The governments of Jersey, Guernsey and the Isle of Man have jointly announced the start of negotiations with the US to ease implementation of the Foreign Accounts Tax Compliance Act (FATCA).
FATCA requires foreign banks to report the affairs of their American clients to the US Internal Revenue Service and apply financial sanctions for non-compliance, starting in January 2013. The Act presents serious problems for many jurisdictions because of clashes with their domestic laws.
The UK and some other European countries have gone some way towards solving these problems by negotiating partnership agreements with the US. Now the three Crown Dependencies have committed themselves to the same path. Each will sign its own individual partnership agreement with the US, but all will be based on the US-UK agreement published in July and finalised last month.
Guernsey Finance Chief Executive Fiona Le Poidevin noted that the final form of the US-Guernsey agreement was not yet known, though discussions have already taken place between the US and the Crown Dependencies jointly.
She said it was ‘encouraging’ that the three Crown Dependencies are taking a common approach, especially for companies that have offices in two or more of the Islands.
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