Thanksgiving was quite a feast for the US Treasury Department. On November 26, 2013, the US and Costa Rica signed a bilateral agreement to implement the Foreign Account Tax Compliance Act (FATCA) and on November 28, 2013, the US and the Cayman Islands signed a bilateral agreement to implement FATCA.
The Costa Rican agreement is based on the Model 1A treaty and requires Costa Rican financial institutions to report US account holders to the Costa Rica government which will in turn report those accounts to the US. Similarly, US financial institutions are required to report their Costa Rican account holders to the US and the US will report those accounts to Costa Rica. The Cayman Island agreement is based on the Model 1B Treaty and like the Model 1A agreement requires the Cayman Islands to gather information on Cayman Island financial institutions’ US account holders and report them the US. However, the US is not required to reciprocate the information sharing by providing information on US financial Institutions’ Cayman Island account holders.
With these agreements signed, the US has now reached a total of 12 signed FATCA bilateral agreements. While the pace is slow, the US is definitely marching ahead with the rollout of FATCA.