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St. Maarten News: The Democratic Party faction in parliament has requested the Finance Committee of Parliament to examine and discuss the execution of the FATCA by the local banks on St. Maarten.

To this end, the DP has proposed that the Bankers Association be invited to apprise parliament of their experiences with this Foreign Account Tax Compliance Act (FATCA), which is a United States law that introduces a “reporting regime for financial institutions with respect to certain accounts”.

Under this law, Foreign Financial Institutions (FFIs), such as banks are required to report about certain foreign financial accounts and offshore assets of US taxpayers. 

Another way to ensure compliance with the FATCA in foreign jurisdictions, has been with the so-called Intergovernmental Agreements.

“If a jurisdiction enters into an Intergovernmental Agreement (IGA) to implement FATCA, the reporting and other compliance burdens on the financial institutions in the jurisdiction may be simplified. Such financial institutions will not be subject to withholding under FATCA.”

“The Kingdom Government, on behalf of Curac¸ao and the US signed such an agreement. The former Minister of Finance of St. Maarten opted not to enter into an IGA, due to the supposed pressure it puts on the foreign government, in this case St. Maarten,” the DP said in a press statement. “The banking sectors on St. Maarten and Curacao are closely affiliated and it would be interesting to learn how this situation plays out in practice and the experiences of our local banks in complying with the Foreign Account Tax Compliance Act.”

Another potential catastrophe for the banking industry region-wide is the so-called “de-risking” by US and European banks. Some in the regional banking world have described this threat as the “Armageddon”. CARICOM is engaging an all-out lobbying effort and St. Maarten must keep its ears to the ground and where possible join these efforts to protect the regional and local banking industry.

“It is in areas such as these that the Kingdom/Dutch government should come to the assistance of its Caribbean partners and our local Government should start its own lobbying thrust to this end soonest,” the DP stated.