Financial Crime World

ALBANIAN BANKS AND CUSTOMERS AFFECTED BY THE FATCA REGULATION

Introduction

The Foreign Accountability Tax (FATCA) Act, a US law aimed at combating tax evasion by American taxpayers, has been implemented in Albania. The Internal Revenue Service (IRS) requires non-US financial institutions to collect information on foreign income and assets held by US taxpayers outside the United States.

Impact of FATCA Regulation

As of July 1, 2014, financial institutions must identify their American customers and start reporting to the US tax authorities the identity and tax identification number of these clients, as well as the surpluses in their accounts on December 31, 2015. Additional information on income will be progressively added to the report in following years.

Implementation by Albanian Banks

Albania has not yet signed an intergovernmental agreement with the United States to facilitate the implementation of FATCA. The American Bank of Investments SHA, formerly Credit Agricole Albania JSC, has decided to implement the FATCA regulation under the status of “Foreign Financial Institution Participant in countries where there is no intergovernmental agreement”.

  • The bank has completed the registration process on the IRS portal and received the relevant identification number (GIIN): XXQY47.99999.SL.008.
  • As a Foreign Financial Institution Participant, American Bank of Investments may hold US accounts under the provisions of this regulation, but it cannot accept or have in its stock an American account subject to source tax or from Non-Participating Foreign Financial Institutions.

Impact on Business Clients

The FATCA regulation affects business clients with most of their income coming from financial assets or if more than 50% of the balance sheet consists of financial assets. These companies will be subject to a property analysis, and their beneficiaries must provide their US tax identification number.

  • The bank will collect information from its customers to allow the identification of U.S. citizens or U.S. residents for tax purposes.
  • Specific documents may be required of business clients to confirm their FATCA status.
  • Accounts for which their holders have not met the required documentation to verify the account status or are from Non-Participating Foreign Financial Institutions will not be opened.

Reporting Requirements

The fulfillment of the requirements selected by the bank requires reporting data to the IRS on an annual basis for each client identified as a US taxpayer, including customer name, address, fiscal identification number, and account balance. This process is carried out while respecting the requirements of Law no. 9887 dated 10.3.2008 “On the protection of personal data”.