The Dubai Financial Services Authority (DFSA) and the Dubai International Financial Centre (DIFC), Registrar of Companies (RoC), jointly hosted an outreach workshop last week regarding the Foreign Account Tax Compliance Act (FATCA). FATCA is extra-territorial US legislation that affects Financial Institutions (FIs), particularly those which have accountholders who are US Persons, as defined by the law.
The event was specifically targeted at senior office holders of Authorised Firms in the DIFC that are affected by FATCA. In addition to background information regarding FATCA, details regarding the DIFC's reporting processes were explained. Private consultants were present at the session to respond to pre-submitted general questions regarding FATCA.
Ian Johnston, DFSA Chief Executive, said: "The United States (US) and the United Arab Emirates (UAE) are close to signing an intergovernmental agreement that will facilitate FIs' reporting of information on their US accountholders. Certain DIFC firms will be required to report their US accountholder data to RoC, which will forward it to the UAE Ministry of Finance. The Ministry of Finance will then report the information onward to the US Internal Revenue Service. The aim of this workshop was to further outline the roles of the DFSA and the RoC and to provide the necessary information regarding the recent developments surrounding FATCA efforts."
Khalid Al Zarouni, DIFC Registrar of Companies, said: "DIFC's compliance to FATCA reiterates our overall commitment to the inter-governmental agreement that is set to be signed between the UAE Ministry of Finance and the US Treasury Department. Under the agreement, DIFC is mandated to facilitate, update and inform the community of firms based at the financial hub about the necessary reporting requirements. However, DIFC recommends all corporates and foreign financial institutions to seek external guidance for interpreting the clauses of FATCA on a case-by-case basis."
The event attracted some 200 participants who were welcomed by Michael Ridgeway, DFSA General Counsel, Khalid Al Zarouni, Registrar of Companies. They focused on the reporting process, rather than the substance of the law, and made the point that, because FATCA is a foreign law, neither the Registrar nor any other DIFC official including the DFSA is authorised or qualified to interpret or advise regarding the law. Attendees were counseled to seek advice about their specific circumstances from lawyers or other consultants who are qualified to give advice.
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