DLA Piper Teams Up with DIFC and the US-UAE Business Council to Shed Light on New 'FATCA' LawPress Release19 Jun 2013 09:02 am
DLA Piper, the global law firm, this week co-hosted a seminar on the United States Foreign Account Tax Compliance Act (FATCA), which comes into effect at the end of this year. Experts from the firm's Middle East and US offices, alongside speakers from DIFC and the US-UAE Business Council, explored the scope and implications of the new law for businesses with operations in the UAE.
FATCA requires financial institutions to use enhanced due diligence procedures to identify US persons who have invested in either non-US financial accounts or non-US entities. The intent behind FATCA is to keep US persons from hiding income and assets overseas.
Speakers outlined the practical steps that businesses need to take immediately, to ensure that they are compliant within the timeframe, less than six months away. Experts also shed light on the potential consequences for businesses that fail to comply. Other topics discussed included how FATCA applies to UAE financial institutions, why automation is necessary and finally, what the UAE government's response to FATCA has been so far.
"FATCA will have a huge impact on businesses in the UAE, whether they are part US owned or simply do business in the US, FATCA rules must be followed," commented Peter Somekh, Dubai Office Managing Partner at DLA Piper Middle East. "Severe consequences will be faced by those who fail to comply in time and we are working closely with clients across the region to iron out any potential hurdles, well ahead of the deadline."
"Conducting international business responsibly by complying with appropriate laws and regulations is vital to maintaining the critically important economic and trade relationship between the U.S. and the U.A.E.”, added Danny Sebright, President of the U.S.-U.A.E. Business Council. “American and Emirati companies operating in the US as well as their employees with financial assets abroad must be well informed about new regulations like FATCA and the impact these regulations have on how they report their earnings.”
Roberta Calarese, Chief Legal Officer at DIFC Authority, commented: “The UAE has always been mindful of its commitment to the financial community, locally and internationally, with regards to both security and transparency. Implementation of FATCA will help to level the playing field to make the DIFC and the UAE a more competitive and open market for financial services. At DIFC, we continue to enhance strategic global relationships and promote transparency through the world-class legal and regulatory infrastructure we have established over the last decade.”
Delegates were given the opportunity to take part in a Q&A session, which stimulated lively debate from the floor exploring the legal and technological scope of the new law and how it will affect different industry sectors in the region. FATCA is a portion of the 2010 Hiring Incentives to Restore Employment (HIRE) Act of the USA that requires individuals to report their financial accounts held overseas and foreign financial institutions to report to the Internal Revenue Service (IRS) about their American clients.
DLA Piper has a strong presence across the Middle East region, with offices in all six GCC countries as well as a group firm in Egypt and an Iraq desk, and is the only international law firm in the Middle East region with an Arab national at the helm.