FATCA: Implications for banks 

This new reporting and withholding regime presents significant challenges for FFIs in identifying US accounts and subsequently identifying and evaluating relevant payments for compliance. In order to comply with the FATCA provisions and to avoid the 30% withholding tax, the FFI must enter into a disclosure agreement with the U.S. Treasury and agree to:

• identify U.S. investors;
• comply with verification and due diligence procedures;
• perform annual reporting;
• deduct and withhold 30% from any passthru payment made to a recalcitrant account holder or another institution without an FFI agreement; and
• comply with requests for additional information.

Complying with the FATCA rules will not only be a major compliance task to fulfill due to extended information reporting but will also influence your business strategy and the markets you serve.   The impact on the investment funds is not negligible and requires assistance of specialists.   KPMG can:   Create visibility for your organisation Assistance with Comments : drafting and submitting comments to the Treasury and IRS.
Education of Senior Management : assisting those tasked with addressing the implementation of FATCA in clearly illustrating the impact on the business and its clients to senior management. Development of Project Teams : working with internal project teams to identify the necessary resources for FATCA projects and can provide technical and practical guidance to FATCA project teams during the implementation process.
Development of Implementation Plans : assistance in developing realistic, pragmatic, plans by utilizing our experience gained in other projects of similar scope and our deep understanding of the technical requirements. Payment Mapping Analysis : assistance with conducting a mapping exercise to determine where your business is impacted and the nature of accounts to which payments are made. Anti-Money Laundering (AML)/Know Your Client (KYC) Reviews : performing a review of the procedures in place for AML/KYC purposes to ascertain whether these will also be sufficient to ensure compliance with FATCA requirements.  We can also assist by developing new account opening procedures to facilitate FATCA compliance and provide training for staff responsible for these processes. Systems Analysis : identify the extent of current capabilities and where new functionality or data records will be needed.  We can also assist in developing or reviewing specification documents and, to the extent we are permitted from a regulatory perspective, to implement and test new functionality. FATCA Help Desk : help desk services that enable staff specified by clients to call with any technical questions related to FATCA.   Consult our FATCA Workshop brochure.pdf (250 KB)   Consult our FATCA Implications for banks brochure.pdf (228 KB)