U.S. TREASURY DEPARTMENT 

JOINT STATEMENT FROM THE UNITED STATES, FRANCE, GERMANY, ITALY, 

SPAIN AND THE UNITED KINGDOM REGARDING AN INTERGOVERNMENTAL 

APPROACH TO IMPROVING INTERNATIONAL TAX COMPLIANCE AND 

IMPLEMENTING FATCA

A. General Considerations

1. Building on their longstanding and close relationship with respect to mutual 

assistance in tax matters, the United States, France, Germany, Italy, Spain and the 

United Kingdom wish to intensify their co-operation in combating international tax 

evasion.

2. On 18 March 2010 the United States enacted provisions commonly referred to as the 

Foreign Account Tax Compliance Act (FATCA), which introduce reporting 

requirements for foreign financial institutions (FFIs) with respect to certain accounts. 

France, Germany, Italy, Spain and the United Kingdom are supportive of the 

underlying goals of FATCA. FATCA, however, has raised a number of issues, 

including that FFIs established in these countries may not be able to comply with the 

reporting, withholding and account closure requirements because of legal restrictions.

3. An intergovernmental approach to FATCA implementation would address these legal 

impediments to compliance, simplify practical implementation, and reduce FFI costs.

4. Because the policy objective of FATCA is to achieve reporting, not to collect 

withholding tax, the United States is open to adopting an intergovernmental approach 

to implement FATCA and improve international tax compliance. 

5. In this regard the United States is willing to reciprocate in collecting and exchanging 

on an automatic basis information on accounts held in US financial institutions by 

residents of France, Germany, Italy, Spain and the United Kingdom. The approach 

under discussion, therefore, would enhance compliance and facilitate enforcement to 

the benefit of all parties.
6. The United States, France, Germany, Italy, Spain and the United Kingdom are 

cognizant of the need to keep compliance costs as low as possible for financial 

institutions and other stakeholders and are committed to working together over the 

longer term towards achieving common reporting and due diligence standards.

7. In light of these considerations, the United States, France, Germany, Italy, Spain and 

the United Kingdom have agreed to explore a common approach to FATCA 

implementation through domestic reporting and reciprocal automatic exchange and 

based on existing bilateral tax treaties.

B. Possible Framework for Intergovernmental Approach

1. The United States and a partner country (FATCA partner) would enter into an 

agreement pursuant to which, subject to certain terms and conditions, the FATCA 

partner would agree to:

a. Pursue the necessary implementing legislation to require FFIs in its 

jurisdiction to collect and report to the authorities of the FATCA partner the 

required information;

b. Enable FFIs established in the FATCA partner (other than FFIs that are 

excepted pursuant to the agreement or in U.S. guidance) to apply the 

necessary diligence to identify US accounts; and

c. Transfer to the United States, on an automatic basis, the information reported 

by the FFIs.

2. In consideration of the foregoing, the United States would agree to:

a. Eliminate the obligation of each FFI established in the FATCA partner to 

enter into a separate comprehensive FFI agreement directly with the IRS, 

provided that each FFI is registered with the IRS or is excepted from 

registration pursuant to the agreement or IRS guidance;

b. Allow FFIs established in the FATCA partner to comply with their reporting 

obligations under FATCA by reporting information to the FATCA partner 

rather than reporting it directly to the IRS;

c. Eliminate U.S. withholding under FATCA on payments to FFIs established in 

the FATCA partner (i.e., by identifying all FFIs in the FATCA partner as 

participating FFIs or deemed-compliant FFIs, as appropriate);

d. Identify in the agreement specific categories of FFIs established in the 

FATCA partner that would be treated, consistent with IRS guidelines, as 

deemed compliant or presenting a low risk of tax evasion; 
e. Commit to reciprocity with respect to collecting and reporting on an 

automatic basis to the authorities of the FATCA partner information on the 

U.S. accounts of residents of the FATCA partner.

3. In addition, as a result of the agreement with the FATCA partner described above, 

FFIs established in the FATCA partner would not be required to:

a. Terminate the account of a recalcitrant account holder;

b. Impose passthru payment withholding on payments to recalcitrant account 

holders;

c. Impose passthru payment withholding on payments to other FFIs organized in 

the FATCA treaty partner or in another jurisdiction with which the United 

States has a FATCA implementation agreement.

4. The United States, France, Germany, Italy, Spain and the United Kingdom would: 

a. Commit to develop a practical and effective alternative approach to achieve 

the policy objectives of passthru payment withholding that minimizes burden. 

b. Commit to working with other FATCA partners, the OECD, and where 

appropriate the EU, on adapting FATCA in the medium term to a common 

model for automatic exchange of information, including the development of 

reporting and due diligence standards.

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