Annual Report - paperJam

do not enter into an agreement with the Internal
Revenue Service (IRS). A new US withholding
tax of 30% is applied on interest, dividends and
gross sales proceeds (on the capital redeemed
or sold) paid to foreign financial intermediaries.
FATCA imposes upon FFIs the obligation to apply
specific client identification rules that go beyond
existing EU and / or domestic anti-money laundering
(AML) and know your customer (KYC)
rules. FATCA also imposes an obligation to close
accounts held by “recalcitrant” accountholders.
Recalcitrant accountholders are clients that do
not respect the additional conditions that the US
are intending to impose (compared to the KYC
rules applicable under the FATF and 3 rd anti-money
laundering directive rules) and do not provide
the FFI with specific documentation determining
their non US status. FATCA imposes upon FFIs
an obligation to report the number of recalcitrant
accountholders and their assets. It will become
applicable as of 1 January 2013.
Together with the European Banking Federation
(EBF), the ABBL has submitted to the US authorities
(notably to the IRS) numerous comments and
proposals in relation to the provisions of FATCA.
There has been a feeling of frustration amongst
many EBF members following the release of
Notice 2010-60 by the US Treasury, as the notice
clearly shows that the Treasury and the IRS are
not interested in looking into the conceptual
proposals that have been drafted with great care
by the European banking industry. It should be
emphasised that the preoccupations expressed,
which led to the very detailed and substantial
proposals, were shared by many other financial
centres in the world, like Japan, Canada, etc.
The release of notice 2010-60 and its ensuing
analysis can only lead to the following
conclusion:
• The FATCA provisions are not implementable
by European banks without the allocation of
enormous and disproportionate financial and
human resources;
• This is even more true for smaller Foreign
Financial Intermediaries (FFIs) concerned,
which, in contrast to much lower US estimations,
are estimated to easily reach a figure
of 100,000 entities in the world;
• Future US guidance with respect to FATCA is
expected, and this will very probably add new
layers of complexity;
• The ongoing administration of the FATCA
regime will in itself consume considerable
amounts of banks’ internal resources.
25 February 2010
Presentation of the Fit4Job pilot program, jointly developed
by the Ministry of Labour, ADEM, the ABBL and the IFBL
with the aim to accompany persons made redundant in
the financial sector to be re-employed.
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