FATCA IGA Scoreboard – China and more than a dozen other nations join the roster

A rush of intergovernmental agreements have been announced in the past few days, as over a dozen nations and jurisdictions consented to become FATCA partners just days, or in some cases hours, before the law’s July 1 effective date.

The new IGA nations boost the global adoption of FATCA, with many smaller nations and emerging economies signing on. China is the most notable addition to the list, entering into an “in substance” Model 1 agreement with little advance notice on June 26. Whether Chinese institutions would participate in FATCA has long been a subject of speculation. Other additions range from Iraq, Algeria and Nicaragua, to the tiny micro-state of San Marino.

In total, 99 nations have now enlisted as partners in implementing FATCA, with twelve added on June 30 alone. Over the past six months, the US Treasury has made major strides enlisting nations as FATCA partners, adding more than 60 since the start of 2014.  As the US recognizes 263 countries and other jurisdictions worldwide, that leaves financial institutions in 164 jurisdictions not currently covered by an IGA.

The IRS released its first list of financial institutions who have registered and agreed to comply with FATCA earlier this month. More than 77,000 financial institutions were included on that list, of an estimated 200,000 – 400,000 financial institutions worldwide with FATCA compliance obligations.

The IRS has recently announced that 2014 and 2015 will serve as a “transitional period,” taking some of the immediate pressure off financial institutions as they implement compliance programs.

The list of FATCA partners expanded dramatically on April 2, when the US Treasury Department deemed 22 nations as having IGAs in effect because they had already negotiated “agreements in substance.” IGAs delineate the terms of FATCA compliance by partner nations and their financial institutions.

The ACFCS FATCA IGA Scoreboard continually updates the list of nations that have signed IGAs, entered into active negotiations with the US, or have shown little progress in reaching common ground with the US on FATCA implementation and compliance.

Nations with Model 1 IGAs with the United States

Nations with Model 2 IGAs with the United States

*Indicates jurisdictions with FATCA “agreements in substance” that the US Treasury Department will consider to be IGAs in force.

Next Likely FATCA IGA Signatory Nations

The following nations and jurisdictions are believed to be engaged actively in negotiations with the United States on a FATCA IGA.

  • Argentina

Editor’s Note: Nations that sign FATCA “Intergovernmental Agreements” with the United States adopt Model I or Model II IGAs. Model I IGAs establish procedures for “Foreign Financial Institutions” (FFI) to report financial account information about US persons to the pertinent local authority, which transmits the information to the US IRS. Under Model II agreements, an FFI reports directly to the IRS.