(FATCA and FCP) Compliance for your Pacific Operations
The Foreign Account Tax Compliance Act (FATCA) was enacted by the US Congress in March 2010 to improve compliance with US tax laws. FATCA imposes certain due diligence and reporting obligations on foreign (non-US) financial institutions (FFIs), including those institutions operating in the Pacific.
These institutions will be required to report to the US Internal Revenue Service (IRS) information on US citizens with financial accounts.
These rules not only impact the financial services sector, but also affect many entities outside of the traditional financial services sector with operations in the Pacific.
Foreign Corrupt Practices Compliance
Bribery and corruption should not be regarded as simply a necessary evil in doing business in certain parts of the world. What is important is to ensure that you are aware of the variations in laws and enforcement between jurisdictions, so that a consistent global and or Asia Pacific anti-corruption policy can be implemented.
We can provide:
(for Foreign Corrupt Practices Compliance)
FATCA Compliance - Key Points
FATCA aims to deter tax evasion by US taxpayers who hold certain types of financial accounts outside the United States.
The obligation to collect information about your US customers’ US tax status started on 1 July 2014. There are additional obligations which progressively come into effect.
FATCA applies to all non-US financial institutions offering bank or deposit accounts, investment funds, custodial accounts and certain insurance accounts.
Key issues to consider
The US IRS provides a broad definition of a US citizen or resident for US tax purposes. This includes:
FATCA requires non-US financial institutions to identify to it which accounts are held by US citizens.
To address privacy and data protection concerns, FATCA is predominately implemented through bi-lateral intergovernmental agreements between the United States and other jurisdictions.
What do you need to do?
Foreign Corrupt Practices Compliance – Key Points
Contracting with intermediaries and agents, providing corporate hospitality, giving charitable donations, hiring employees, dealing with State-owned enterprises, commencing operations abroad, or just carrying on daily business, all raise anti-corruption risks.
Types of conduct
What do you do if you are establishing your business in a foreign jurisdiction and local law mandates a local partner must have a stake in that business? What level of due diligence is required on a proposed partner’s past conduct?
Or you find that an agreement which is inherited as part of a takeover or merger seems to involve unusually high fees?
Or your company proposes to appoint a local distributor with a licence to use your brand as well. Do you need to include provisions in distribution agreements with agents in the Pacific, which forbid certain conduct which are contrary to foreign corrupt practices type legislation in the US, the UK and Australia? What about including provisions which specifically cover local provisions on corruption?
Perhaps a locally based person has asked for a reward to expedite a regulatory approval, or asks that a family member be employed in the local business before releasing a company’s goods from a bonded warehouse?
What if a local agent proposes to arrange a private dinner meeting with the Minister while your company’s tender is being considered by that Minister’s department?
What constitutes corruption varies from country to country. Compliance with the local laws of the countries in which businesses operate is equally important as compliance with extraterritorial laws, such as Australia’s Criminal Code (Cth), the US Foreign Corrupt Practices Act and the UK Bribery Act.
Including local requirements Most Pacific jurisdictions have their own legislation and enforcement regimes, and these variations need to be taken into account, and not disregarded when adopting internal policies.
If your policy does not include local standards then you run the risk of triggering an enforcement action locally which not only carries the risk of penalties but reputational and brand damage as well.
Actions in Pacific jurisdictions can also trigger the attention of international law enforcement agencies, which means you may be left dealing with multiple enforcement actions, with the unnecessary media attention that can come with such actions.
Key issues to consider
Do you operate in multiple jurisdictions across the Pacific region? Or are you looking at expanding in the near to mid future? Do you have an anti-corruption policy which takes into account the key elements of the bribery offences in each Pacific jurisdiction?
In each of Australia, Papua New Guinea, Fiji, Solomon Islands, Vanuatu and Samoa you should consider the following issues:
The extra mile
If all of this seems complex, that’s because it is.
Pacific Legal Network has developed a service which makes compliance with:
Our experts have experience working with extraterritorial laws such as:
Regional expertiseOur Pacific based FATCA and anti-corruption expertise spans: Australia, Fiji, Papua New Guinea, Samoa, Solomon Islands and Vanuatu, and combines litigation, dispute resolution and corporate specialist skills and experience.
Our expertise includes:
Don’t know where to start?
Drop us a line or give us a call to discuss your options. We’re on hand to do as much or as little as you need, from upstream activities like front-line compliance to downstream activities like assisting when an investigation has been initiated.