¿WHAT IS FATCA?

FATCA means Foreign Account Tax Compliance Act. It is an American law passed in March of 2010, which intention is to prevent that American taxpayers evade income taxes using financial accounts outside of the USA.

¿WHO IS AFFECTED BY THIS LAW?

• All the financial institutions around the world. Persons with US citizenships or residencies.
• Persons with indicia of US citizenships or residencies. FATCA identifies as possible indication any of the following:
  • Place of birth in the United States.
  • Address or telephone in the United States.
• Recurrent instructions of transfers of funds to the United States.
• A power of attorney of the account in the name of a person with address in the United States.
• Companies incorporated in the United States or under the laws of that country.

¿WHEN IS THIS LAW IN FORCE?

This law will be in force next July 1, 2014 for natural persons and starting in January 1, 2015 for corporations (legal persons).

¿ARE THERE ANY OTHER COUNTRIES THAT ARE ALREADY APPLYING THE FATCA LAW IN THEIR TERRITORIES?

Yes, actually FATCA is being complied with in more than 80 countries, among them, Canada, Spain, France, Germany, England, Mexico, Panama, Cayman Islands, including Switzerland.

¿WHAT IS THE FATCA SITUATION IN PANAMÁ?

The United States and Panama are presently in a negotiation process for an intergovernmental agreement (IGA), that will serve as basis to regulate the applicable conditions of this American law in the Panamanian territory. Not withstanding, the Panamanian financial systems is already adapting its internal processes to guaranty the compliance with this law from July 1, 2014.

¿WHAT MUST THE POPULAR GROUP DO TO COMPLY WITH THIS REGULATION?

FATCA requires that all financial enterprises assume the following responsibilities:

• Identify the clients, persons and corporations, that qualify as a U.S. person (in accordance with the definition given in the law).
• Report in the established time frame the information on deposit accounts held by clients identified as U.S. person to the competent authorities.

¿HOW CAN THIS AFFECT YOU?

Grupo Popular and its affiliates can contact you to request additional information to allow them to document your status with the FATCA law. It is possible that this involves certifying your status as an American or as a foreigner for this law. In case that any customer does not collaborate with the US authorities at the time of presenting the required information, FATCA has provided that the customer can be subject to a withholding of 30% of its funds originating from US sources, as well as the possible closing of its accounts and products.

¿HOW CAN NON-COMPLIANCE WITH FATCA IMPACT FINANCIAL INSTITUTIONS?

The financial institutions that do not collaborate with the application of FATCA faces possible sanctions of 30% of the funds received from US sources, as well as the closure of their accounts with US corresponding banks, which would make it difficult to carry out international transactions.