Christopher Thomas, Gleaner Writer
CARICOM HAS set up a taskforce to develop a plan for regional compliance to the United States' Foreign Accounts Tax Compliance Act (FATCA), which was instituted to tackle tax evasion.
Carlton Barclay, the chairman of the local organising committee for the Caribbean Association of Banks' (CAB), outlined the taskforce's mission while addressing the Montego Bay Chamber of Commerce and Industry's monthly meeting in Montego Bay last Wednesday.
"The CAB has developed a position paper to heighten the awareness and implications of the act for all relevant parties and stakeholders," said Barclay.
"This paper was submitted to CARICOM, and subsequently, CAB made a presentation on FATCA at the 50th meeting of the Council of Finance and Planning (the CARICOM finance committee meeting) on June 30, 2012 in St Lucia," Barclay added.
"This resulted in the formation of a CARICOM taskforce to formulate a plan of action, which would facilitate a regional approach toward compliance," he pointed out.
Myrtle Halsall, deputy governor of the Bank of Jamaica, is the chair of that FATCA taskforce.
FATCA, which became law in the United States on March 18, 2010, and is to be implemented on January 1, 2013, requires that registered banks report to the US Inland Revenue Service all US financial accounts that have a balance of at least US$50,000 or its equivalent.
US-born residents and persons with green cards, who hold accounts in that country, are subject to the requirements of the Act. Persons who do not hold green cards may also be subject to the Act, if they travel to the US for at least two months each year.
"Since the announcement by the US of the enactment of FATCA, the CAB has been very concerned about the implications for financial services institutions in the Caribbean and the resultant impact on the economies of the region as a whole," noted Barclay.
Additionally, Barclay told the chamber members that FATCA will be one of the key topics for discussion at CAB's upcoming 39th annual conference in Montego Bay. A legal team from the US is slated to be in attendance to assist in explaining the requirements of the Act.
"We'll be making suggestions as to how we should be dealing with the Act, and not just from a compliance point of view because, as I understand it, some of the requirements, if you comply with them, it would mean you'd be breaking the local laws," Barclay said.
"Whilst I have not heard much about it, I think this is something we ought to deal with, and this is one of the areas that will be dealt with extensively at the conference," added Barclay.
CAB is a community of locally incorporated banks and other financial institutions from within the Caribbean, possessing a combined US$31 billion in assets as of 2010.