Financial Crime World

Government Takes Steps to Enhance Financial Transparency

The Government of St. Kitts and Nevis has taken a significant step towards promoting greater financial transparency and cooperation by signing an Intergovernmental Agreement (IGA) with the United States to implement the Foreign Account Tax Compliance Act (FATCA).

Benefits of IGA

The IGA offers several benefits, including:

  • Addressing certain legal concerns for foreign financial institutions (FFIs) that may not have been possible if they were required to report information directly to the IRS
  • Paving the way for St. Kitts and Nevis to become a Model 1A country, where information will be reciprocated with the US

FATCA Requirements

Under the IGA, FFIs are required to:

  • Register with the IRS and obtain a Global Intermediary Identification Number (GIIN)
  • Report information on assets held by US taxpayers or entities in which they have a substantial ownership interest to the Competent Authority, who will then transmit that information to the IRS
  • Identify pre-existing entity accounts with balances exceeding $250,000 and review them to determine if the account holder is a US person

Implementation Status

The Government of St. Kitts and Nevis has made significant progress in implementing FATCA:

  • The IGA was signed on August 31st, 2015
  • The FATCA legislation was passed by the National Assembly on September 15th, 2015
  • A software package is being acquired to facilitate the receipt and transmission of data for FATCA purposes
  • The implementation of the software will commence shortly, with a selected number of FFIs involved in the testing phase before official reporting commences

Registration

FFIs are required to register on the IRS website before reporting commences. A list of St. Kitts and Nevis entities that have already registered can be accessed by following a link on the website.

Role of Responsible Officer

The Responsible Officer of each participating foreign financial institution (PFFI) plays a crucial role in ensuring compliance with the agreement, including:

  • Establishing policies and procedures
  • Reviewing the adequacy of the program
  • Reporting material errors
  • Preparing certifications within six months of every certification period

FAQs

A list of frequently asked questions (FAQs) is available on the website to provide additional information and guidance on FATCA implementation in St. Kitts and Nevis.