FATCA has pretty much beaten the entire Global Financial System

quote:

---

“If FATCA were a Greek God, it would be Zeus, ruler of heaven and earth, throwing lightning bolts at the ground and causing it to shake with such fury as a Magnitude 10 earthquake.”

What is most amazing about this law is not the impact that it has on Americans – although that is considerable – but its impact on the world.

Never before has a U.S. tax law attempted such an astonishing reach. And for those naysayers who predicted the demise of FATCA before it was even out of the womb, shrewd diplomacy by President Obama and his Treasury Department have proven them wrong.

What is all of the buzz about FATCA? What can it accomplish that tax treaties and other government-information gathering tools can’t? FATCA requires foreign banks to reveal the names and accountholder information of Americans with accounts over $50,000. Because non-compliant institutions could be saddled with onerous penalties and isolated from U.S. markets, financial institutions have become as submissive in their willingness to comply with FATCA as a Labrador Retriever who rolls on its back after being given a treat. Very simply, virtually every financial institution is complying.

2. Countries Around the World are Complying. More than 80 nations – including all of the industrialized nations in the world and thus, those that matter the most – have agreed to the law. So far, over 77,000 financial institutions have also signed on. Countries must fully support the law or face serious repercussions. Even tax havens have joined up. The IRS website features a searchable list of financial institutions. Countries on board can be found at FATCA – Archive.

3. Even Our Arch Nemeses Russia and China Have Agreed to FATCA. If you think money anywhere can escape the IRS, you are sadly mistaken. Even notoriously antagonistic countries like China and Russia have signed on. Which one is more amazing? In light of recent events and the chilling diplomacy that exists between the countries, probably Russia. The U.S. and Russia were negotiating a FATCA deal until March, 2014, but Russia’s annexation of Crimea caused the house to come tumbling down and for the U.S. to suspend talks.

This meant Russian financial institutions were all but guaranteed to be isolated from U.S. markets. Unwilling to sit back and allow this to happen on his watch, President Vladimir Putin signed a law in the eleventh hour allowing Russian banks to send American taxpayer information to the U.S., thus satisfying the U.S. Treasury.

4. FATCA is America’s Big Stick. There is a famous proverb that says, “Speak softly and carry a big stick.” It means do not boast or use verbal threats but do make others aware that you are prepared to use physical force if necessary. It was used by President Theodore Roosevelt as an expression of his view of foreign policy. Today, FATCA is America’s big stick.

Indeed, FATCA’s onerous 30% withholding tax and exclusion from U.S. markets sends a strong message to those who may be tempted not to comply. Very simply, the combination of these two penalties packs a powerful “one-two” punch that would be nothing short of catastrophic for a foreign financial institution with U.S. clients. Specifically, foreign financial institutions must withhold a 30% tax if the recipient doesn’t provide information about U.S. account holders. The choice is clear, and it’s no small wonder why everyone is complying.

---