Expired deadline for submitting a FATCA statement

1 December was the deadline for meeting the obligation to submit a FATCA statement. The obligation concerns everybody (individuals as well as companies) who opened their account after 30 June 2014.

FATCA (Foreign Account Tax Compliance Act) is an American legal act passed in 2010 by the Congress. Its aim is imposing an obligation on foreign financial institutions to provide a list of clients that constitute a group of US tax residents. The main idea behind introducing the obligation is facilitating countering cross-border tax fraud and tax evasion.

What is crucial – the obligation to submit a FATCA statement concerns persons who accrued over 50 thousand dollars (or equivalent in any currency) in their accounts in a given bank. Everyone who falls under the obligation should be informed about this in advance by their bank. The statement should be submitted to every bank where a person has an account, as financial institutions have to carry out processes independently, in compliance with the current regulations.

Poland signed an agreement with the American government in 2014. Therefore, if we, as account holders, failed to submit a FATCA statement despite being obliged to do so, we need to remember about the possible consequences regarding access to our account. It may be impossible for us to withdraw money out of a cash machine and wire transfers may be held up, as well as standing orders. Negative consequences may also affect payment instalments or insurance premiums.

Polish Financial Supervision Authority introduced the following classification:

• For accounts opened in the period from 1 July 2014 to 30 November 2015 the statement has to be submitted and a bank or investment fund may require us to present documents for verification;
• For accounts opened before 30 June 2014 there is no need to submit a separate statement, as the client’s status will be verified based on the document the bank already has; if the institution has any doubts, they may request supplementary information;
• For accounts opened after 1 December 2015 applicable statements were submitted as a rule, the bank should present them for signing when signing an agreement.

A temporary freeze of the account by the financial institution due to the lack of FATCA statement will be imposed within 3 business days, of which the account holder should be immediately notified. Revoking the freeze should take place no later than within 3 business days of receiving the required statement by the financial institution.

A bank that would decide not to impose a freeze on the account of a person who failed to submit the required statement faces a penalty in the amount of over 4 million PLN. A client of a financial institution submitting a false statement faces criminal liability.