CASTRIES, St Lucia, Thursday June 28, 2012 – Members of the Caribbean Association of Banks Inc. (CAB) are escalating their concerns about the new United States Foreign Account Tax Compliance Act (FATCA) to the regional ministers of finance.
The purpose of FATCA is to “detect, deter and discourage offshore tax evasion” by US citizens or residents and as a result establishes new reporting and withholding requirements on financial services providers in the region.
A recent media release from CAB stated that they had presented a position paper on FATCA to CARICOM and would be making a presentation on the subject at the CARICOM Council of Finance and Planning (COFAP) meeting scheduled to be held in St Lucia on Saturday (June 30).
This is not the first time that the new US legislation has blipped on the regional body’s radar. According to the CAB, since the enactment of FATCA in March 2010, the CAB has been very concerned about its implications for financial services institutions, corporations, individuals and the industry as a whole. As a result the CAB has taken steps to raise the awareness of the industry in that regard. FATCA was featured as a topic at the CAB conference in 2011and engendered much interest and discussion.
The body also held an awareness session for more than 70 members of banking, insurance, credit union, accounting and legal sectors, as well as representatives from the public sector, in St Lucia collaboration with PricewaterhouseCoopers on June 13 to highlight the Act’s implications for banks and other financial services institutions.
Coming out of this session, participants raised a number of concerns about FATCA’s impact including potential conflict with local privacy laws; impact of tax information exchange agreements and double taxation laws which may not exist in some countries; questions about governments’ roles given there have been few public announcements or statements by regional governments or regulators; the huge cost of compliance; the changes required to systems, technology and processes before January 2013; individual expense that may be incurred to prove an individual is not a US citizen, should they fall within any of the US person indicators; and the responsibilities of support professionals such as auditors and lawyers
The Caribbean Association of Banks, Inc is a community of banks and other financial institutions in the Caribbean/CARICOM region, whose mission is to advance the interest of member institutions through advocacy, networking, provision of training and other solutions to strengthen the Caribbean financial sector.