US Banking Giant Steps In To Rescue FATCA Refugees

US Banking Giant Steps In To Rescue FATCA Refugees

US Banking Giant Steps In To Rescue FATCA RefugeesAll is not lost for American expats looking for overseas banking as the Foreign Account Tax Compliance Act (FATCA) rumbles towards starting next year.

One of the unforeseen effects of the act is a number of banks turning away US clients so they do not have to comply with FATCA.

One US banking giant, BNY Mellon is welcoming US expats in Hong Kong to open new accounts and small wealth management companies are springing up worldwide to cater for Americans with nowhere else to go.

BNY Mellon president Karen Peetz said her bank wants to expand in Asia and that she considers managing investments for US expats is in Hong Kong is one way into the market.

“BNY Mellon sees opportunity as non-US banks are hesitating to offer services to Americans due to the growing regulatory burden of FATCA,” she said.

Banking problems for US expats

In the UK, HSBC has pledged shut accounts for US clients, while UBS and Brewin Dolphin refuse to do business with Americans living in there.

FATCA only applies to financial firms outside America with US clients. Britain and the European Union are consulting on their own version of FATCA which may further complicate tax and banking matters for expats further down the road.

Meanwhile, other FATCA news includes the US Federal register revealing 1,131 US citizens handed back their passports in the second quarter of 2013, compared with the same 12 months last year, when just 189 passports were discontinued.

That makes 1,810 people giving up their passports in the first six months of the year, compared with just 235 for the whole of 2012.

FATCA is blamed for the increase, reports Bloomberg News.

FATCA negotiations

The tentacles of FATCA are spreading still wider. The US Treasury reports discussion with more than 50 countries relating to signing FATCA tax and financial swap information agreements.

Japan and Bermuda have announced signing agreements, while a host of Caribbean countries are in the throes of signing up to FATCA. Jamaica and Bahamas are about to start negotiations, while Belize and British Virgin Islands are considering their options.

Behind-the-scenes, the Internal Revenue Service and US Treasury and working on FATCA administration.

A new web site for foreign financial institutions to sign up as FATCA-compliant entities is due to open within the next few weeks.

The Treasury has also issued forms and guidance for foreign financial institutions on information required about their American customers.

1 thought on “US Banking Giant Steps In To Rescue FATCA Refugees”

  1. I’m just going to renounce. Why should my Canadian spouse have to move his bank just because he’s married to a U.S. citizen or my child who I also share an account with. I’m not fond of this new industry in a way because all it does is encourage FATCA’s madness. A good number of us are long term expats married to foreign citizens with all our funds tied up with a foreign citizen. It’s not right that our foreign family has to be forced to lose their bank account and mortgage because of us. Here in Canada FATCA is going to be a Charter Challenge because it violates our Charter of rights. The bank will have to ask you to waive your rights to be able to bank there and as soon as they do that then you can sue them. A leading constitutional expert, actually two of them have weighed in on this matter and there will be law suits here. FATCA is the most harmful thing the U.S. has ever done to U.S. expats living outside the U.S. long term. It just impossible to comply with unless you are wealthy.

    It’s not just their “American customers” who will be treated like they are a criminal until they prove otherwise but, all our foreign family all over the world too. The U.S. ought to just let long term expats out of this mess by not requiring any filing after you have been living outside the U.S. longer than five years if you have no holdings at all there and no plans to move back at all. In fact a lot of us don’t have any prospect to move back even if we wanted to as we nor our spouses have any job there. If this only applied to U.S. persons it would be bad enough but, it’s applied to anyone we have “signing authority” with and that has caused a whole other world of problems for us. It has been made very clear to me that the U.S. doesn’t care about these problems and therefore I’ll just renounce.

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