Monday, June 2, 2014

Banks -- Many Banks -- Are Becoming FATCA Compliant; Good News for U.S. Ex Pats (6/2/14; 6/3/14)

Readers and I have had considerable discussion about the problems of U.S. ex pats obtaining banking services in their country of residence.  See the comments to the following blog: Thoughts on What Swiss and Other Offshore Banks Whose Business Model of Secrecy Is No Longer Viable (Federal Tax Crimes Blog 5/27/14), here.  Many ex pats report encountering resistance from non U.S. financial firms (banks, etc.) to providing their banking services.  I can offer no anecdotal or statistically valid evidence and comment on that issue.  I don't doubt the sincerity of the readers comments and concerns.  (Commenters also report resistance from U.S. financial firms to providing such services to ex pats, but that is not the topic of this blog.)

I have noted that, if there is a need for such services, profit seeking banks will fill that need.  That sounds like an easy thing to say from my vantage point.  But, that is all I have had to offer, other than the notion that banks becoming FATCA compliant will almost sure promote their services to U.S. customers, including ex pats.

In that regard, Reuters has this report today:  Patrick Temple-West, U.S. says 77,000 banks, firms sign up to fight tax evasion (Reuters 6/2/14), here.   In my mind, the title of this article is a bit misleading.  Those banks are not signing up because they want to fight tax evasion.  They are signing up because they want profit.  And, there is more profit to be made by signing up than by not signing up.  (Note: One commenter said that those joining want to avoid loss, but that is another that a profit seeking firm seeks profit.)

Perhaps not all of those will welcome U.S. depositors, but I suspect that a healthy number of them will.  They will be FATCA compliant anyway and the extra compliance required for U.S. depositors will be relatively minor.  So, there may be a transition period where ex pats are facing minor and major inconveniencies in obtain foreign banking services.  But hold on.  The banks will seek profit from you.  If they will not hug and kiss you on sight, they will at least take your deposits and serve your banking needs.

Having said that, if U.S. ex pats desire U.S. brokerage services and advice, I can make a recommendation to them of a U.S. firm willing to make sure that those needs are met, with all the legal niceties attended to.  Please email me at  There are some "preclearance" requirements as to amounts and characteristics of the investor.  We can discuss those offline.

JAT Note:  Above is as revised on 6/3/14)

Addendum 6/3/14:

See also Robert W. Wood, IRS Nets Offshore Data From 77,000 Banks, 70 Countries In FATCA Push (Forbes 6/3/14), here.  Not much new here, but he does offer the following links:

  • IRS FATCA Foreign Financial Institution (FFI) List Search and Download Tool, here.
  • User Guide to the above, here.
  • Countries with IGAs in effect, here.

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