William Byrnes & Haydon Perryman Monthly FATCA GIIN Update

The FFI GIIN List Update (Lists from June 1, 2014 through June 1, 2015)

On 1 June 2015 the IRS published its thirteenth FATCA GIIN list of “approved FFIs” (a list of the financial firms that have registered on the IRS FATCA portal).  

Total approved FFIs reached 165,461, and increase of only 2,851 during the month of May.  This FATCA registration trend since January has been described as lethargic, with April’s increase just 2,600 additional firms joining, 3,734 additional during March, and 2,479 in February.  But when compared to what was forecast by the IRS, by industry, and by the UK, it’s a troubling low figure.

In its FATCA FAQs, the IRS suggested a 500,000 potential FFI registration figure.  Many industry stakeholders suggested that 800,000 – 900,000 firms fall under the expansive definition of financial institution.

Given the broad definition of a financial institution that must register for a GIIN, the UK HMRC estimated that, even with its IGA and its accompanying local regulations, 75,000 UK entities probably are impacted.  Yet, only the UK GIIN population is only 23,256.

If the UK HMRC is correct that 75,000 entities are impacted in the UK, then extrapolated among other large and sophisticated financial service economies like Japan, China, India, and Germany, the IRS estimate of 500,000 may be low.

90 countries and dependencies have entered into a FATCA IGA with the U.S. based on Model 1A (reciprocal), or are awaiting local ratification, accounting for 100,190 of the registrations.  A further eight countries signed a Model 1B (non-reciprocal), accounting for a further 39,564 GIINs.  A final 14 countries signed a Model 2 version IGA, adding 18,458 FFI registrations covered by an IGA.  Thus in total, 158,212, representing 96% of FFI registrations, are from the 112 IGA states and their dependencies.

The 131 countries and dependencies without an IGA have only registered 6,295 FFIs to date, a surprising low number given that the initial implementation of the 30% withholding for non-compliance with FATCA began 1 July 2014.

The UK and its ten dependencies and overseas territories comprised 74,694 of the GIINs, representing 45% of the total, or without the UK included, 49,898 for 30.6%.  The 34 OECD members have produced 79,057 GIIN registrations.

Cayman remains the FFI registration global leader, with 30,868, throughout the entire FATCA registration process.  Ironic that the EU Commission just black listed it last week.

The major financial industries of the four BRIC countries have only led to 8,254 FFI registrations, which is seen as a worrying point for FATCA acceptance among non-OECD states.  BRIC registrations are now just dripping in, up from 8,186 in May, 8,060 in April and 7,962 in March.

OECD Common Reporting Standard signatories for the a multilateral competent authority agreement to automatically exchange information has reached 61.  But a notable holdout of a signatory that has not yet actually ratified the agreement is the U.S.  88 countries and dependencies are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the latest being Mauritius which signed June 23.

FATCA IGA Scenarios	GIINs	Jurisdictions
Model 1A IGA	100,190	90
Model 1B IGA	39,564	8
Model 2 IGA	18,458	14
No IGA	6,295	131
US	886	1
US Territories	68	6
Total	165,461	250

GIIN List (2014/2015) Registrations  

June                             77,354

July                              82,994

August                        95,239

September                   99,861

October                       104,344

November                   116,104

December                    122,881

January                        147,043

February                      153,797

March                          156,276

April                            160,010

May                             162,610

June                             165,461

5,809 of the total FFI registrations are members of an expanded affiliated group (EAG).

New Contact Details 

I am beginning my new faculty position with Texas A&M University School of Law in a week.  With the resources of Texas A&M Law, my research colleague Haydon Perryman (who is now with UBS Investment Bank where he is responsible for global regulatory reporting of FATCA and the CRS) and I will be able to expand our FATCA and CRS research capacity.  Any readers that want to assist in such research, please contact us at Haydon Perryman or William Byrnes.  Please download my FATCA SSRN article here.