by Linda Straker
Grenada’s House of Representatives on Tuesday gave the approval to make into law, the agreement to facilitate the implementation of the Foreign Account Tax Compliance Act Inter-Governmental Agreement (FATCA) with the United States of America.
FATCA, as it’s more commonly known, provides for information regarding all persons from the USA holding accounts at local financial institutions including credit unions and insurance companies with an account holding more than EC$50,000, to be shared with the USA’s Internal Revenue Service (IRS).
According to the explanatory notes in the legislation, FATCA is part of the Hiring Incentives to Restore Employment (HIRE) Act enacted in the United States of America.
Outlining severe penalties for persons who fail to comply, sharing inaccurate information or breaching the confidentiality clause, the law received the approval of the Parliamentarians during Tuesday’s sitting of the House. The Upper House of Parliament or the Senate is expected to approve the legislation at its April Sitting.
The legislation provides for the Competent Authority to be Comptroller of Inland Revenue. The Competent Authority will be the person with whom the IRS of the United States federal government representative shall have direct communications, when it comes to seeking information.
As the Competent Authority, the Comptroller will mandate his/her staff to gather information from financial institutions. “Failure to comply with such a request is a summary offence punishable by a fine not exceeding $100,000.00,” states the legislation which is entitled: United States of America — Grenada Foreign Account Tax Compliance Act, 2017.
Once it goes through all stages of Parliament, the law will apply retroactively covering the years 2014, 2015 and 2016. A financial institution will have to provide lawful excuse for refusing or failing to provide the requested information.
Where a financial institution provides inaccurate information in response to such a request for information, this constitutes a summary offence punishable by a fixed penalty of $50,000, or a fine not exceeding $300,000.00 upon conviction.
With regard to protecting account holders’ information, the legislation says that the Competent Authority and any person appointed, employed or designated to carry out articles of or having any official duty under the Agreement, shall regard and deal with as secret.
“The obligation to secrecy imposed by this section continues to apply to a person whether or not he or she ceases to be appointed, employed or designated to carry out articles of the Agreement or provisions of this Act or ceases to have any official duty under the Agreement,” said the legislation which also explains that no person shall be compelled to produce in Court or to divulge or communicate any information that comes to his or her knowledge in the performance of his or her official duties, employment or designation with respect to the Agreement.
“A person who discloses or divulges any information or produces any document in contravention of this section commits an offence and is liable on summary conviction to a fine of not exceeding EC$5000 or to imprisonment for a term not exceeding one year,” the legislation states.