Piyush Gupta, the head of Southeast Asia’s biggest bank, said the U.S. may be acting selectively in relaxing a reporting rule for foreign lenders that seeks to prevent tax evasion by Americans.
“We have to go through the details and if it turns out that they’ve done something for the Europeans and not for the rest of the world, we will have to make more noise and fight harder,” Gupta, chief executive officer of DBS Group Holdings Ltd. (DBS), told reporters in Singapore today.
The U.S. is working on a framework to allow financial institutions in France, Germany, Italy, Spain and the U.K. to report information about Americans under the Foreign Account Tax Compliance Act to their own governments rather than to the Internal Revenue Service, the Treasury Department said on Feb. 8. Asia-Pacific banks face challenges implementing FATCA because of their diverse jurisdictions, according to Ernst & Young.
“Some countries in the region have data confidentiality and privacy laws that restrict financial institutions from releasing customers’ information to third parties unless proper consent has been obtained,” the consulting firm said in a statement yesterday.
FATCA is not the only U.S. rule attracting concern from Singapore banks. The island-state’s lenders wrote a letter to U.S. authorities this week saying the so-called Volcker rule restricting proprietary trading would impinge on their business outside of the U.S. and undermine the role of Singapore’s financial regulator.
Gupta said some of U.S. rules are “unintended consequences” of other efforts, and that American authorities are open to fixing them.
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