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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