Deal targets U.S. offshore tax cheats PARIS, Feb. 9 (UPI) -- Five European countries say they will help Washington identify offshore U.S. tax cheats in exchange for Washington's reciprocation. The agreement, to streamline implementation of the U.S. Foreign Account Tax Compliance Act, will "intensify" U.S., British, French, German, Italian and Spanish cooperation "in combating international tax evasion," the countries said in a statement. Washington agreed to "reciprocate in collecting and exchanging" information about U.S. accounts held by residents of those countries, the statement said. "When taxpayers overseas avoid paying what they owe, other Americans have to bear a disproportionate share of the tax burden," said Acting Assistant Secretary for Tax Policy Emily S. McMahon. We believe these efforts will serve as a complement and catalyst to the ongoing global efforts to combat offshore tax evasion. The European countries intend to adopt a "common approach" to implementing the U.S. Foreign Account Tax Compliance Act, the six-country statement said. FATCA, part of 2010's U.S. Hiring Incentives to Restore Employment jobs bill, targets foreign banks to make sure U.S. taxpayers pay the U.S. Internal Revenue Service what they owe. It requires the banks to identify hidden accounts and other assets held overseas by Americans and share the information with the IRS. Failure to comply would subject the banks to a 30 percent withholding tax on their U.S. asset income. Owners of these foreign-held assets would have to report them on U.S. income-tax returns if they are worth more than $50,000. The U.S. Treasury Department -- which wants similar information-sharing deals with other countries, including Canada, Switzerland, China and Japan -- said the law would be implemented in phases from 2013 to 2017 to give foreign banks time to develop necessary systems and ensure they don't violate local rules. European banks had raised concerns the law, as originally passed, might conflict with European privacy laws by requiring banks to enter into information-sharing agreements directly with the IRS. The banks will now share the information with their own governments, which would then share the information with Washington, the statement said. The European Commission, the European Union's executive arm, welcomed the government-to-government approach, saying it would greatly reduce "the administrative burden, compliance costs and legal difficulties." U.S. financial institutions, which also fretted about the new rules, had mixed reactions to Wednesday's announcement, The Wall Street Journal reported. Some expressed relief Washington cut the potential negative effects on them, the newspaper said. But others warned the new system could still lead some foreign banks to reduce their U.S. investments to reduce their exposure to U.S. tax penalties. European banks such as Germany's Deutsche Bank AG and Commerzbank AG, Britain's HSBC Holdings PLC and Switzerland's Credit Suisse Group AG have closed brokerage accounts for U.S. customers since last year, citing "onerous" U.S. regulations that FATCA would make more complex, the German newsweekly Der Spiegel reported. European Union Tax Commissioner Algirdas Semeta said he was confident the new information-sharing deal would help the countries address international tax evasion "in a business-friendly manner."