QIs will have no choice but to endure more US compliance measures or completely leave the US capital markets
November 2009

On October 27, 2009, draft legislation titled the “Foreign Account Tax Compliance Act of 2009” (FATCA) was introduced in the US Congress. The draft law follows the recent tax scandals involving UBS and other non-US banks and is intended to crack-down on tax evasion by US persons through offshore accounts and is projected to raise US$8.5 billion in US tax revenue over the next ten years. These provisions, if enacted, will directly impact financial intermediaries that are Qualified Intermediaries (QI) as well as non-Qualified Intermediaries (NQI).
The FATCA provisions impacting QIs include:

• QIs will be required to enter into another agreement with the IRS, most likely with ‘QI audit’ style verification procedures
• Procedures will need to be implemented to identify all US clients, including US persons behind companies, partnerships and trusts
• QIs will be required to either disclose extensive financial information or perform full Form 1099 reporting for US clients

Click here to read QI Solutions' analysis of FATCA, or click here to download a copy of the draft Senate bill.