"The earliest date for adoption of CRS on a state by state basis will be 2015."
"The consequences of non-registration (or a failure properly to classify and verify Accounts) will be severe."

The Foreign Account Tax Compliance Act ("FATCA") – update

11 Nov 2015

FATCA was introduced by the United States in 2010. By the end of 2013 many overseas jurisdictions, including, in particular, Jersey, Guernsey, Cayman and the British Virgin Islands (Crown Dependencies and Overseas British Territories) had entered into Intergovernmental Agreements ("IGAs") with both the government of the USA and (in the case of the Crown Dependencies and Overseas British Territories) the government of the United Kingdom.

The primary purpose of these IGAs was to implement FATCA in order to provide proactive tax information reporting on Accounts (as defined in the relevant IGAs) held for tax residents of the USA or the UK, as the case may be.

Subsequent to the adoption of FATCA by IGAs in respect of the USA and UK, the OECD has published a paper setting out a framework for comprehensive release of financial information for tax reporting purposes on a global basis in respect of Accounts held with Financial Institutions (as defined in the relevant IGAs). This framework document, known as Common Reporting Standards ("CRS"), would introduce FATCA type reporting in respect of Accounts held in all OECD member jurisdictions and require Financial Institutions in such jurisdictions to verify tax residence of their customers and collate and report relevant information to their local taxation authority for onward transmission to taxation authorities in each tax payer's own country of tax residence. To date, more than 40 OECD member countries have indicated an intention to adopt CRS to be implemented in the same manner as FATCA by Intergovernmental Agreement. The earliest date for adoption of CRS on a state by state basis will be 2015 but, inevitably, in a project as ambitious as this, there are likely to be delays, as there have been with the implementation of US and UK FATCA.
 
CURRENT STATUS OF IMPLEMENTATION OF US AND UK FATCA BY BEDELL TRUST COMPANY, OCORIAN AND THEIR SUBSIDIARIES IN ANY JURISDICTION FOR WHICH FATCA REPORTING APPLIES
We have subdivided the implementation project into four overlapping phases:

[please see pdf document for table]


WHAT OCORIAN NEEDS FROM ITS CUSTOMERS

Following the publication of this briefing, we will be in touch (by our usual means of communication) with all our Customers to complete the CLASSIFICATION and VERIFICATION processes referred to above.

We will need your urgent co-operation with these processes, in order to be able to register Entities where appropriate.

The consequences of non-registration (or a failure properly to classify and verify Accounts) will be severe. Banks and other Financial Institutions through whom financial transactions are undertaken may be obliged to withhold 30% from all proceeds of Accounts maintained in US Dollars (whether income or capital) held in Accounts for which a GIIN cannot be supplied if classified as held by an FFI.

For new Accounts (in any currency), it is unlikely that the Banks and other Financial Institutions will accept new business, unless the appropriate CLASSIFICATION, VERIFICATION and, where necessary, REGISTRATION (and obtaining of a GIIN) has been completed.

Thus, any Entities for which we have not been able to complete the processes by 22 December 2014 may be "frozen out" of the global banking system from the beginning of 2015.

COSTS
It is inevitable that the costs of compliance with FATCA Reporting will be significant both at the initial CLASSIFICATION, VERIFICATION and REGISTRATION stage and at the ongoing REPORTING stage, where necessary.

These costs will become an inevitable part of undertaking "cross border" banking and financial transactions.

Ocorian aims to be as transparent and efficient in its charging structure as possible and, to that intent, we have developed a charging format for each stage of the process, as listed above.  Details of these charges are available on request.

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