On Nov. 14, 2013, the U.S. and France jointly announced that they’ve signed an intergovernmental agreement (IGA) to begin implementation of the Foreign Account Tax Compliance Act (FATCA).
The agreement, signed by U.S. ambassador to France Charles H. Rivkin and French finance minister Pierre Moscovici, is a Model 1 reciprocal version. This designation indicates that financial institutions in each county will report information to their own respective governments; then the governments will exchange that information annually.
The agreement was supposed to be signed as early as Oct. 11, 2013, but the signing was delayed as a result of the U.S. government shutdown fiasco. It will actually take effect when both counties have notified one another that the necessary internal procedures for enforcement have been completed.
This is the 10th IGA signed to date, the others are with Denmark, France, Germany, Ireland, Japan (Model 2), Mexico, Norway, Spain, Switzerland (Model 2) and the U.K. Treasury deputy assistant secretary (international tax affairs) Robert Stack notes that the agreement, “Demonstrates the growing global momentum behind FATCA and strong support from the world’s most important economies.” This message is contradictory to the general feeling among financial industry practitioners, who feel that the glacial progress in finalizing IGAs is hindering meaningful implementation.
As of Nov. 14, 2013, the Treasury claims that it’s reached 16 further agreements in substance that are awaiting signature.