Planned US legislation will be onerous for firms in Jersey
Proposed legislation in the United States scheduled for introduction in just over two years time has major implications for finance industry businesses in Jersey and Guernsey.
Stephen Platt, a specialist financial crime and regulatory lawyer and Director of the Jersey International Business School, has issued a warning to the Industry that they need to act now to combat ‘the broadest tax and information exchange legislation ever enacted in the United States’. The impact will be felt across the banking, funds and wealth management sectors.
The US objective is to combat offshore tax evasion through increased information reporting and withholding tax requirements involving offshore payees and accounts beneficially owned by US citizens. The US Treasury and legislators are pressing ahead with the introduction of the HIRE Act, a part of which, the Foreign Account Tax Compliance Act (FATCA), has been designed to keep closer scrutiny on the overseas finances of US citizens and places significant extra compliance burdens on foreign finance institutions, with penalties if they do not comply.
For instance, under the current proposals trust companies which fail to sign up to the Act, which requires them to determine whether settlors or beneficiaries of a trust are US persons, would suffer a 30% gross withholding tax on all amounts invested into the US.
Stephen Platt will be highlighting the specific measures contained in FATCA when he co-chairs the sixth annual Economic Crime Symposium to be held at the Hotel de France on Thursday, November 11th. He joins a wide ranging list of specialist speakers including Philip Atkinson, the principal officer of Serious Organised Crime Agency, who leads the terrorist finance team within the UK Financial Intelligence Unit; John Roth, Special Assistant for International Money Laundering Policy for the US Department of Justice, who previously sat on the 9/11 Commission that investigated the terrorist attack on the US; Jack Blum, former senior counsel to the Committee on Foreign Relations at the US Senate; and Eric Lewis, a senior partner at a Washington DC law firm, Baach, Robinson & Lewis.
Stephen Platt commented:
‘There will be a requirement for finance industry firms in Jersey and Guernsey to amend their account opening procedures, there will be significant challenges to existing IT systems and the measures will impact on product development. Firms in both islands cannot ignore the compliance obligations because of the international nature of their businesses and they will need to look closely at the proposed measures soon to give themselves time to respond internally to any new US rules.’
The Symposium is organised by the Jersey International Business School in association with BakerPlatt and further details on attending as a delegate are available from www.jerseyibs.com, by e-mailing info@jerseyibs.com or by calling 01534 816333.
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