Sudanese banks to implement US law on reporting American citizens holdings

April 1, 2014 (KHARTOUM) – The Central Bank of Sudan (CBoS) has directed all commercial banks in the country to implement provisions of the of the U.S. Foreign Account Tax Compliance Act (FATCA) by July 1st .

FACTA is a US law designed to crack down on offshore tax evasion by American citizens through requiring most foreign banks and investment funds to report to the U.S. Internal Revenue Service (IRS) information about U.S. customers’ accounts worth $50,000 or more.

Even though FACTA was signed into law since 2010, it will only go into effect this upcoming July. The United States is one of the few nations that levies taxes on its citizens’ income earned abroad.

At a workshop held in Khartoum this week on FACTA, the Lebanese banking expert Antoine Dagher said that this law will be used to calculate taxes on US citizens in their country of residence.

Banks not adhering to FACTA could face stiff penalties including a withholding of up to 30% on their US-invested money, he said.

Both the managing director of the Sudanese French Bank Mahjoub Shubbu and former CBoS governor Saber Mohamed al-Hassan warned that non-compliance could place local banks under global pressure that would threaten its international dealings.

The US signed bilateral agreement with a number of countries on the implementation of FACTA. Sudan is not one of those nations and it is not clear if CBoS will relay information to the IRS on the US citizens’ accounts or whether the individual banks would do so.

Sudan is subject to comprehensive economic sanctions since 1997 over terrorism charges as well as human right abuses. Further sanctions, particularly on weapons, have been imposed since the 2003 outbreak of violence in the western Darfur region.

(ST)