Nadaleen Singh

Bankers are frus­trat­ed over the long await­ed pas­sage and im­ple­men­ta­tion of leg­is­la­tion for T&T to be­come FAT­CA (For­eign Ac­count Tax Com­pli­ance Act) com­pli­ant.

The im­pli­ca­tions of non-com­pli­ance can re­sult in T&T be­ing un­able to trade in­ter­na­tion­al­ly. It can al­so re­sult in a 30 per cent with­hold­ing tax im­ple­ment­ed on US dol­lars flow­ing in­to the bank­ing sys­tem in T&T from the US, bankers said yes­ter­day.

"You may have US cor­re­spon­dent banks who may say since you are not FAT­CA com­pli­ant, I am not go­ing to have a cor­re­spon­dent-bank­ing re­la­tion­ship with you be­cause you are not com­pli­ant with the dic­tates of the US gov­ern­ment. It could im­pact cor­re­spon­dent bank­ing re­la­tion­ships," said Daryl White, pres­i­dent of the Bank­ing As­so­ci­a­tion of T&T.

The lead­ers of Sco­tia­bank, RBC, JMMB bank and Re­pub­lic Bank Ltd yes­ter­day said they have been lob­by­ing for more than two years for the leg­is­la­tion to be put in place but have not re­ceived any re­sponse.

The FAT­CA is a US-based law which came in­to ef­fect in 2010. It was put in place to en­sure that US cit­i­zens, in­clud­ing those liv­ing out­side that coun­try, file year­ly tax re­turns. Ex­ten­sions were giv­en to be­come com­pli­ant and T&T must have every­thing in place to con­form to the law by Sep­tem­ber 30, ac­cord­ing to the bank­ing lead­ers.

Frus­trat­ed af­ter speak­ing to of­fi­cials span­ning two po­lit­i­cal ad­min­is­tra­tions, the bankers spoke at a news con­fer­ence yes­ter­day, at RBC's St Clair lo­ca­tion. The news con­fer­ence comes at a time when there are con­tin­u­ous com­plaints about the sup­ply of US cur­ren­cy, and with the coun­try ex­pe­ri­enc­ing an eco­nom­ic down­turn.

Stat­ing that T&T was at a crit­i­cal stage when it comes to be­com­ing com­pli­ant with FAT­CA, White said present­ly banks in T&T have to ad­here to con­fi­den­tial­i­ty claus­es which means they can't dis­close any client in­for­ma­tion.If FAC­TA leg­is­la­tion is in place how­ev­er, then in­for­ma­tion can be re­leased to law en­force­ment en­ti­ties re­quest­ing in­for­ma­tion.

The leg­is­la­tion has al­ready been im­ple­ment­ed in coun­tries like Ba­hamas, Bar­ba­dos, St Vin­cent and St Kitts and Nevis ac­cord­ing to White. He said the bankers re­main ready to co­op­er­ate with every­one to en­sure FAT­CA com­pli­ance.

Nigel Bap­tiste, RBL man­ag­ing di­rec­tor said the banks have re­ceived sup­port from the rel­e­vant au­thor­i­ties and that they all un­der­stand why the leg­is­la­tion is nec­es­sary but "no ac­tion has tak­en place."

"From a bank­ing per­spec­tive, if this thing is not ap­proved, if the agree­ment (the Mod­el 1A In­ter-Gov­ern­men­tal Agree­ment) is not ex­e­cut­ed and the leg­is­la­tion is not put in place, the banks will have to go to in­di­vid­u­als and ask for their ap­provals (to be com­pli­ant)."

He added that: "If the in­di­vid­ual cus­tomers do not ap­prove, we (the banks) are not go­ing to go through the has­sle of hav­ing to be with­hold­ing 30 per cent of the flows com­ing to them (the cus­tomers). We will close the re­la­tion­ships."

In oth­er words, a num­ber of peo­ple would lose their bank­ing re­la­tion­ships as well as the banks if this leg­is­la­tion is not in place, if the IGA agree­ment is not signed and the Board of In­land Rev­enue does not have a sys­tem in place to col­lect da­ta.