Finance Bill (No.2)

Memorandum submitted by James George Jatras (FB 03)

From: Jatras, James G. [mailto:James.Jatras@squiresanders.com]

Sent: 07 May 2013 23:10

To: Scrutiny

Subject: To: The Honorable Members of the Public Committee; "Senator Rand Paul Introduces Bill to Repeal FATCA! Treasury Department's Promises of U.S. 'Reciprocity' Dead" -- RepealFATCA.com, Washington, DC

To: The Honorable Members of the Public Committee

From: James George Jatras, Esq., RepealFATCA.com (Washington, DC)

Ref.: 1. Clause 219 of Finance (No.2) Bill 2012-13 (FATCA Implementation)

2. FATCA repeal legislation in the U.S. Senate, no U.S. "reciprocity"

Date: May 7, 2013 (6:10 PM, Eastern Daylight Time)

The Honorable Members of the Public Committee:

Please excuse the informality of this communication and the fact that I am writing to you collectively rather than individually. However, the matter under discussion is quite time-sensitive.

Specifically, with regard to Ref. 1 (Clause 219 of Finance (No.2) Bill 2012-13 (FATCA Implementation)), the relevant clause, currently under your consideration in the Public Committee, would grant what amounts to unlimited plenary authority to HMRC for issuance of domestic regulations in the United Kingdom for implementation of an "intergovernmental agreement" (IGA) regarding FATCA (the U.S. "Foreign Account Tax Compliance Act"). Signed on September 12, 2012, the IGA between the U.S. and the UK was the first such agreement signed, as well as the first on the basis of the "Model 1" "reciprocal" version, premised upon mutual information exchange between the signatory countries.

My immediate purpose in writing to you is to inform you that, pursuant to Ref. 2 (FATCA repeal legislation in the U.S. Senate, no U.S. "reciprocity"):

1. Legislation to repeal FATCA was introduced in the United States Senate today. A companion measure is expected to be introduced in the House of Representatives shortly.

2. Efforts are underway to block both (a) the limited U.S. bank interest reporting on UK-residents’ accounts promised under Article 2(b) of the IGA, including a lawsuit by Florida and Texas bankers; and (b) to deny the U.S. Treasury Department’s request for additional legislative authority to mandate enhanced reporting requirements by a broader range of U.S. financial institutions, as purportedly committed to by the U.S. under Article 6(1) of the IGA. In short, promises to the UK of U.S. "reciprocity" on FATCA information exchange are non-operable.

Accordingly, I suggest to you that any action by the Public Committee to grant HMRC the requested authority for domestic UK implementation of the IGA is, at best, premature. I strongly urge you to defer any action on such grant at least until the direction of events in Washington clarifies implications for the UK and for British financial institutions, British taxpayers, and British consumers.

Please find below (1) today’s bulletin from RepealFATCA.com regarding these latest developments and (2) my comment to HMRC of February 27, 2013, laying out the reasons British implementation of the IGA would be inadvisable, even before these developments.

With respect to my background and expertise on this matter, I am a former U.S. diplomat, a former long-time staffer for the U.S. Senate Republican leadership, and a current governmental and public affairs specialist in close contact with the relevant actors in Congress. Further details and my full contacts are provided in my February comment to HMRC, below.

I would be happy to answer any questions you might have and will plan to keep you appraised of relevant future developments.

May 2013