When the U.S. Department of the Treasury ("Treasury")
and Internal Revenue Service ("IRS") issued proposed
regulations relating to the Foreign Account Tax Compliance Act
("FATCA") earlier this year,1 there was a
sense that the financial services industry in Asia could finally
begin to untangle the knot of FATCA's obligations. However, a
review of comment letters submitted by Asian trade groups to the
IRS suggests that compliance remains a challenge without further
revision of FATCA.
Issues in Asia Generally
The comment letters came from a variety of Asian jurisdictions,
including Hong Kong, Singapore, Japan and Australia. While these
jurisdictions each face unique obstacles with FATCA compliance,
many comment letters shared a general unease with FATCA's
scope, as well as skepticism that FATCA's rewards (an estimated
US$1 billion in additional tax revenue annually) justified its
expenses.2 Generally, FATCA attempts to combat U.S. tax
evasion by requiring that
