FATCA Bill Being Debated In The National Assembly LK Hewlett Story Updated: September 15th 2015 at 4:10 pm
Parliamentarians are presently in the National Assembly debating the FATCA bill introduced this morning (Sept 15) by Prime Minister and Minister of Finance Dr. Timothy Harris. St. Kitts and Nevis on Aug 31 joined a long list of countries who have signed intergovernmental agreements with the US government to implement the latter’s Foreign Account Tax Compliance Act (FATCA) in their respective territories. Local financial institutions have to begin reporting information relating to accounts held by US citizens to the US Treasury by September 30 th . Opposition MPs have raised several concerns about the implications of the legislation in relation to residents’ confidential financial information, safeguarding of private information, the potential loss of foreign investment revenue, capital flight in the financial services sector, and the financial strain on local financial institutions to upgrade their personnel and IT systems. “We know that these are real possibilities as a result of the implementation of this piece of legislation,” said NRP MP Patrice Nisbett. “[The bill] has far reaching implications. It erodes privacy rights and confidentiality relations with institutions we do business with.” He said St. Kitts and Nevis is being asked to implement and enforce tax policies for the United States. He questioned whether the enforcement of the US tax ‘law’ is meant to combat threats to global security or if it is simply the US attempting to reach millions of dollars located outside the domestic tax collecting agency’s reach. “The US government is effectively asking us to become arms of the Internal Revenue Service. We in St. Kitts and Nevis are now burdened and pressured to go and get the requisite information for the IRS.” Nisbett however, acknowledged that the extraterritorial application of the US domestic law into the Federation’s law “is something we have to proceed with”. While the Opposition challenges the bill as an “intrusion” into ordinary persons’ private financial account, federal Cabinet Minister Hon. Mark Brantley, countered that it does not apply to the ordinary Kittitians and Nevisians. ” FATCA does not apply to all of us…It is categorically untrue that it applies to everyone…This applies to US tax payers; people who are deemed to be subject to US taxation. “…This bill does not seek to target our people; it seeks to target US tax payers. They must hold US citizenship or green card or lawful residence in the United States…It is an attempt by the US to reach US taxpayers wherever they are found; if they live in St. Kitts and Nevis it applies to them,” he said, noting that the reporting minimum balance on qualifying accounts is US$50,000. Brantley accused the opposition of engaging in fear mongering by suggesting to the public that everyone’s accounts will be subject to scrutiny. He too pointed out the added cost banks would incur in order to be compliant, but said they could either incur those costs, stop doing business with US citizens, be deemed no-compliant, or lose their international banking relations. Another point he highlighted is the fact that other countries in the region, and indeed the world over have signed FATCA agreements and are already complying with FATCA obligations. So far 80 countries worldwide have passed FATCA legislation into law. “We are now in a new world order…What is St. Kitts and Nevis to do? …We will be mature and be reliable partners to the international community. “This government has taken a path that will yield dividends as it demonstrates it is a reliable international partner…We have to understand the rest of the world is moving in that direction and we can’t afford for our jurisdiction to be the odd one out and our banks pay the consequences.” Brantley also addressed the opposition’s claims that FATCA legislation would negatively impact the Federation’s Citizenship By Investment program. He said it is posited that some US citizens will abandon their national allegiance and the CBI offers them citizenship solutions. The Minister charged that despite the opposing MPs’ objections to the legislation, “Labor would have done the same thing” if the party were still in power. The bill is expected to have all three readings and passed following the debate.