away from hurdles. but does this mean that our financial institutions should be transformed as revenue collectors for the us? in my opinion, the best way to tame the beast would probably be for mauritius to enter into fatca partnerships as other jurisdictions have done. you would be interested to know that in february last, five european countries – france, germany, spain, italy and the uk – signed a deal with the us. they agreed that they would each enact legislation requiring their local ffis to collect and report fatca - style information to their local tax authorities. the european jurisdictions would then transfer the information to the us. under such arrangements, the withholding on passthru payments would generally only apply to third - country non - participating ffis. the obligations under the agreement are reciprocal. however, in order to enter into such a fatca partnership, mauritius would need to amend its laws to address any conflict of laws issues that could arise. the advantage of entering into such a partnership is that mauritius would not only avoid any potential damage to its reputation, in case of non - compliance, but it may benefit from an enhanced “ clean ” image, since compliance with fatca would require more detailed information - gathering and due diligence procedures. the downside of this is that mauritius might well lose some of its us clients. however, if the tide is in favour of fatca compliance, the us clients might well realize that they have no real alternative : opting for a non - fatca - compliant jurisdiction might well be costlier as they would be hit with the 30 per cent withholding tax. at any rate, the attractiveness of the mauritian financial sector lies in the fiscal and other advantages it has to offer, and not in any banking secrecy laws. nonetheless, mauritius cannot blindly rush into adopting a fatca partnership agreement with the us. there is a host of questions that first need to be addressed. are our financial institutions ready to respond to, and comply with, fatca requirements? does the mauritius revenue authority ( which would probably be the authority designated to conduct these operations ) have the capacity – financial and otherwise – to cope with the requirements imposed by the proposed fatca partnership? in sum, are our institutions ready to rise to the challenge? this seminar will help us in our search for answers to these and related questions. let me commend grant thornton and the mauritius bankers association ( mba ) for this initiative. it will help to clear the air and point the

way forward by helping our financial institutions, which as per fatca, a passthru payment is any withholdable payment or other payment to the extent attributable to a withholdable payment bis central bankers ’ speeches would be impacted by fatca, to gain an in - depth understanding of this piece of legislation. it is in this same perspective that the bank of mauritius and the mba have recently set up a joint working group to evaluate the impact of fatca on banks in mauritius. on a concluding note, may i draw your attention to the fact that so far, the us is the only country which taxes its citizens on the basis of nationality. interestingly, outgoing president nicolas sarkozy has recently announced that should he win the presidential elections, france would also tax its citizens on the basis of nationality. so it might well be that fatca which had been accused of being “ a kind of us backward imperialism ”, might become the new reality, the new norm. one final comment, whilst i understand the difficulties that our institutions might face in complying with fatca, i have only one advice for them : complain but comply! thank you. bis central bankers ’ speeches