Financial Crime World

Here is the rewritten article in markdown format:

FATCA Reporting: A Game-Changer for Barbados’ Financial Institutions

In a move aimed at boosting international cooperation in tax matters, the Government of Barbados has operationalized the Foreign Account Tax Compliance Act (FATCA) through amendments to the Income Tax Act and the Income Tax (Automatic Exchange of Information) Regulations 2015. The Barbados Revenue Authority (BRA) has been appointed as the competent authority for FATCA reporting.

New Requirements for Reporting Financial Institutions

Under the new regulations, all reporting financial institutions in Barbados are required to provide the BRA with the necessary account information on US persons for the purpose of FATCA reporting. The BRA will then forward this information to the Internal Revenue Service (IRS) in the United States.

Impact on First Citizens Bank (Barbados) Limited

For First Citizens Bank (Barbados) Limited, FATCA has introduced new requirements and implications for both the bank and its customers. Under the terms of both FATCA and local legislation, the bank is required to provide reports to the BRA on an annual basis on accounts held by:

  • US persons
  • US entities
  • Non-US entities with substantial US ownership
  • Passive non-financial foreign entities with substantial US ownership
  • Non-participating foreign financial institutions

Impact on Customers

For customers of First Citizens Bank (Barbados) Limited, FATCA has introduced new obligations. All customers are required to:

  • Declare whether or not they are a US person by signing the bank’s Customer Declaration Form
  • Notify the bank immediately of any changes that may affect their status

What is a US Person?

A US person is defined as:

  • A citizen or resident of the United States, including green card holders
  • Corporations and partnerships created under the laws of the United States
  • Estates and trusts created under the laws of the United States, or where a court in the United States would have authority to render orders or judgments concerning substantially all issues regarding administration of the trust

Identifying US Persons

The bank may use various indicators, known as “US indicia,” to determine whether a customer is a US person. These include evidence of one or more of the following:

  • US citizenship
  • A US place of birth
  • A US address
  • A US telephone number
  • Standing order instructions to transfer funds to an account maintained in the US, and other similar indicators

Consequences of Non-Compliance

Failure to declare status as a US person or provide documentation to refute the assumption of being a US person may result in the bank reporting such customers as “recalcitrant” to the BRA. This is a serious consequence that could have implications for individuals and entities involved.

Reporting Threshold Amounts

The current threshold amount for the total balance of all accounts held by a US person is USD$50,000 (or its equivalent in other currencies). For accounts operated by US entities, the threshold amount is USD$250,000. These amounts are subject to change.

FATCA Application

FATCA applies not only to personal accounts but also to:

  • Business accounts
  • Investments
  • Brokerage accounts

For more information on FATCA, please visit the IRS website at https://www.irs.gov/FATCA.