Statement from the SBA regarding the signing of the FATCA agreement

  • The SBA welcomes the signing of an agreement between Switzerland and the US for the facilitated implementation of FATCA. Thanks to the agreement, the complexity and costs arising from the unilateral FATCA legislation introduced by the US will be reduced for Swiss financial intermediaries.
  • In particular, no direct exchange of information will take place between the national and US authorities. Instead, the Swiss financial intermediaries will provide information relating to US clients directly to the US authorities. The negotiated model therewith makes allowances for the particularities of Switzerland and thus differentiates itself from the model applied in numerous EU countries.
  • The following elements are of particular importance:
    • Financial intermediaries in Switzerland receive, amongst other things, facilitation in the identification of clients with ties to the US.
    • US clients who refuse the transfer of their data must not be reported by name to the US, nor must the banking relationship be terminated. The US can, however, request administrative assistance from Switzerland by way of group inquiries.
    • Only banks limited to local and regional activities, that is, institutions with a client base of more than 98 percent from Switzerland and the EU are automatically considered FATCA compliant.
    The banks nevertheless continue to view FATCA critically due to the costs it incurs and the administrative burden it creates. Were they, however, to refuse to implement FATCA, they would face competitive disadvantages internationally that would jeopardise their survival.
  • The banks are now hoping for a swift ratification process to allow for a timely implementation of FATCA.