FATCA milestone reached after signing of tenth IGA with France
On 14 November 2013, French Minister of Economy and Finance Pierre Moscovici and US Ambassador to France Charles H. Rivkin signed a bilateral Intergovernmental Agreement (IGA) intended to implement the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted by the US in 2010 to combat offshore tax evasion by US persons. France, with the United Kingdom, Germany, Spain and Italy, was an original member of the “G5” countries that agreed with the United States to advance the principles of FATCA under the concept of bilateral IGAs in order to address many of the legal barriers faced by financial institutions in complying with FATCA.
The French Government has committed to drafting local laws and regulations to implement FATCA among all financial institutions resident in France (including French branches of foreign companies). Broadly speaking, the banking, life insurance and asset management industries will be most affected but certain estate (patrimonial) vehicles, holding companies as well as hedging, finance and treasury centres of non-financial groups could also be impacted depending on the nature of their activities.