FATCA weather report – extreme turbulence in 2015

As of today’s date, December 11, 2014, if you include those “in substance” IGA jurisdictions, introduced as a direct result of Announcement 2014-38, there are now 112 FATCA IGAs in place.

There are 131 jurisdictions with no IGA in place.

According to the IRS December 2014 list of “approved FFIs” approximately 123 thousand institutions have registered on the IRS FATCA Portal.

By any estimate this number indicates that the majority (more than half) of FFIs have yet to register on the IRS FATCA Portal.

The UK and her Crown Dependencies and Overseas Territories, (most notably the Cayman Islands) represent 44% of the total number of FFIs registered on the FATCA Portal.

There are 98 jurisdictions who have an IGA Model 1 (either signed or in substance).

Up to December 31, 2014 (this month) FFIs in IGA Model 1 countries have not had to produce a GIIN to be treated as Participating.

As of January 1, 2015, they do. Those that do not can no longer be treated as participating FFIs.

Given that many FFIs in Model 1 IGA Countries still have no GIIN, 2015 may prove to be an interesting year – unless, of course the number of GIIN registrations in the remainder of this month “sky rockets” which seems unlikely.

With 131 jurisdictions having no IGA and with the number of registrations on the IRS portal, from Non IGA Countries, representing less than 5% of the total number of those registered, we have another reason to believe that 2015 is going to be interesting.

There is an additional reason. For those jurisdictions outside of an IGA, (131,) there is a deadline of December 31, 2014 for FATCA CDD on Prima Facie FFIs. To oversimplify, a Prima Facie FFI is an FFI that looks like it might be an FFI based on things like industry codes.

This deadline does not exist in IGA countries because the IGAs themselves contain no such category as “Prima Facie FFI”.

Those countries outside of an IGA have a December 2014 deadline that those inside an IGA do not.

To recap

  • 113 jurisdictions with a deadline of December 31, 2014.
  • Less than half of those FFIs who should have registered on the IRS Portal have done so.
  • All model 1 FFIs need a GIIN by January 1, 2015 to retain their FATCA Status.

2015 will be eventful. Enjoy the break. Many of us will need to return to work, after the break, well rested and ready for the turbulence ahead.

Happy Holidays and if you are an FFI that has not already done so, register for a GIIN.

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