Foreign Account Tax Compliance Act oblige local banks to report accounts of US clients

The US Foreign Account Tax Compliance Act (FATCA) will help the US put pressure on foreign banks to declare the accounts of their US clients abroad, said a leading Audit firm specialist. Kuwait was one of the first nations to have stepped up and have been a signatory of FATCA, Hana Shebly head of the tax department at Ernst and Young said during a lecture at the Discover America event in Kuwait.
The law, sanctioned by the Congress in mid-May 2010, obliges US citizens who live outside the United States to report their financial accounts held abroad.
Foreign banks are required to declare their US customers to the US state tax collector, the IRS, and in the event of not doing so face the penalty of having their assets frozen in each signatory nation of the agreement.