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EFTA01115643 | EFTA01115665 18 alternative, known as Model 2 IGA, the foreign government agrees to permit its financial institutions to register with and supply specified FATCA disclosures directly to the IRS, with government-to-government cooperation to overcome any legal impediments to sharing the information.48 As of February 2014, the United States has concluded IGA agreements with 22 jurisdictions and is negotiating agreements with many more.49 FATCA provides a much stronger disclosure regime than the QI Program.50 It covers all types of foreign financial firms and accounts, requires the disclosure of accountholder names for all covered accounts as well as account balances and other account specific information, includes accounts opened by U.S. persons in the name of an offshore entity or nominee, and requires foreign financial institutions to take note of their know-your-customer and anti-money laundering information when determining account ownership.S1 On the other hand, FATCA's scope has been severely hobbled by implementing regulations which limit its application to foreign accounts with large dollar balances, a limitation with no statutory basis. The implementing regulations contain a number of other non-statutory restrictions that may also limit the usefulness of the disclosures ultimately made by foreign financial institutions. The U.S. effort to implement FATCA and establish automated annual account disclosures with foreign financial institutions in multiple countries is having a global impact. Not only are governments agreeing to require their financial institutions to participate, but some countries have decided to establish their own FATCA-like disclosure programs to obtain similar information for accounts opened by their nationals. The European Union, for example, is considering a proposal to establish its own automated information exchange, while six countries have already agreed to participate in a pilot program.53 The United Kingdom has also entered Model IB IGA, see the Treasury website, http://www.treasury.gov/resource-center/taxfolicyhreaties/Documents/FATCA-Nonreciprocal-Model-IB-Agreement-Preexisting-TIEA-or-DTC-I1-4-13.pdf. 8 See "Agreement between the Government of the United States of America and the Government of IFATCA Partner] for Cooperation to Facilitate the Implementation of FATCA," Model 2 IGA, Preexisting TIEA or DTC agreement (Nov. 4, 2013), http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Model2-Agreement-Preexisting-TIEA-or-DTC-I I.4-13.pdf. Both the Model 1 and Model 2 agreements also have two model annexes. For the text of those annexes, see the Treasury website, http:/Avww.treasury.gov/resourcecenter/tax-policy/treaties/Pages/FATCA.aspx. a See 2/6/2014 "U.S. Announces Agreement with Canada to Halt Offshore Tax Evasion," Treasury Department Press Release, http://www.treasury.gov/press-center/press-releases/Pages/j12285.aspx; 11/8/2012 "U.S. Engaging with More than 50 Jurisdictions to Curtail Offshore Tax Evasion," Treasury Department Press Release, http:/Avww.treasury.gov/press-center/press-releases/Pages/tg1759.aspx. S0 See, e.g., "Exporting FATCA," Joshua D. Blank and Ruth Mason (2/2014), 142 Tax Notes, forthcoming; NYU Law and Economics Research Paper No. 14-05, at 3, SSRN: http://ssm.com/abstract=2389500. 51 Id. at 3.4; FATCA, §501, codified at 26 U.S.C. §1471. 52 See Internal Revenue Bulletin 2012-8, T.D. 9567, 02/21/2012, http://www.irs.gov/irb/2012-08_IRB/ar10.html. 83 See 6/12/2013 "Proposal for a Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation," No. COM(2013) 348 final, http://ec.europa.eu/taxation_customs/resources/documents/taxation/tax_cooperation/mutual_assistance/direct_tax_di rective/com_2013_348_en.pdf. See also 5/27/2013 "A FATCA for the EU?" prepared by the Library for the European Parliament. http:/Avww.europarLeuropa.eu/RegData/bibliotheque/briefing/2013/130530/LDM_BRI(2013)130530_REV1_EN.pd f. Five countries initially agreed to participate in the pilot program, France, Germany, Italy, Spain, and the United Kingdom. In the summer of 2013, Mexico joined the pilot program as its first non-European participant. See "Mexico - FATCA-like program with European countries," prepared by KPMG (8/8/2013), EFTA01115665
May 9, 2026 at 11:05 PM