Passed in 2010 by Barack Obama, the act requires foreign financial institutions to identify and report the financial details of their American clients, whose tax duties still apply when they move either themselves or their money from the US.
All foreign financial institutions now have to disclose US-related information about new and existing clients to the US Internal Revenue Service (IRS), or will risk a 30% tax being imposed by US authorities on withholdable payments when the reporting stage comes about in March 2015.
There have been many rumblings about the implications of the controversial act, ranging from apocalyptic predictions of an Orwellian dystopia where the US watches over the rest of the world, ready to pounce on US citizens who attempt to shirk their territorial responsibilities, to celebrations of its symbolic reformation of an industry that has been begging for a “new era” of transparency since the dark days of the financial crisis.
