America owns up to lack of reciprocity over FATCA

Chris Hamblin

10 May 2016

Stoking the fires of an already poisonous controversy that has seen his country vilified as imperialistic and hypocritical the world over, Mr Lew made his damaging admission in an open letter to the speaker of the US House of Representatives. Many countries have already begun sending data about American account-holders to the Internal Revenue Service in the US, with the British Virgin Islands being among the first to do so on 30 June, using the BVI Financial Account Reporting System . FATCA is an abbreviation for the Foreign Accounts Tax Compliance Act 2010.

Lew went on in his letter to explain why the US was not reciprocating, even though it had promised to do so in dozens of 'inter-governmental agreements': "This is because legislation is needed to require US financial institutions to provide this additional level of detail."

This is an admission that the Obama administration has been signing IGAs with the finance ministries of other countries - 82 signed or in force, many more agreed 'in substance' - in the full knowledge that it cannot meet its commitments.