Dubai: The US and UAE governments are in the process of signing the FATCA Intergovernmental Agreement (IGA). Under this agreement, banks and financial institutions in the UAE will be required to annually compile data for submission to the UAE regulatory authorities. The UAE Ministry of Finance would then send this data to the US Internal Revenue Service.
Bankers say all banks in the UAE will be forced to comply as they must rely on US correspondent banks to clear dollar denominated transactions. Non-compliance could invite sanctions that could include withdrawal of US dollar clearing rights with correspondent banks.
The reporting mandates are scheduled in stages, with applications to join the IRS programme commencing January 1, 2013; participating banks will be required to document all new accounts by June 30, 2013; search for existing accounts is to be completed by June 30, 2014, and the first reporting date for accounts will be September 30, 2014.
