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Bangladesh Bank suggests FATCA reporting by local banks

Bangladesh Bank has advised local banks in Bangladesh who have accounts of US taxpayers to report to the Internal Revenue Service (IRS) of USA. Through BRPD Circular Letter No-01, issued on 16 January 2014, Bangladesh Bank advised to do so pursuant to the Foreign Account Tax Compliance Act (FATCA) of the United States.

The circular highlights the fact that Government of Bangladesh has not yet decided to execute an inter-governmental agreement with the US. However local banks should register and sign Participation Agreements with the IRS and report under the FATCA. National Board of Revenue (NBR) has also consented in this regard.

Since this kind of reporting will violate relevant Bangladeshi laws including the Bankers’ Books Evidence Act 1891, Bangladesh Bank advised local banks to obtain written consents from their customers before reporting the requested information to IRS.

The Foreign Account Tax Compliance Act (FATCA) is a United States federal law requiring US citizens (including those living outside the U.S.) to have yearly reported themselves and their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FINCEN), and requires all non-US (Foreign) Financial Institutions (FFI’s) to search their records for suspected US persons for reporting their assets and identities to the US Treasury.