Guernsey Finance has welcomed the announcement from the island’s government that it is seeking to negotiate a partnership agreement with the US to implement the Foreign Account Tax Compliance Act (FATCA).
The governments of Guernsey, Jersey and the Isle of Man have simultaneously announced their intention to negotiate their own individual agreements which will follow the model intergovernmental agreement published by the US Government on 26 July 2012 and will be similar in form to the agreement between the UK and the US signed on 12 September 2012.
Fiona Le Poidevin (pictured), chief executive of Guernsey Finance – the promotional agency for the island’s finance industry internationally, says: “We welcome today’s announcement that the Guernsey Government will be looking to negotiate its own partnership agreement with the US to implement FATCA and that this will be along the lines of the ‘Model I’ type agreement that the UK has signed with the US.
“The financial services industry in Guernsey has been busy getting up to speed with FATCA. This announcement will be very well received by industry because it provides certainty for the future. That said, there is still much work to be done by those firms in preparation for FATCA and we will also have to wait to see the final form of the agreement which is reached between Guernsey and the US.
“Overall though this is a very positive step. It is also encouraging to see that the three Crown Dependencies are taking a common approach, which will also be welcomed by much of the industry and especially those who have offices in two or more of the islands.”
Discussions have taken place at official level between the Crown Dependencies jointly and the US and formal negotiations will now take place with the intention of concluding intergovernmental agreements rapidly.
Once signed, they will be subject to ratification by each of the island parliaments and implementation of the agreements will be through the domestic procedures relevant to each of the three jurisdictions.
Guernsey’s Chief Minister, Deputy Peter Harwood, says: “Basing FATCA implementation on an intergovernmental agreement is preferred by industry in all three Crown Dependencies. We are pleased to confirm our joint intention to follow this approach with the US Government. This announcement today provides certainty for our business community as they also prepare for FATCA.
“Entering into this type of arrangement highlights the cooperative approach of the Crown Dependencies to international tax matters and confirms Guernsey's commitment to being a well-regulated, internationally co-operative tax transparent jurisdiction. I am particularly pleased that the three Crown Dependencies have worked together and adopted a common position on this issue.”