Foreign Account Tax Compliance Act (FATCA) – practical steps to efficient compliance

The US is ramping up its efforts torecover tax from those liable to pay and foreign financial institutions with a US footprint must cooperate in identifying the evaders or face 30% withholding tax on US-sourced income. Combing the customer base for US taxpayers is no small task but it breaks down into clear, manageable actions, says Dr Tony Wicks, Director of AML Solutions at NICE Actimize.

Tony Wicks (tony.wicks@actimize.com, +44 (0) 20 7255 1065) is Director of AML Solutions at NICE Actimize.

The Foreign Account Tax Compliance Act (FATCA), signed into US law in March 2010 and effective in January 2013, has serious implications for any institution that conducts business with the US. The comprehensive nature of the legislation means that a broad range of financial institutions – including retail, commercial, and investment banks; securities and brokerage firms; private banking; and wealth management – will be impacted. Essentially, an institution that does any business with the US needs to adopt the procedures, processes, and systems necessary for FATCA compliance, irrespective of whether it has named US account holders.