One thought on “Why FATCA might be good for developing countries

  1. Hi Martin,

    I happen to have some vehement disagreements with Mr. Grinberg that I will try to share.

    1. To your point (Bizarrely, at present domestic US law prevents it from supplying the same information that it expects to receive from these governments, but plans are afoot to change this so that the exchange is reciprocal). I believe these changes to domestic US law will be blocked by the Republican Party and will never happen. In fact I know people in the Republican Party that aware of the Treasury Departments desire for these changes to domestic US law and intend to fight them to the end. Remember the Republican Party controls the US House of Representatives.

    2. Most other countries need to change there laws too to implement the reporting requirements required under the FATCA IGAs. In most if not all cases it can not be done through administrative fiat. For example the UK right now is giving HMRC the power to impose FATCA reporting requirements on UK FI’s through Finance Bill 2013. The UK however, is the exception not the rule and most other countries, France, Germany, Canada, Australia etc have made no public moves over the last two years to give their own tax authorities to power to actually implement FATCA level automatic exchange of information under their domestic law.

    3. In Canada particularly there has been vehement grassroots opposition to giving the Canada Revenue Agency the power under Canadian law to implement FATCA level reporting to put into force a FATCA IGA. Check out the websites below:

    http://maplesandbox.ca/

    http://isaacbrocksociety.ca/

    http://www.greenparty.ca/backgrounder/2013-01-28/backgrounder-canada-and-fatca

    http://www.greenparty.ca/media-release/2013-03-13/implementation-fatca-likely-unconstitutional-says-leading-constitutional-ex

    In the final link above a good overview is givin of the very real Constitutional problems in implementing a FATCA IGA in Canada.

    5. So FATCA in itself as a unilateral law of the US remains in effect there has been very little progress in turning it into the multilateral or even bilateral system envisioned by Mr. Grinberg.

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