Seychelles: 37  <– IGA
  95. Singapore: 783  <– IGA
  96. South Africa: 317  <– IGA
  97. Spain: 1,187  <– IGA
  98. Slovakia: 54  <– IGA
  99. Slovenia:  20  <– IGA
  100. St Kitts & Nevis: 70 <– IGA
  101. St Lucia: 60  <– IGA
  102. St. Vincent and the Grenadines: 104  <– IGA
  103. Sweden: 312  <– IGA
  104. Switzerland: 4,040  <– IGA
  105. Taiwan: 408
  106. Turkey: 65  <– IGA
  107. Turkmenistan: 1   <-– IGA
  108. Turks & Caicos: 27  <– IGA
  109. Ukraine: 105
  110. United Arab Emirates: 135  <– IGA
  111. United Kingdom: 6,263  <– IGA
  112. USA: 562
  113. Uruguay: 131
  114. Venezuela: 29
  115. 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 (14,836) (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 (514), India (246) with China only having 211.

NAFTA Registrations

2,264 FFIs registered from Canada and Mexico at 418.

Major OECD Countries Registrations

The United Kingdom (6,263) 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 5th and 2nd).  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 (1,864), France (2,290), Germany (2,254), Ireland (1,756) and Netherlands (2,053).

European Financial Centers Registrations

Switzerland (4,040), Luxembourg (3,560), Austria (2,978), Lichtenstein (239).  Guernsey (2,395), Jersey (1,618), Isle of Man (312) and Gibraltar (96).

Caribbean Financial Centers Registrations

BVI (1,837), Bahamas (610), Bermuda (1,242) and Panama (450).

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 “Edelweiss” in the comments on this blog)

Edelweiss has posted his research on the UK’s 6.263 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 6,263 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.  I presume they have an affiliation with a US private equity shareholder. Globally, there are 26 mentions of “Bidco”, 157 of “Holdco”, 37 “Midco”, 44 “Topco”, 144 “Acquisition”, 156 “Mezzanine” (not exclusively private equity, also specialty finance like mezz funds).
  • I found 321 instances of “LLP” and “265″ instances of partnership
  • I found 16 “deceased” and 33 “will trust”

Three Questions raised by Edelweiss

  • For some reason, the large UK retailers Marks and Spencer (a plc) and John Lewis (a co-operative) found it necessary to register. M&S offers a savings account (which presumably explains why) but John Lewis doesn’t.  Could it be credit card related?

Response: A FFI is eligible to be classified as a “registered deemed-compliant” FFI (“RDCFFI”) if it completes a registration process with the IRS (See Lexis Guide to FATCA Compliance § 7.04) and either is a Reporting Model 1 FFI, or falls within one of six categories listed in Treasury Regulations Section 1.1471-5(f)(1)(i). These six categories include:

  1. local FFIs; 
  2. nonreporting members of participating FFI groups; 
  3. qualified collective investment vehicles; 
  4. restricted funds; 
  5. qualified credit card issuers; or 
  6. sponsored investment entities and controlled foreign corporations. 

Qualified Credit Card Issuers 

A “qualified credit card issuer” is an entity that is an FFI solely because it is an issuer of credit cards that accepts deposits only when a customer makes a payment in excess of a balance due on the card and the overpayment is not immediately returned to the customer. …

  • Also present is Alliance-Boots, the UK’s largest pharmacy. They have 16 entities in the UK and Ireland (under AB Acquisition and Alliance Boots) though I assume this is because they are part owned by KKR.
  • I would be curious to get your take on why Nestle Suisse SA found it necessary to register as an FFI. Is this to avoid confiscation of 30% of principal and interest on the repayment of intercompany loans from a US subsidiary? Is it because it’s a finance subsidiary and they have US source income from bonds?

book coverPractical Compliance Guide for FATCA 

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.   A free download of the first of the 34 chapters is available at http://www.lexisnexis.com/store/images/samples/9780769853734.pdf

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FATCA Guidance for UK Trustees

Posted by William Byrnes on May 7, 2014


The Law Society, Institute of Chartered Accountants, and STEP published guidance with an accompanying flow chart that are intended to help United Kingdom trustees and their advisers determine whether FATCA registration is required.  See Law Society and Institute of Chartered Accountants FATCA Guidance for UK Trust Companies (May 2014)  (Chartered Accountants link)

The Law Society states that: “This guidance is relevant for all UK trusts and trustees, whether or not they have any known US connections. UK financial institutions must meet the requirements of the Treaty and UK legislation in order to avoid the withholding tax.  All UK trusts and trustees, whether or not they have any known US connections, need to consider their status under the UK/US agreement. If they are required to register with the IRS under the agreement, they must do so by 25 October 2014.”

The guidance states that: “The major impact of FATCA will fall on banks and investment houses but it is essential to understand that firms such as yours are directly affected, even if you only have UK clients. As partners (or as directors, administrators and trustees) you have direct UK legal obligations that must be met if you are to avoid financial (and reputational) penalties. The full guidance is available at http://www.hmrc.gov.uk/drafts/uk-us-fatca-guidance-notes.pdf.” (see page 2).

See the Flow Chart for UK trustees (under the UK/USA Intergovernmental Agreement (IGA))

Guidance excerpts below …

So what do I have to do?

Identify and classify the entities comprising your practice and the client entities with which you are connected such as trusts;
Register any FI for a Global Intermediaries Identification Number (GIIN);
Review your practice systems and implement any necessary changes to:

1) engagement letters
2) client take-on process
3) client identification
4) establishing reportable transactions
5) effecting the report
6) client communications;

Make the appropriate reports to HMRC.

United Kingdom Deadline

The deadline is October 2014, by which time you need to register any FIs with the IRS as an FI. At that time you will also need to demonstrate that you have adequate systems in
place to identify and record US Persons. The first reporting will be for the calendar year 2015, but systems will need to be put in place now. The mechanics of reporting, which will
be to HMRC, are not yet known.

Corporate trustees

Where there is a corporate trustee, it registers and reports on the trust; the individual trusts do not need to register or report. It may be worth considering whether there is merit in
appointing a corporate trustee in place of or in addition to the individual trustees to eliminate the need for the individual trust to register and report. The responsibility for doing so is
passed to the corporate trustee. In this situation the trust itself becomes known as a Trustee Documented Trust.

Owner documented trusts

Instead of registering it may be possible for trustees to opt for owner documented status. They can only do so without challenge if they have enough regular information to prove that
all owners (beneficiaries who receive one or more distributions) are and remain non-US Persons.

They will also have to recertify their status every three years via form W8-BEN-E and if at any time the trustees become aware that an owner has become a US person, they will have
to register with the IRS and report to HMRC in the normal way. Further, they will need to appoint a withholding agent. It is understood that banks and investment businesses, which
already act as Qualifying Intermediaries for US tax purposes, are currently considering whether they will be prepared to offer this service. The current indications are that they will
do so.

Trustees must notify withholding agents of any change in status within thirty days. They will need to have systems and procedures in place to ensure that this is adhered to.

Creation of new trusts

The current regulations are unclear as to the deadline for obtaining a GIIN or otherwise regulating the FATCA status of trusts created after October 2014, i.e. once the first set of
registration is completed. Taking into account the requirements of banks and other institutions to be able to operate accounts, the advice must be that FATCA status, and
registration as necessary, should be an integral part of the process for creating any new trust and completed as soon as practicable.

There is a particular point of concern surrounding executors. Executors themselves are not entities within FATCA and will therefore be reported upon as usual. There is one exception in that the accounts of deceased persons are not reportable accounts as long as the FI concerned is in possession of the death certificate. However, it is not uncommon for
executors to become the trustees of a will trust and the point of transition between the two can be difficult to identify with precision. Practitioners will need to be alert for this
circumstance and ensure that the appropriate steps are taken in good time, including whether a corporate trustee should be appointed, and align with the records at banks and
investment managers etc.


book cover
The LexisNexis® Guide to FATCA Compliance (2nd Edition) comprises 34 Chapters 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 requirements (Chapters 17–34), including  information exchange protocols and systems.  The 34 chapters include many practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA.  Chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, and insights as to the application of FATCA and the IGAs for BRIC and European country chapters.  

If you are interested in discussing the Master or Doctorate degree in the areas of financial services or international taxation, please contact me https://profwilliambyrnes.com/online-tax-degree/

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5 New IGAs Bring Total to 62 Published by May 5 Deadline for FATCA Registration ! Only 150 to go …

Posted by William Byrnes on May 6, 2014


How many IGAs are left to be agreed by Treasury?

The USA recognizes 195 independent states in the world, 67 dependencies of states, and has contacts with Taiwan.

Of the 67 dependencies, some like the French departments of French Guiana, Guadeloupe, Martinique, Mayotte and Reunion, are included as part of the state, others like Antarctica have no economic relevance.  More important, approximately 16 dependencies have at least enough potential US source income exposure for local financial firms to warrant an IGA, such as Bermuda, Cayman Islands, and Hong Kong.  And then there’s Taiwan.

That means approximately 212 states and jurisdictions, give or take a couple, could benefit from an IGA.  62 have one recognized by US Treasury as being in effect as of yesterday May 5.  FFIs in IGA jurisdictions have an extension to register with the IRS – until December 22, 2014 to obtain their GIINs. 

So at least 150 IGAs to go by my count…. 

The May 5th Deadline for these Non-IGA Countries and Jurisdictions

FATCA registration remains open of course, but the deadline for inclusion on the June 2nd participating foreign financial institution list (“PFFI”) passed yesterday on May 5.  Yesterday’s article covered the May 5th deadline (and consequences of passing) that applied to all FFIs in these 150 non-IGA states and jurisdictions (see https://profwilliambyrnes.com/2014/05/05/which-fatca-deadlines-did-treasurys-may-2nd-notice-extend-is-todays-deadline-still-in-place/)

Did all the FFIs register that are in countries and jurisdictions that are not yet included on the list, such as China, Hong Kong and Taiwan, as well as the Middle Eastern jurisdictions such as United Arab Emirates and Saudi Arabia?  What about Russia and Ukraine institutions? What IGA will apply to Crimea?  It is possible that on July 1st an unregistered FFI is considered non-participating (NPFFI) for purposes of withholding, but by example, on August 1st its country agrees an IGA in substance that Treasury announces on its FATCA site and the NPFFI goes back to FFI non-withholding status because of the IGA, at least until the final Dec 22 deadline applying to the IGA FFIs.

56 days remain until the July 1st application of FATCA’s 30% withholding applies to payments from US sources for all these FFIs that missed the deadline.

IGA FATCA Registration Classification

Financial Institutions that are treated as Reporting Financial Institutions under a Model 1 IGA register as Registered Deemed-Compliant Foreign Financial Institutions, whereas Financial Institutions that are treated as Reporting Financial Institutions under a Model 2 IGA register as Participating Foreign Financial Institutions.  

The following jurisdictions are treated as having a FATCA intergovernmental agreement (IGA) in effect. (see the 8 IGA additions and 1 IGA Mexican revision update at https://profwilliambyrnes.com/2014/05/01/iga-list-expands-to-55-mexico-iga-revised/)

jurisdictions that have reached agreements in substance (beginning on the date indicated in parenthesis):

Model 1 IGA = 31 (in red added since my last IGA update)

  1. Bahamas (4-17-2014)
  2. Brazil (4-2-2014)
  3. British Virgin Islands (4-2-2014)
  4. Bulgaria (4-23-2014)
  5. Columbia (4-23-2014)
  6. Croatia (4-2-2014)
  7. Curaçao (4-30-2014)
  8. Czech Republic (4-2-2014)
  9. Cyprus (4-22-2014)
  10. Gibraltar (4-2-2014)
  11. India (4-11-2014)
  12. Indonesia (5-4-2014) <— new
  13. Israel (4-28-2014)
  14. Kosovo (4-2-2014)
  15. Kuwait (5-1-2014)  <— new
  16. Latvia (4-2-2014)
  17. Liechtenstein (4-2-2014)
  18. Lithuania (4-2-2014)
  19. New Zealand (4-2-2014)
  20. Panama (5-1-2014)  <— new
  21. Peru (5-1-2014)  <— new
  22. Poland (4-2-2014)
  23. Portugal (4-2-2014)
  24. Qatar (4-2-2014)
  25. Singapore (5-5-2014) <— new
  26. Slovak Republic (4-11-2014)
  27. Slovenia (4-2-2014)
  28. South Africa (4-2-2014)
  29. South Korea (4-2-2014)
  30. Sweden (4-24-2014)
  31. Romania (4-2-2014)

Model 2 IGA = 0

jurisdiction that have signed and entered into a formal IGA

Practical Compliance Aspects of FATCA and GATCAbook coverThe LexisNexis® Guide to FATCA Compliance (2nd Edition) comprises 34 Chapters 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 requirements (Chapters 17–34), including  information exchange protocols and systems.  The 34 chapters include many practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA.  Chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, and insights as to the application of FATCA and the IGAs for BRIC and European country chapters.  

If you are interested in discussing the Master or Doctorate degree in the areas of financial services or international taxation, please contact me https://profwilliambyrnes.com/online-tax-degree/

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new FATCA FAQs released by IRS

Posted by William Byrnes on April 18, 2014


FATCA – FAQs General

  1. Qualified Intermediaries/Withholding Foreign Partnerships/Withholding Foreign Trusts
  2. IGA Registration
  3. Expanded Affiliated Groups
  4. Sponsoring/Sponsored Entities
  5. Responsible Officers and Points of Contact
  6. Financial Institutions
  7. Exempt Beneficial Owners
  8. NFFEs
  9. Registration Update
  10. ADDITIONAL SUPPORT
  11. FATCA Registration System Technical Support 
# Questions Answers
Qualified Intermediaries/Withholding Foreign Partnerships/Withholding Foreign Trusts

Q1.

How does a Financial Institution that is not currently a Qualified Intermediary (“QI”), a Withholding Foreign Partnership (“WP”), or a Withholding Foreign Trust (“WT”) register to become one?

The process to become a QI, WP or WT has not been modified by the provisions of FATCA.

The application for Qualified Intermediary status can be found here: QI Application

Information on acquiring Withholding Foreign Partnership, or Withholding Foreign Trust status can be found here: WP/WT Application

Q2.

How do FIs that are currently QIs, WPs and WTs renew their agreements?

Existing QIs, WPs and WTs are required to renew their QI agreements through the FATCA registration website as part of their FATCA registration process.

All QI, WP, or WT agreements that would otherwise expire on December 31, 2013 will be automatically extended until June 30, 2014.  (Notice 2013-43; 2013-31 IRB 113).

Q3.

I am not currently a QI/WP/WT.  Can I use the LB&I registration portal to register for FATCA and become a new QI/WP/WT?

No.

QI/WP /WT status can only obtained by completing and submitting a Form 14345 (“QI Intermediary Application”) and Form SS-4 (“Application for Employer Identification Number”) directly to the QI Program.   Interested QIs/WPs/WT should submit the required paperwork to the QI program and separately use the FATCA registration portal to obtain a GIIN for FATCA purposes.    FFIs can not become a new QI/WP/WT through the FATCA portal.

Applications for QI/WP/WT status can be made to:

IRS-Foreign Intermediary Program
Attn:  QI/WP/WT Applications
290 Broadway, 12th floor
New York City, New York 10007

Note:  Form 14345 (“QI Intermediary Application”) should be used for WPs and WTs in addition to QIs.

Q4.

Must an FI become a QI/WP/WT in order to register under FATCA?

An FI is not required to obtain QI/WP or WT status to register under FATCA.  If at the time of FATCA registration, the FI does not have in effect a withholding agreement with the IRS to be treated as a QI, WP or WT, the FI will indicate “Not applicable” in box 6 and will continue with the registration process.

IGA Registration

Q5.

Please provide a link that lists the jurisdictions treated as having in effect a Model 1 or Model 2 IGA.

The U.S. Department of Treasury’s list of jurisdictions that are treated as having an intergovernmental agreement in effect can be found by clicking on the following link: IGA LIST

Q6.

How do Foreign Financial Institutions in Model 1 jurisdictions register on the FATCA registration website?

Financial Institutions that are treated as Reporting Financial Institutions under a Model 1 IGA (see the list of jurisdictions treated as having an IGA in effect at IGA LIST) should register as Registered Deemed-Compliant Foreign Financial Institutions.

More information on registration can be found in the FATCA Registration Online User Guide:User Guide Link (See Section 2.4 “Special Rules for Registration”)

Q7.

How do Foreign Financial Institutions in Model 2 jurisdictions register on the FATCA registration website?

Financial Institutions that are treated as Reporting Financial Institutions under a Model 2 IGA (see the list of jurisdictions treated as having an IGA in effect at IGA LIST) should register as Participating Foreign Financial Institutions.

More information on registration can be found in the FATCA Registration Online User Guide:User Guide Link (See Section 2.4 “Special Rules for Registration”)

Q8.

We are an FFI in a country that has not signed an IGA, and the local laws of our country do not allow us to report U.S. accounts or withhold tax. What is our FATCA classification?

Unless the Treasury website provides that your country is treated as having an IGA in effect, then, because of its local law restrictions, this FFI should register as a Limited FFI provided it meets the definition shown directly below. See FATCA – Archive   for a list of countries treated as having an IGA in effect.

A Limited FFI means an FFI that, due to local law restrictions, cannot comply with the terms of an FFI Agreement, or otherwise be treated as a PFFI or RDCFFI, and that is agreeing to satisfy certain obligations for its treatment as a Limited FFI.

Expanded Affiliated Groups
Q9.

For registration purposes, can an EAG with a Lead FI and 2 Member FIs be divided into: (1) a group with a Lead FI and a member FI, and (2) a member FI that will register as a Single FI?

Yes. An EAG may organize itself into subgroups, so long as all entities with a registration requirement are registered. An FI that acts as a Compliance FI for any members of the EAG is, however, required to register each such member as would a Lead FI for such members.

Q10.

What is required for an entity to be a Lead FI?

A Lead FI means a USFI, FFI, or a Compliance FI that will initiate the FATCA Registration process for each of its Member FIs that is a PFFI, RDCFFI, or Limited FFI and that is authorized to carry out most aspects of its Members’ FATCA Registrations. A Lead FI is not required to act as a Lead FI for all Member FIs within an EAG. Thus, an EAG may include more than one Lead FI that will carry out FATCA Registration for a group of its Member FIs. A Lead FI will be provided the rights to manage the online account for its Member FIs. However, an FFI seeking to act as a Lead FI cannot have Limited FFI status in its country of residence. See Rev. Proc. 2014-13 to review the FFI agreement for other requirements of a Lead FI that is also a participating FFI.

Sponsoring/Sponsored Entities

Q11.

We are a Sponsoring Entity, and we would like to register our Sponsored Entities. How do we register our Sponsored Entities?

The Sponsoring Entity that agrees to perform the due diligence, withholding, and reporting obligations of one or more Sponsored Entities pursuant to Treas. Reg. §1.1471-5(f)(1)(i)(F) should register with the IRS via the FATCA registration website to be treated as a Sponsoring Entity. To allow a Sponsoring Entity to register its Sponsored Entities with the IRS, and, as previewed in Notice 2013-69, the IRS is developing a streamlined process for Sponsoring Entities to register Sponsored Entities on the FATCA registration website. Additional information about this process will be provided by the IRS at a later date.

While a Sponsoring Entity is required to register its Sponsored Entities for those entities to obtain GIINs, the temporary and proposed regulations provide a transitional rule that, for payments prior to January 1, 2016, permit a Sponsored Entity to provide the GIIN of its Sponsoring Entity on withholding certificates if it has not yet obtained a GIIN. Thus, a Sponsored Entity does not need to provide its own GIIN until January 1, 2016 and is not required to register before that date.

Responsible Officers and Points of Contact

Q12.

What is a Point Of Contact (POC)?

The Responsible Officer listed on line 10 of Form 8957 (or the online registration system) can authorize a POC to receive FATCA-related information regarding the FI, and to take other FATCA-related actions on behalf of the FI. While the POC must be an individual, the POC does not need to be an employee of the FI. For example, suppose that John Smith, Partner of X Law Firm, has been retained and been given the authority to help complete and submit the FATCA Registration on behalf of an FI. John Smith should be identified as the POC, and in the Business Title field for this POC, it should state Partner of X Law Firm.

Q13.

Is the Responsible Officer required to be the same person for all lines on Form 8957 or the online registration (“FATCA Registration”)?

No, it is not required that the Responsible Officer (“RO”) be the same person for all lines on Form 8957 or the online registration.  It is possible, however, that the same person will have the required capacity to serve as the RO for all FATCA Registration purposes.

The term “RO” is used in several places in the FATCA Registration process.  In determining an appropriate RO for each circumstance, the Financial Institution (“FI”) or direct reporting NFFE should review the capacity requirements and select an individual who meets those requirements.  This will be a facts and circumstances determination.

Please note that the responsible officer used for registration purposes may differ from the certifying responsible officer of an FFI referenced in Treasury Regulation §1.1471-1(b)(116).  (See, however, below regarding “Delegation of RO Duties.”)

Below is a description of the required RO capacity per line:

Language from the Form 8957 Instructions and the FATCA Online Registration User Guide specifies that the RO for question 10 purposes is a person authorized under applicable local law to establish the statuses of the entity’s home office and branches as indicated on the registration form.  (See FAQ below for what it means to “establish the FATCA statuses” of the FI’s home office and branches or direct reporting NFFE.)

Part 1, Question 11b (Point of Contact authorization)

The RO identified in question 11b must be an individual who is authorized under local law to consent on behalf of the FI or direct reporting NFFE (“an authorizing individual”) to the disclosure of FATCA-related tax information to third parties.  By listing one or more Points of Contact (each, a “POC”) in question 11b and selecting “Yes” in question 11a, the authorizing individual identified at the end of question 11b (to the right of the checkbox) is providing the IRS with written authorization to release the entity’s FATCA-related tax information to the POC.  This authorization specifically includes authorization for the POC to complete the FATCA Registration (except for Part 4), to take other FATCA-related actions, and to obtain access to the FI’s (or direct reporting NFFE’s) tax information.  Once the authorization is granted, it is effective until revoked by either the POC or by an authorizing individual of the FI or direct reporting NFFE.

Part 4

The authority required for an individual to be an RO for purposes of Part 4 is substantially similar to the authority required for RO status under Treas. Reg. § 1.1471-1(b)(116).

The RO designated in Part 4 must be an individual with authority under local law to submit the information provided on behalf of the FI or direct reporting NFFE.  In the case of FIs or FI branches not governed by a Model 1 IGA, this individual must also have authority under local law to certify that the FI meets the requirements applicable to the FI status or statuses identified on the registration form.  This individual must be able to certify, to the best of his or her knowledge, that the information provided in the FI’s or direct reporting NFFE’s registration is accurate and complete.  In the case of an FI, the individual must be able to certify that the FI meets the requirements applicable to the status(es) identified in the FI’s registration.  In the case of a direct reporting NFFE, the individual must be able to certify that the direct reporting NFFE meets the requirements of a direct reporting NFFE under Treas. Reg. § 1.1472-1(c)(3).

An RO (as defined for purposes of Part 4) can delegate authorization to complete Part 4 by signing a Form 2848 “Power of Attorney Form and Declaration of Representative” or other similar form or document (including an applicable form or document under local law giving the agent the authorization to provide the information required for the FATCA Registration).

Note: While the certification in Part 4 of the online registration does not include the term “responsible officer,” the FATCA Online Registration User Guide provides that the individual designated in Part 4 must have substantially the same authority as the RO as defined for purposes of Form 8957, Part 4.

Delegation of RO Duties

While the ROs for purposes of Question 10, Question 11b, and Part 4 of the FATCA Registration may be different individuals, in practice it will generally be the same individual (or his/her delegate)).  The regulatory RO is responsible for establishing and overseeing the FFI’s compliance program.  The regulatory RO may, but does not necessarily have to, be the registration RO for purposes of 1) ascertaining and completing the chapter 4 statuses in the registration process; 2) receiving the GIIN and otherwise interacting with the IRS in the registration process; and 3) making the Part 4 undertakings.  Alternatively, the regulatory RO, or the FFI (through another individual with sufficient authority), may delegate each of these registration roles to one or more persons pursuant to a delegation of authority (such as a Power of Attorney) that confers the particular registration responsibility or responsibilities to such delegate(s).  The scope of the delegation, and the delegate’s exercise of its delegated authority within such scope, will limit the scope of the potential liability of the delegate under the rules of agency law , to the extent applicable.  The ultimate principal, whether that is the regulatory RO or the FFI, remains fully responsible in accordance with the terms and conditions reflected in the regulations, and other administrative guidance to the extent applicable under FATCA, the regulations.

Q14.

The Instructions for Form 8957 state that for purposes of Part 1, question 10, “. . .  RO means the person authorized under applicable local law to establish the statuses of the FI’s home office and branches as indicated on the registration form.”  What does it mean for an RO to have the authority to “establish the statuses of the FI’s home office and branches as indicated on the registration form”?

To have the authority to “establish the statuses” for purposes of question 10, an RO must have the authority to act on behalf of the FI to represent the FATCA status(es) of the FI to the IRS as part of the registration process.  This RO must also have the authority under local law to designate additional POCs.

Q15.

My FI plans on employing an outside organization (or individual) solely for the purpose of assisting with the registration process.  Once registration is complete, or shortly thereafter, my FI intends to discontinue its relationship with this organization.  Is this permissible under the FATCA registration system? How should my FI use the registration system to identify this relationship?

Yes, the FI or direct reporting NFFE may employ an outside organization to assist with FATCA registration and discontinue the relationship with the outside organization once registration is complete.  As part of the registration process, an FI or direct reporting NFFE may appoint up to five POCs who are authorized to take certain FATCA-related actions on behalf of the entity, including the ability to complete all parts of the FATCA Registration (except for Part 4), to take other appropriate or helpful FATCA-related actions, and to obtain access to the entity’s FATCA-related tax information.  The POC authorization must be made by an RO within the meaning of Part 1, question 10.  Part 4 must be completed by the RO or a duly authorized agent of the RO.  (See FAQ 1 for a discussion of the process for delegating authorization to complete Part 4.)

Once the services of a POC are no longer needed, the RO may log into the online FATCA account and delete the POC.  This process revokes the POC’s authorization.  At this point, the Responsible Officer can input a new POC, or leave this field blank if they no longer wish to have any POC other than the RO listed on Line 10.

If a third-party adviser that is an entity is retained to help the FI or direct reporting NFFE complete its FATCA registration process, the name of the third-party individual adviser that will help complete the FATCA registration process should be entered as a POC in Part 1, question 11b, and the “Business Title” field for that individual POC should be completed by inserting the name of the entity and the POC’s affiliation with the entity.  For example, suppose that John Smith, Partner of X Law Firm, has been retained and been given the authority to help complete the FATCA Registration on behalf of FI Y.  John Smith should be identified as the POC, and in the Business Title field for this POC, it should state Partner of X Law Firm.

Financial Institutions

Q16.

Are U.S. Financial Institutions (USFIs) required to register under FATCA? If so, under what circumstances would a USFI register?

A USFI is generally not required to register under FATCA. However, a USFI will need to register if the USFI chooses to become a Lead FI and/or a Sponsoring Entity or seeks to maintain and renew the QI status of a foreign branch that is a QI. Furthermore, a USFI with a foreign branch that is a reporting Model 1 FFI is required to register on behalf of its foreign branches (and should identify each such branch when registering). A USFI with non-QI branch operations in a Model 2 jurisdiction or in a non-IGA jurisdiction is not required to register with the IRS.

Q17.

Is a Foreign Financial Institution (“FFI”) required to obtain an EIN?

If the FFI has a withholding obligation and will be filing Forms 1042 and Forms 1042-S with the Internal Revenue Service, it will be required to have an EIN. Please see publication 515 (“Withholding of Tax on Nonresident Aliens and Foreign Entities”) for further information about U.S. Withholding requirements. SeePub. 515. An FFI is also required to obtain an EIN when it is a QI, WP, or WT (through the application process to obtain any such status) or when the FFI is a participating FFI that elects to report its U.S. accounts on Forms 1099 under Treas. Reg. §1.1471-4(d)(5).

How does a FFI apply for a EIN if it does not already have one?

If a FFI does not have an EIN, it may apply for one using Form SS-4 (“Application for Employer Identification Number”) or the online registration system. See Apply-for-an-Employer-Identification-Number-(EIN)-Onlinefor more information.

Exempt Beneficial Owners

Q18.

We are a foreign central bank of issue. Will we be subject to FATCA withholding if we do not register?

You will generally be exempt from FATCA Registration and withholding if you meet the requirements to be treated as an exempt beneficial owner (e.g. as a foreign central bank of issue described in Treas. Reg. § 1.1471-6(d), as a controlled entity of a foreign government under Treas. Reg. §1.1471-6(b)(2), or as an entity treated as either of the foregoing under an applicable IGA). A withholding agent is not required to withhold on a withholdable payment to the extent that the withholding agent can reliably associate the payment with documentation to determine the portion of the payment that is allocable to an exempt beneficial owner in accordance with the regulations. However, an exempt beneficial owner may be subject to withholding on payments derived from the type of commercial activity described in Treas. Reg. § 1.1471-6(h).

Q19.

We are a foreign pension plan. Will we be subject to FATCA withholding if we do not register?

You will be exempt from FATCA Registration and withholding if you meet the requirements to be treated as a retirement fund described in Treas. Reg. § 1.1471-6(f), or under an applicable IGA. A withholding agent is not required to withhold on a withholdable payment to the extent that the withholding agent can reliably associate the payment with documentation to determine the portion of the payment that is allocable to an exempt beneficial owner (in this case, a retirement fund) in accordance with the regulations.

NFFEs

Q20.

How should an entity seeking the FATCA status of “direct reporting NFFE” (other than a sponsored direct reporting NFFE) register for this status to obtain a GIIN in order to avoid FATCA withholding?

A direct reporting NFFE is eligible to register for this status and when registering should complete an online registration (or, alternatively, submit a paper Form 8957) based on the instructions provided in this FAQ.   For registrations occurring in years after 2014, it is anticipated that both the online registration user guide and the Instructions for Form 8957 will be updated to incorporate this information.

In general, for purposes of completing the registration of a direct reporting NFFE, substitute the words “direct reporting NFFE” for the words “financial institution” wherever  they appear in the online registration user guide (or in the Instructions for Form 8957).  Unless specific instructions for a registration question are described here in this FAQ, please use the generally applicable instructions provided in the online registration user guide (or in the Instructions for Form 8957).

Part 1

Question 1 – – Select “Single”.

Question 4 – – Select “None of the above”.

Question 6 – – Select “Not applicable”.

Question 7 – – Select “No”.  (If using the portal online, selecting “no” will automatically skip Questions 8 and 9.)

Question 8 – – Skip this question (which relates to branches)

Question 9 – – Skip all parts (a) through (c) of this question (which relate to branches).

Question 10 – – Enter the information of the individual who will be responsible for ensuring that the direct reporting NFFE meets its FATCA reporting obligations and will act as a point of contact with the IRS in connection with its status as a direct reporting NFFE.

Part 2 – – It is not necessary for a direct reporting NFFE to complete this section. (If using the portal online, selecting Single in question 1 will automatically skip Part 2.)

Part 3 – – It is not necessary for a direct reporting NFFE to complete this section. (If using the portal online, selecting “Not Applicable” in question 6 will automatically skip Part 3.)

Part 4 – – The individual who completes this part must have the authority to provide the certification.

Direct reporting NFFE QIs/WPs/WTs should renew their agreements through the existing traditional paper process.  Instructions can be found at the following link (Question IX), see:Qualified-Intermediary-Frequently-Asked-Questions

Q21.

How should a sponsor of a sponsored direct reporting NFFE register itself for this status and obtain a GIIN?

A sponsor of a sponsored direct reporting NFFE is a sponsoring entity (see Treas. Reg. § 1.1471-1T(b)(124)) and  should complete an online registration (or, alternatively, submit a paper Form 8957) as a sponsoring entity, based on the instructions provided in this FAQ.  A sponsoring entity need only complete one registration to act as the sponsor for both sponsored FFIs and sponsored direct reporting NFFEs.  For registrations occurring in years after 2014, it is anticipated that both the online registration user guide and the Instructions for Form 8957 will be updated to incorporate this information, including by incorporating the definition of sponsoring entity provided in Treas. Reg. § 1.1471-1T(b)(124).

In general, for purposes of having a sponsor register a sponsored direct reporting NFFE, substitute the words “sponsor of a direct reporting NFFE” for the words “sponsoring entity” wherever they appear in the online registration user guide (or in the Instructions for Form 8957).  Unless specific instructions for a registration question are described here in this FAQ, please use the generally applicable instructions provided in the online registration user guide (or in the Instructions for Form 8957).

Part 1

Question 1 – – Select “Sponsoring Entity”.

Question 4 – – Select “None of the above”.

Question 6 – – Select “Not applicable”.

Question 7 – – Select “No”. (If using the portal online, selecting “no” will automatically skip Questions 8 and 9)

Question 8 – – Skip this question (which relates to branches)

Question 9 – – Skip all parts (a) through (c) of this question (which relate to branches).

Question 10 – – Enter the information of the individual who will be responsible for ensuring that the direct reporting NFFE meets its FATCA reporting obligations and who will act as a point of contact with the IRS in connection with its obligations as a sponsoring entity.

Part 2 – – It is not necessary for a sponsor of a direct reporting NFFE to complete this section.  (If using the portal online, selecting Sponsoring Entity in question 1 will automatically skip Part 2.)

Part 3 – – It is not necessary for a sponsor of a direct reporting NFFE to complete this section. (If using the portal online, selecting “Not Applicable” in question 6 will automatically skip Part 3.)

Part 4 – – The individual who completes this part must have the authority to provide the certification.

Registration Update

Q22.

Why has my registration been put into “Registration Incomplete”? What can I do?

If your registration has been put into Registration Incomplete status, it is because the IRS has identified an issue with your registration.  If you are Registration Incomplete status, please review your registration for any of the following errors and update it accordingly:

  1. The FFI has identified itself as a Qualified Intermediary with a QI-EIN of which the IRS has no record.  (If you have QI, WP or WT Agreement signed with the IRS, please contact the Financial Intermediaries Team for further assistance.)

  2. The RO has been identified with initials only and no specific name has been provided.

  3. The RO does not appear to be a natural person.

  4. Notice 2013-43 stated that any registrations submitted prior to  January 1, 2014 would be taken out of submit and put into Registration Incomplete status. Thus, if your registration was submitted prior to  January 1, 2014, you must  re-submit your registration assuming that none of the other abovementioned reasons (1-3) are an issue with the FFI’s registration.

After you have updated your registration, you must resubmit in order for your registration to be processed.

Additional FAQs are available for the FATCA Registration System and the FATCA FFI List.

book coverPractical Compliance Aspects of Exchange of Information, FATCA and GATCA

For in-depth analysis of the practical compliance aspects of financial service business providing for exchange of information of information about foreign residents with their national competent authority or with the IRS (FATCA), see Lexis Guide to FATCA Compliance, 2nd Edition just published!

The LexisNexis® Guide to FATCA Compliance (2nd Edition) comprises 34 Chapters 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. The 34 chapters include many practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA.  Chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, insights as to the application of FATCA and the IGAs within new BRIC and European country chapters.

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