In February, the Internal Revenue Service (IRS) and US Treasury released proposed regulations for the implementation of the Foreign Account Tax Compliance Act (FATCA).

Now the legislation is a reality, all foreign (non-US) financial institutions (FFIs) who are affected are advised to start work on preparing for compliance with the Act, which may not be a straightforward task.

FATCA was enacted in an effort to prevent tax evasion by US citizens when abroad by requiring FFIs at which US citizens have accounts or investments to report the account details to the IRS.