Financial Crime World

Compliance Programs for Small Financial Institutions in Saint Kitts and Nevis

=====================================

Saint Kitts and Nevis, a small island nation in the Caribbean, has implemented the Foreign Account Tax Compliance Act (FATCA) to combat tax evasion and ensure compliance with international standards. As part of this initiative, all foreign financial institutions (FFIs) operating in the country must register with the US Internal Revenue Service (IRS) and comply with FATCA regulations.

Key Requirements for FFIs

  • Register on the IRS website before reporting commences: All FFIs must register on the IRS website to obtain a Global Intermediary Identification Number (GIIN).
  • Obtain a GIIN: The GIIN is required for FFIs to report assets held by US taxpayers or foreign entities in which US taxpayers hold substantial ownership interest.
  • Identify and report assets of $50,000 or more: FFIs must identify and report assets of $50,000 or more held by US taxpayers or foreign entities in which US taxpayers hold substantial ownership interest (>10%).
  • Review pre-existing entity accounts with balances exceeding $250,000: FFIs must review pre-existing entity accounts with balances exceeding $250,000 to determine if the account holder is a US person.
  • Designate a Competent Authority to enforce compliance: The Financial Secretary of Saint Kitts and Nevis has been designated as the Competent Authority for FATCA purposes.

Competent Authority and Reporting Requirements

  • Financial Secretary as Competent Authority: The Financial Secretary of Saint Kitts and Nevis has been designated as the Competent Authority for FATCA purposes.
  • Comptroller of Inland Revenue Department: The Comptroller of Inland Revenue Department will be responsible for performing specific duties related to FATCA.
  • Reporting requirements: FFIs must report information on assets held by US taxpayers or foreign entities in which US taxpayers hold substantial ownership interest to the IRS through the Competent Authority.

FATCA Software and Training

  • Software package acquisition: The Saint Kitts and Nevis government is currently acquiring a software package to facilitate the receipt and transmission of data for FATCA purposes.
  • Training sessions: Training sessions will be conducted for relevant personnel after the implementation of the software.
  • Testing phase: A selected number of FFIs will be involved in the testing phase to understand the system before official reporting commences.

Registration and GIIN

  • Registering with the US IRS: FFIs that have registered with the US IRS will be issued a GIIN and appear on a monthly published IRS FFI list.
  • FATCA registration system: The Responsible Officer, appointed to ensure participating foreign financial institutions meet the requirements of the agreement, will be identified as the FATCA Responsible Officer in the FATCA registration system.

FAQs

For more information on FATCA compliance programs for small financial institutions in Saint Kitts and Nevis, please refer to the FAQs page.