FATCA Update: A Semi-Stay of Execution for Americans Assets and the US DollarJeff Berwick This is good news in many ways for both those with assets that they wish to internationalize as well as for the dollar and US banking system itself but in many ways the damage has already been done. FATCA, signed into law in 2010, ensures that, if you dont tell the US government where your assets are and how much is there, your bank will no matter where that bank exists. FATCA has been acknowledged as the death of the dollar by many experts including our own FATCA expert, Jim Karger, who recently stated such at our recent TDV Wealth Management Crisis Conference in both Panama and Mexico. Many foreign banks simply wont comply. The cost and risk of complying outweighs the benefit of accepting American clients. By requiring banks all over the world to become unpaid employees of the IRS and keep tabs on American citizens FATCA is perhaps the most egregious, overarching and draconian law put into effect by the US government crime organization to date. But there has been some temporary reprieve for those who will be affected by the law. The recent IRS guidelines regarding FATCA give many of the companies and financial institutions implementing FATCA another 18 months to be in compliance. Of course, as with all government laws it will be selectively enforced. Any banks not appearing to be doing their best to comply will likely find themselves in contention with the IRS. At any rate, what this effectively means is that if Uncle Sam doesnt like you or wants your money he might come after you. Nothing new here A recent Thomson Reuters survey of 500 European and US tax professionals showed 74% believed there to be a lack of clarity in the IRS regulations for FATCA. This would impede compliance, they predicted. The notice from the IRS states: CAUSING CHAOS WORLDWIDE FOR AMERICANS FATCA has already affected many Americans with accounts abroad. They have seen their accounts closed at a moments notice, have been unable to open accounts and perhaps even worse hardly anyone even knows how to deal with the FATCA regulations even if they did want to deal with it. I have just returned from the Cayman Islands where lawyers and accountants are running scared. They are slowly figuring out what FATCA means to their American clients, many of whom have a large amount of assets in the Cayman Islands that they do not want to repatriate to the US or be reported to the IRS. And, even if they wanted to adhere to all the rules under FATCA it is nearly impossible to understand and fraught with risk. The lawyers in the Cayman Islands told me that company incorporation in the Cayman Islands is rock solid in terms of privacy and ease of setup (we will have more on that to subscribers soon) but the problem is banking in the Cayman Island. They told me that if an American is even involved, in any way, with a company that has a bank account in the Cayman Islands they will report all information on that account to the IRS. I informed them of a few things. First, any American with substantial assets should be running, not walking, to get a second passport to protect against all of the capital controls coming out against Americans. We have heard of some companies that have stopped working with Americans at all just because of the problems it causes them with their bank accounts. Secondly, there are ways for Americans to have international structures and banking without falling under the FATCA legislation. We enlightened dozens of people recently at our Crisis Conference on how to do this. You can find out more by contacting TDV Wealth Management. CONCLUSION As you can see, the law will still go into effectand January 1, 2016 is right around the corner. The IRS fines for FATCA non-compliance could result in fines or jailtime on individuals who fail to report. Already this coming July 1, 2014, foreign financial institutions risk being fined. The next 18 months are merely a reprieve. Already foreigners are moving away from the dollar. The facade of the US government has fallen and the entire world recognizes that the US and the dollar is about to collapse because it cannot pay off its debts and printing money is the only way the game can continue on much longer. Countless movements are ongoing in Russia, China, the Middle East and more all moving away from the dollar and the US banking system and this is exacerbated by FATCA. If you were caught on your heels in the lead up to July 1, 2014, then dont be in the lead up to the next FATCA deadline. The folks at TDV Wealth Management are ready to help you today with any questions you might have. 