a clean and transparent jurisdiction. we have taken significant steps to enhance the effectiveness of our jurisdiction in our fight against tax avoidance and tax evasion. indeed, at its plenary meeting in paris just a week ago, fatf agreed to move trinidad and tobago from its list of countries with strategic anti - money laundering and combating the financing of terrorism ( aml / cft ) deficiencies. over the past decade, the central bank of trinidad and tobago has taken measures to enhance know your customer ( kyc ) procedures for institutions falling under its purview. we have issued guidelines on aml / cft, which comply with the standards of the fatf and which eventually formed the basis for new legislation in bringing the country closer to full compliance. in this respect, the central bank is one of three supervisory authorities responsible for preventing money laundering and terrorist financing, the other two authorities being the ttsec and the financial intelligence unit ( fiu ). trinidad and tobago is party to 17 double taxation treaties in force, and there are others awaiting ratification or under negotiation. we signed our first double taxation treaties with both norway and denmark in 1969. our double taxation treaty with the united states was signed in 1971. we also have a tax information exchange agreement ( tiea ) with the united states. this should make it relatively easier to enter into intergovernmental agreements of the model types proposed by the united states, in which foreign financial institutions report information to authorities in their residence country and have those foreign authorities report the information to the irs. we recognize that several benefits may arise from concluding a fatca - style agreement using the intergovernmental model. it eliminates u. s. withholding on payments to our financial institutions ; it identifies specific categories of our financial institutions which are deemed compliant or which present a low risk of tax evasion ; it relieves our financial bis central bankers ’ speeches institutions from terminating the account of a recalcitrant account holder ; and it imposes passthru withholding on payments to other foreign financial institutions in the fatca treaty partner or in another jurisdiction with which the u. s. has a fatca agreement. based on submissions, it appears that all of our banks are ready to respond to, and comply with, facta requirements. however, there are varying levels of preparedness within the banking sector. our three canadian and the u. s. - owned banks are at the highest level of preparedness, having been part of their parents

u. s. internal revenue service ( irs ) all clients who are u. s. citizens, green card holders living in the u. s. or abroad, or who are foreign entities in which u. s. taxpayers hold a substantial ownership interest. to properly comply with these new reporting requirements, a foreign financial institution will have to enter into a special agreement with the irs by june 30, 2013. under this agreement, a participating foreign financial institution will be obligated to : 1. obtain information to determine which account holders are u. s. persons ; bis central bankers ’ speeches 2. comply with verification and due diligence procedures on such account holders as required by the irs ; and 3. report annually to the irs on the name and address of each u. s. client, as well as the largest account balance in the year and total debit and credits of any account owned by a u. s. person or foreign entities with substantial u. s. ownership. the penalties are steep for non - compliance. a participating foreign financial institution will be required to deduct and withhold a 30 percent tax on all payments of u. s. source income ( such as interest and dividends ) as well as u. s. source capital gains made to recalcitrant account holders ( those who do not willingly and promptly provide the requested information ), and to foreign financial institutions that did not enter into an agreement with the irs. in addition, fatca requires u. s. citizens and green card holders who have financial assets outside of the united states exceeding us $ 50, 000 to report these assets to the irs. fatca focuses on the high net - worth individuals, the so - called “ fatcats ”. if a foreign financial institution refuses to comply with these requirements, a withholding tax of 30 percent will be applied on all u. s. source income of that institution, regardless of whether or not such payment was made for the benefit of the u. s. account holder, for another client, or for the institution itself. foreign financial institutions, as currently drafted, may broadly include every member of the investment community and encompass banks, credit unions, custodians, asset managers, investment funds and pension fund schemes, brokers and insurance companies ( where their products have an investment element ). ladies and gentlemen, it would be quite easy for some non - u. s. institutions to believe that they will not be affected by fatca, as