The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sat, 02 May 2026 11:30:00 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Impact of the FATCA Proposed Regulations on Capital Markets Transactions – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Impact of the FATCA Proposed Regulations on Capital Markets Transactions https://corpgov.law.harvard.edu/2012/03/27/impact-of-the-fatca-proposed-regulations-on-capital-markets-transactions/?utm_source=rss&utm_medium=rss&utm_campaign=impact-of-the-fatca-proposed-regulations-on-capital-markets-transactions https://corpgov.law.harvard.edu/2012/03/27/impact-of-the-fatca-proposed-regulations-on-capital-markets-transactions/#comments Tue, 27 Mar 2012 13:10:36 +0000 http://blogs.law.harvard.edu/corpgov/?p=26873?d=20150113150247EST Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Tuesday, March 27, 2012
Editor's Note:

The following post comes to us from Leslie B. Samuels, partner at Cleary Gottlieb Steen & Hamilton LLP and former Assistant Secretary for Tax Policy at the U.S. Treasury Department, and is based on a Cleary Gottlieb alert memorandum.

I. Background

On February 8, 2012, the United States Department of the Treasury and Internal Revenue Service released proposed regulations implementing sections 1471 through 1474 of the Internal Revenue Code (commonly called “FATCA”). [1] The proposed regulations would impose reporting and withholding obligations on “foreign financial institutions” (or “FFIs”) that enter into an “FFI agreement.” Under the proposed regulations, starting in 2014, FFIs that do not enter into an FFI agreement would be subject to a 30% withholding tax on U.S.- source interest, dividends, and other types of passive income (“FDAP income”). The proposed regulations defer imposition of a withholding tax on gross proceeds from the sale of property producing U.S.-source dividends and interest until 2015. [2]

A more detailed discussion of the proposed regulations is included in our February 15, 2012, Alert Memo “Treasury and the IRS Release Proposed Regulations under FATCA and a Joint Statement with Other Countries Regarding an Intergovernmental Approach to FATCA Implementation” (available here). This summary highlights certain provisions of the proposed regulations that are relevant to capital markets transactions.

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