Associations & Chambers’ position on FATCA
The Trinidad and Tobago Chamber of Industry and Commerce, the Energy Chamber of Trinidad and Tobago, the Bankers Association of Trinidad and Tobago (BATT), Association of Trinidad & Tobago Insurance Companies, the Trinidad and Tobago Coalition of Services Industries, the American Chamber of Commerce of Trinidad and Tobago, Powerful Ladies of Trinidad and Tobago and Institute of Chartered Accountants of Trinidad and Tobago join as one voice to make a final plea to the Government and the Opposition to seek the country’s best interest and pass the Tax Information Exchange Agreements Bill on Thursday 23rd February, 2017.
We are appealing to the Government and the Opposition to put the politics aside and do what is required in the best interest of the country. We believe sufficient time was given to ventilating of the TIEA Bill, as such, it is time to bring this matter to a close.
We believe all options have been exhausted and both sides were given a fair opportunity to present their arguments and express their concerns, but what is clear is the devastating impact non-compliance will have on all citizens of Trinidad and Tobago. Therefore, the time has come to agree and pass the legislation so the various institutions can now focus on the various aspects of implementation, as the passage of the Bill is just the first leg in meeting our FATCA obligations.
As representatives of the wide cross section of the national community, we are very concerned about the damaging effects on our already troubled economy, if the legislation is not passed. Therefore, we will be following the debate on Thursday very closely and hoping for a resolution to this matter.
The Bankers Association of Trinidad and Tobago (BATT) is again urging the Opposition to support the passage of the Tax Information Exchange Act (TIEA) when Parliament meets on Thursday 23rd February, 2017.
BATT wishes to clarify some of the matters raised in the last debate and to enlighten the public over concerns which have been expressed.
The Tax Information Exchange Agreement Bill (TIEA) is the enabling legislation that operationalizes the Inter-Governmental Agreement (IGA) signed between Trinidad and Tobago and the United States in August 2016 and which applies to the reporting of account information on U.S Persons only.
The TIEA is not drafted for the purpose of, and indeed DOES NOT allow:
- Any member of the Government or any other government department, except the Board of Inland Revenue (BIR), to obtain financial information on citizens of Trinidad and Tobago from any financial institution.
- The information obtained on U.S persons by the Board of Inland Revenue(BIR) to be used in any other manner apart from disclosure to IRS in fulfilment of the Country’s obligation under FATCA.
- Financial institutions to provide information on foreign accounts in the U.S to the BIR
- Reporting on T&T citizens who are not US Persons with accounts denominated in US dollars.
U.S persons as defined in the TIEA and the IGA are already obligated under U.S tax law to comply with the requirement to report their worldwide income to the IRS and therefore the FATCA legislation imposes no new obligation on them.
The vast majority of the banking population in Trinidad and Tobago constitutes T&T citizens, who are not subjected to the FATCA reporting requirements, but who will be inadvertently and adversely affected if the TIEA legislation is not passed.
Let us learn from our Caribbean counterparts, who are experiencing the crippling effects from the loss of correspondent banking relationships with US banks. Let us not repeat those mistake and put Trinidad and Tobago first and pass the TIEA.
Loss of correspondent banking relations in the Caribbean and its impact.
The Bankers Association of Trinidad and Tobago (BATT) has compiled several articles to highlight the real life stories of other Caribbean countries that are experiencing negative impacts as a result of the loss of correspondent banking relations with international countries.
Over the last two years, several banks across the Caribbean region have been losing their correspondent banking relationships with international banks, particularly in the United States. Among the reasons cited for this is non-compliance of FATCA. The severing of these correspondent banking relationships, also termed “de-banking”, is having a tremendous impact not only on the banking sector, but the country and the economy they operate in.
In countries like Jamaica, there has been a serious decline in foreign exchange trade and remittances. For Guyana, the Cayman Islands, Bahamas and Barbados, both local and international businesses have slowed down, which is also impacting negatively on their financial sectors. The loss of correspondent banking relationships is having a crippling effect on Belize’s economy, where the citizens of that country are challenged in purchasing goods and services from the United States. Belize is struggling to regain its banking relations with U.S banks despite several attempts by the Belizean Prime Minister, who personally has visited U.S banks and the U.S Government, to no avail.
Below are a list of articles relating to the matter of de-banking within the region:
“De-risking” severely impacting Caribbean banks: Barbados Central Bank
Tuesday, April 05 2016
Contributed by: Aleem Khan
Prime Minister, Dean Barrow Travels to Washington To Discuss Issues with Belize
For some months the banking sector in Belize has been facing a difficult process where big US banks are cutting off their correspondent banking relationship with Belizean banks.
Read more: http://www.ctv3belizenews.com/index.php?option=com_content&view=article&id=6918:prime-minister-dean-barrow-travels-to-washington-to-discuss-banking-issues-in-belize
Barrow and Biden chat about Belize’s correspondent banking debacle January 2016.
De-Risking and its Impact: The Caribbean Perspective
Prepared by the CARICOM Central Bank Governors Technical Working Group on De-Risking (Coordinator: Dr. Allan Wright, Central Bank of Barbados)
The international business companies (IBCs) 7 WP/01/2016 have experienced the most significant impact within the Eastern Caribbean, as correspondent banks have closed entire business lines and terminated or placed onerous restrictions on accounts of former prime rated customers. The loss of businesses has been estimated in some instances in excess of several million US dollars
Read more: http://www.ccmf-uwi.org/files/publications/working_papers/2016TWGDR.pdf
The IMF gauging effects of lost correspondent banking relationships
K Quincy Parker
Guardian Business Editor
Published July 1, 2016
The “De-Banking” Element
October 20th, 2016