As a result of increasing concerns by the USA over tax evasion by some of its citizens with financial accounts outside the US, we are now, like all other global financial institutions, required to conduct special efforts (enhanced due diligence) to establish the correct tax status and residency (for tax purposes) of all our clients.
One of these regulations is ‘FATCA’ or the Foreign Account Tax Compliance Act which is also known as Chapter 4 of the US Internal Revenue Code. As of October 2016, 113 countries have signed intergovernmental agreements with the IRS to comply with the FATCA regulations. The government of St Vincent & Grenadines has subsequently enacted the ‘FATCA Act 2015’ forcing Euro Pacific Bank, and all other St Vincent financial institutions, to comply with the enhanced due diligence requirements on all our accountholders.
As of November 20th, 2017 the Bank has officially moved to Puerto Rico and remains subject to similar standards, which require identification of US persons. Additionally, the Bank’s wholly owned subsidiaries in the British Virgin Islands and St. Vincent and the Grenadines, will continue filing FATCA reports with their local financial authorities as required.
In our opinion, we caution you to be aware that if you are currently conducting business with a financial institution in a jurisdiction that has not signed a FATCA IGA, or is not independently reporting to the IRS, your ability to continue conducting global financial transactions may be impaired, as compliant financial institutions begin to implement mandatory withholding on other non-compliant financial institutions.
As a result, all accountholders of Euro Pacific Bank must provide a ’self certification’ document to establish that they are not a US Person. If this self certification is not provided or if the information on the certificate is inconsistent with other information the Bank has been provided at any time, the Bank will be required to flag accounts as ‘recalcitrant’.
If an account is flagged as recalcitrant, it may be subject to a FATCA penalty withholding of 30% until such time as the accountholder provides the certificate or corrected any inconsistencies. Neither the accountholder nor Euro Pacific Bank will be able to recover any FATCA penalty withholding (including under a double tax treaty). In the most extreme case, if the accountholder has not provided a form after 120 days of the initial request or has not given the Bank an acceptable explanation of any discrepancies that are found, the account will be closed.
In order to assist you in completing the form we have put together a detailed user guide, which can be found here. Within the guide we have also developed an intuitive tool called the FATCA Assistant, which will assist you in finding answers to some of the most common questions, such as determining the correct self-certification form to complete, as well as selecting the appropriate Chapter 4 status (where relevant).
For any questions regarding completion of the self-certification forms, please feel free to calls at +1-888-527-4041, or contact our Client Services team at [email protected].