yandraduth googoolye : foreign account tax compliance act – developments in mauritius keynote address by mr yandraduth googoolye, first deputy governor of the bank of mauritius, at the launch of the foreign account tax compliance act survey by kpmg, ebene, 5 september 2012. * * * distinguished guests, a very good morning to you all. it is a great honour to be here today to address you on the launch of the kpmg mauritius fatca survey. a few months ago, the governor had addressed a similar audience on the foreign account tax compliance act 1 ( fatca ). today, i would like to highlight some of the main developments about the fatca for us to assess the depth and magnitude of this emerging regulatory issue. although the fatca was enacted in 2010, surprisingly, there are still a few countries which are blissfully unaware that such a law as the fatca even exists and which are far from realizing the impact that this law will have on them. seeing the number gathered here today, i am happy to note that mauritius is not one of those countries and i commend kpmg for organizing such forums where we can all come together and take stock of where we are heading in this area. for a long time, there were those who were happy to brush aside the fatca. why would foreigners agree to act as inland revenue service ( irs ) agents? surely, the us would soon realise that those who hailed the facta as “ an atomic bomb to kill a fly ” were right. they would wake up to reality, repeal this “ breath - takingly arrogant law ” ( i. e. fatca ), and all would be well again. there were also those – the smaller countries – who were happy to sit back and think that the “ big guys ” would take care of the fatca. enough pressure would be exerted on the us and they would back - peddle on their us - centric law. not many would have predicted the turn of events that followed. uk, france, italy, spain and germany have seen in the fatca a new opportunity. they have agreed to the fatca - principle and are entering into agreements with the us to not only implement the fatca but to improve offshore tax compliance. the communique issued jointly by the us and the 5 european countries – the “ fatca partners ” as they are called – is revealing and i quote : “ for

used to. we need to change and adapt. we need to find new avenues, to innovate. while the financial intermediation sector grows on average by 5 per cent annually, we seem to have stagnated in terms of new products. the global competitiveness report 2012 – 13 ranks mauritius 47th in terms of “ availability of financial services ”. we lag well behind in terms of “ capacity to innovate ”, be it in our global rank or regional rank. such metrics confirm that we need to broaden the spectrum of our financial services. i hope that this seminar will address many of the queries that we have on the fatca and its compliance. i once again commend the organisers for providing the relevant stakeholders with a platform where views can be exchanged and i hope that more ideas emerge on how we can give a positive spin to the fatca. one final advice, if i may : turn challenges into opportunities! think differently! thank you for your kind attention. bis central bankers ’ speeches