"Washington Watch: Countdown to Compliance"AFP Exchange Magazine
Michael Chittenden was quoted regarding the Foreign Account Tax Compliance Act (FATCA), scheduled to take effect on July 1, 2014, and steps treasury departments should follow in order to comply. Speaking during an Association for Financial Professionals Treasury Advisory Group meeting in Dallas, Chittenden discussed the potential impact on companies, warning that relying on the transition relief that was recently announced could be costly. "It's a very nebulous standard; it's up to the agent to decide whether or not you complied in good faith," he said. "You probably are going to have to go to appeals and fight about it, which involves hiring lawyers. So basically, keep working, and try to comply."
Chittenden said companies should begin by reviewing their entire organizational chart for potential foreign financial institutions (FFIs) subject to the new law. "Because of the deadline for registering the FFIs, you have to start by documenting all your foreign entities," he said, adding that most companies will have compliance issues that they will need to address and could also face a 30 percent withholding liability if they fail to withhold when they should have. "So it's really important that treasury get buy-in from the very top; that the general counsel can't come in and demand you send money immediately without any documentation," he said. "You just can't do it. The treasury clerk who is wiring the money has to be empowered to say, 'No.'"
The article was republished online on May 21, 2014, as "Obey or Pay: It's Time for Treasurers to Act on FATCA."