This paper aims to carry out an analysis of the possible opportunities as well as difficulties that may arise when surveyed developing Countries (Brazil, Colombia, South Africa, and Uruguay) are engaged in the implementation of FATCA. The various possible incarnations of FATCA, from the so-called «classic FATCA» to various instances of inter-governmental agreements have been taken into consideration within the broader perspective of assessing FATCA as a regulatory model with an impact also on the domestic dimension of the way systems handle transparency. The approach of this paper combines good governance and fiscal transparency based on the argument that global fiscal transparency supplements the establishment of good tax governance, insofar as it allows each country to effectively exercise its sovereignty on cross-border situations falling within the boundaries of its jurisdiction.
In the perspective of FATCA the dimension of “extractive transparency” appears to be very sensitive, especially with the regard to the implementation of information gathering measures based on know-your-client rules by financial institutions which eventually effectively become vis-à-vis the taxpayer tax intermediaries in charge of processing and gathering some key items of the latter’s financial information. Given that, as it will be further analysed, the key issue of FATCA possibly arises from the fact that alien procedural requirements are inserted in the texture of a domestic system.
This paper is composed of an introductory section describing the current state of the art in relation to FATCA in the United States in both its «classic» and «inter-governmental»-based dimension. The latter section of the paper follows the structure of the questionnaires used for the original fieldwork research. In particular, the second section of the paper is articulated in four sections concentrating, respectively on:
- The scenarios deriving from the implementation of «classic FATCA»;
- The scenarios deriving from the conclusion of an inter-governmental agreement;
- The potential drivers for cases of non-compliance together with the possible consequences deriving therefrom;
- The merits of FATCA as a policy option in the light of other relevant policy perspectives, with particular regard to traditional items of the tax treaty policy debate (bilateral Vs. multilateral approaches) as well as with regard to its interaction with a broader regulation agenda tied to the evolution of the international financial architecture.