Meetings with the US Treasury and the Internal Revenue Service are some of the steps taken by the Cayman Islands Government to ensure compliance with the US Foreign Account Tax Compliance Act (FATCA).

Deputy Chief Officer for the Ministry of Finance (Financial Services), Samuel Rose, outlined Government’s approach at the 8th Annual Anti Money-Laundering / Compliance and Financial Crime Conference, held 11-12 October at the Marriott Grand Cayman Beach Resort.

Hosted by Global Compliance Solutions, the two-day conference featured 18 international and local speakers. As part of his update, Mr Rose spoke about Government’s current position on an Intergovernmental Agreement (IGA) for the implementation of FATCA.

“Government is currently evaluating the suitability of the US Treasury’s Model 1 Intergovernmental Agreement for implementing FATCA,” he said. “We are now awaiting issuance of the Model 2 Intergovernmental Agreement, and will announce our position on FATCA once we complete similar evaluations of Model 2.”

Mr Rose also noted that Government has submitted written comments on the Hiring Incentives to Restore Employment (HIRE) Act of 2010 (the legislation in which FATCA was originally enacted); hosted two US tax seminars to inform local industry and US dual citizens living in the Cayman Islands of their obligations; and established a FATCA Task Force in April 2012. Government is now soliciting feedback from the financial services industry on the implications of the Model 1 IGA which has been published.

“The Cayman Islands Government has been continuously working, both domestically and internationally, to ensure that our options for implementing FATCA (Model 1 IGA, Model 2 IGA or no Intergovernmental Agreement), are clearly understood by all stakeholders,” said Mr Rose, who also discussed potential areas of concern with FATCA’s implementation.

In addition to presenting, Mr Rose participated on a FATCA panel regarding key considerations on the eve of the effective date. Fellow panellists were Melinda Schmidt, director of the tax information reporting and withholding practice at KPMG New York; David Conen, tax director at KPMG Cayman Islands; and Jim Mastracchio, partner and co-chair of the nationwide tax controversy practice at Baker & Hostetler, Washington, D.C.

The conference was attended by more than 120 experts in anti money-laundering, compliance and financial services, as well as representatives across many Cayman Islands Government agencies such as the Cayman Islands Monetary Authority, the Tax Information Authority, the Financial Reporting Authority and the Attorney General’s Chambers.