The Ministry of Financial Services hopes to publish its legislative response to the US Foreign Accounts Tax Compliance Act (FATCA) in January next year, with industry guidelines following soon after in March, according to Cassandra Nottage, bank supervision manager at The Central Bank of The Bahamas.

Nottage was speaking at The Bahamas Institute of Chartered Accountants (BICA)’s Accountants Week yesterday.

Under FATCA, foreign financial institutions (FFIs) will be forced to disclose information on their US accounts to the US Treasury. Earlier this year, Minister of Financial Services Ryan Pinder announced that the government would adopt a Model 1 Intergovernmental Agreement (IGA) with the US Treasury in order to carry out its reporting duties.

According to Nottage, the government is currently deliberating the costs associated with the Model 1 agreement, including those related to implementing an electronic reporting system and providing the necessary training for users.

The Central Bank official warned that FATCA was a complex piece of legislation and accountants should be thorough in performing the necessary due diligence when dealing with clients.

“There are so many shades of grey to be considered,” she told attendees. “It is not straightforward. It is not just knowing somebody is a US citizen–you have to check whether their beneficiaries have US status.

“There is not much room for deviation,” she continued. “Firms need to know their obligations.”

Although much remains to be done before The Bahamas is FATCA compliant, Nottage stressed that the country was making progress and benefitting from a strong compliance enviroment saying: “The Bahamas is ahead of the curve. The future is bright.”

Accountants’ Week runs November 11-14 and features such speakers as Minister of State for Finance Michael Halkitis, Financial Secretary in the Ministry of Finance John Rolle and chief executive officer of the Bahamas Financial Services Board Aliya Allen.

cmorris@dupuch.com