|Compliance Alert Overview June 2011(click here for .ppsx file)|
February 13, 2013
FATCA, NFFEs, and Draft W-8BEN-E – Unnecessary Complexity
The U.S. Treasury Department recently finalized the FATCA regulations.(FN 1)
The bulk of the regulations deal with certain U.S. source payments to foreign financial institutions (“FFIs”).
However, the regulations also require a withholding agent to generally withhold 30% of certain U.S. source payments (made after December 31, 2013) to a payee that is a non-financial foreign entity (“NFFE”) unless three requirements are met. The three requirements are:
- The beneficial owner of the payment is the NFFE or another NFFE;
- The withholding agent can treat the beneficial owner of the payment as an NFFE that does not have any substantial U.S. owners, or as an NFFE that has identified its substantial U.S...
The Alternative Investment Fund Managers Directive (AIFMD) regulates entities which manage alternative investment funds (AIFs). Such entities are referred to as an alternative investment fund managers (AIFMs). While the AIFMD regulates AIFMs, it is necessary to consider whether there is an AIF in the first instance.
AIFs are defined as collective investment undertakings, including their investment compartments, which raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors, and which do not require authorisation pursuant to the UCITS Directive (Directive 2009/65/EC)...Read More
China warns against use of Bitcoin
|English.news.cn 2013-12-05 18:03:59|
BEIJING, Dec. 5 (Xinhua) — China’s financial and payment institutions should not accept Bitcoin as legal tender, with Chinese authorities on Thursday warning of the risks related to the digital currency.
The warning was issued in a notice jointly released by the People’s Bank of China (central bank) and four ministerial departments — Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission.
The warning is aimed at protecting the property rights of the public, safeguarding the Renminbi status as a fiat currency, preventing money laundering and maintaining financ...
LONDON — The European Union has fined eight banks a combined 1.7 billion euros in a historic accord over alleged collusion to fix two benchmark interest rates.
The settlement, worth about $2.3 billion and announced by European Union antitrust officials on Wednesday, relates to alleged actions by traders at some of the world’s largest banks, including Citigroup, Royal Bank of Scotland and Deutsche Bank. The banks were accused of fixing rates for the London interbank offered rate, or Libor, as it relates to the Japanese yen and the euro interbank offered rate, or Euribor.
“The commission is determined to fight these cartels in the financial sector,” said Joaquín Almunia, the European Union’s competition commissioner, at a news conference in Brussels.
The penalties come after five ...Read More
Former HSBC boss Lord Green has called for an ‘ethically strong’ financial system – as the bank faces fresh money laundering allegations, writes James Salmon.
It is the first time the outgoing Trade Minister has spoken about morals in banking since HSBC, where he was chief executive then chairman, was fined £1.2bn for money laundering.
‘What we need in this economy is a robust, stable, profitable and ethically strong banking industry,’ he said.
HSBC has said it is cooperating with Belgian authorities after a number of dawn raids were carried out on diamond dealers in Antwerp as part of a sprawling tax evasion investigation which focuses on the British High Stre...Read More
Lebanon striving to adhere to U.S. regulationsDecember 02, 2013 01:00 AMBy Paul Cochrane
|The Daily Star|
|The Lebanese Canadian Bank in Beirut. (The Daily Star Photo)|
BEIRUT: Over the past decade, the U.S. Treasury’s war on terrorist financing, money laundering and tax evasion has shaken up the global financial regulatory environment, and Lebanon is still feeling the reverberations. This year, the Central Bank issued two circulars that have raised operational costs for banks and foreign exchange dealers: Lenders have been required to have a dedicated compliance unit and exchanges’ operational functions have been curtailed.
The circulars have had a profound affect on financial institutions, but those affected are not so much concerned about falling foul of...
By Ian Fraser
Published: Sunday Herald
Date: December 1st, 2013
Photo: Daily Mail
In a recent Business Focus, the Sunday Herald presented a rough guide to the £1 trillion of time bombs metaphorically ticking beneath the plush carpets of the Royal Bank of Scotland’s headquarters. What we didn’t predict was that two of these would explode in the faces of the bank’s chief executive Ross McEwan and chairman Sir Philip Hampton, within a month of that piece.
The first explosion came on 7 November when the Gogarburn-based bank reached a $154m (£93m) settlement with the Securities & Exchange Commission after misleading investors in $2.2bn residential mortgage-backed securities (RMBS) assembled by its US arm RBS Greenwich Capital in April 2007...Read More
For the seventh year running, The Economist Intelligence Unit, commissioned by Kroll, surveyed senior executives from around the world across a wide variety of sectors and functions. This year’s 901 respondents report that fraud remains a widespread problem regardless of the industry or region in which their businesses operate. It is also as protean, and hence unpredictable, as ever. The results of our 2013 report reveal a number of key insights:
1. The incidence and costs of fraud rose markedly in the past year, in turn driving up companies’ sense of vulnerability.
According to this year’s survey, the level of fraud increased by every measure in the past 12 months, reversing recent trends...Read More
Summary of Key FATCA Provisions
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, is an important development in U.S. efforts to combat tax evasion by U.S. persons holding investments in offshore accounts.
Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS. In addition, FATCA will require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
Reporting by U.S. Taxpayers Holding Foreign Financial Assets
FATCA requires certain U.S...Read More
The United States has signed agreements with the Cayman Islands and Costa Rica to help those countries’ banks comply with an anti-tax evasion law starting next year, the Treasury Department said on Friday. The deals are part of the U.S. effort to enforce the Foreign Account Tax Compliance Act (FATCA), enacted in 2010 and set to take effect in July 2014.
FATCA requires foreign financial institutions to tell the U.S. Internal Revenue Service about Americans’ offshore accounts worth more than $50,000. It was enacted after a Swiss banking scandal showed U.S. taxpayers hid substantial fortunes overseas. With these two deals, both signed this week, the Treasury has now finished 12 FATCA ”intergovernmental agreements” (IGAs), which help countries’ financial institutions comply with the law...Read More