A practical approach
Financial institutions need to act now in order to understand the scale of the compliance challenge they face and to have the best chance of an orderly and cost effective implementation of the required process and procedures. Many institutions are looking to reach a workable compliance standard applying the final regulations, or will need to apply provisions of the relevant Intergovernmental Agreement (IGA) signed by their countries with the United States. To have the best chance of reaching a workable solution, institutions are:
- Undertaking FATCA communication programs, including workshops, to increase the awareness and understanding of the new requirements within the business
- Undertaking risk assessments, including a gap analysis for existing compliance processes which need to be scalable to accommodate the demands of other potential disclosure regimes
- Following negotiations with the U.S. Treasury or local governments, either individually or through trade associations, to discuss potential conclusion of an IGA between their local country and US tax authorities and request concessions around the application of the legislation to existing accounts, the information to be obtained, the verification and due diligence procedures and the agreement of transitional provisions
- Developing compliance strategies and establishing effective project management structures to implement those strategies effectively
- Understanding the associated systems, data and process implications
- Specifying and implementing the required systems, data and process enhancements
Our team of Cyprus-based experts can support institutions through all FATCA implementation aspects. Deloitte has extensive experience of working with global and national financial institutions to address a wide variety of regulatory related issues, including AML policies and procedures.
In addition to Cyprus-based experts, we team with Deloitte's FATCA Centres of Excellence in New York and London where there are over 400 financial services professionals who have performed large scale regulatory investigations for major financial institutions. In addition to programme management and technical advice, these projects utilise a diagnostic approach to identify risk and then detailed data analysis and investigation to filter transactional and account information. Our tax team is experienced in all aspects of U.S. cross-border activities and in particular international information reporting and withholding regimes. Deloitte has outstanding relationships with the U.S. Treasury and the Internal Revenue Service and is uniquely placed to provide advice on good practice.
The IRS has released Notice 2013-43 pushing back the FFI Registration Portal opening and extending most of the FATCA deadlines established by the final regulations. The FFI Registration Portal is now open. The IRS also indicated that the opening was a soft launch, FFIs had the opportunity to start setting up their profiles and adding entities without actually committing to signing or registering, until January 1, 2014. On or after January 1, 2014, FFIs will be able to finalize their registrations through April 25, 2014 to appear on the first IRS FFI list to be posted on June 2, 2014. Generally, all prior deadlines related to the FFI agreement effective date, the Global Intermediary Identification Number (GIIN) registration deadlines for the first list, the last date to register for GIIN before withholding begins, the effective date of FFI agreement for registrations before withholding begins, and the transition period for affiliated group rule have been pushed back 6 months.
Updated FATCA Regulations Timeline Post Notice 2013-43
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