Please refer to SBP’s Letter No. BPRD/ AMLD-04/ 2013- 17241 dated November 21, 2013 on the above subject.

2.    Due to unforeseen delay in the Intergovernmental Agreement (IGA) between Pakistan and USA governments, Banks/ DFIs/ MFBs may, as a precautionary measure, complete the registration process with the IRS latest by 5 th May, 2014 as a Participating Foreign Financial Institution (PFFI) to avoid negative repercussions of non-compliance with FATCA regulations and maintain continuity of international business and trade in the public interest.

3.   Any decision to register with the IRS may be taken keeping in view the entity’s status as per the evaluation exercise conducted by Banks/ DFIs/ MFBs as FATCA Regulations may not be applicable on certain entities due to their local/ small business. Chapter 4 of the Guidelines circulated by the Pakistan Banks’ Association (PBA) may be consulted for understanding the detailed process of registration although it is not PFFI specific. Additionally, the IRS has provided useful explanations under the title of “FAQs” accessible at http://www.irs.gov/Businesses/Corporations/FATCAFAQs.

4.   With regard to the registration process, Banks/ DFIs/ MFBs are advised to observe the following points in letter and spirit:

a.	That they shall not opt as a Qualified Intermediary (QI) at this stage.
b.	That they shall not register as a Limited FFI since both the options of registering as a PFFI and Limited FFI are not available within one jurisdiction.
c.	If they decide not to register due to low or local client base or if they do not receive any US sourced withholdable payments, they shall do so on the sound basis of determination with the approval of their Board of Directors and submit the same to SBP.
d.	Foreign subsidiaries and branches of Banks/ DFIs/ MFBs shall immediately be advised about the registration process, as necessary, in order to meet the timelines.
e.	Necessary due diligence measures, including identification of pre-existing accounts of US persons and on-boarding of new customers should be undertaken as per requirements and timelines of FATCA.
f.	Consent of US persons (for both pre-existing accounts of US persons as well as accounts of new customers being on-boarded) to share their accounts’ information with US tax authorities may be re-verified by the Bank/ DFI/ MFB and all relevant documents be kept on record.

5.   The Government is in constant touch with the US authorities to enter into IGA as has been done by other countries of the world. Therefore, change in status as a result of government efforts, if any, will be shared as and when it is materialized.

6    Any queries about the PFFI registration process should be directed to PBA’s PMO at [email protected] or SBP at [email protected] & [email protected].

7.   Report of action in the matter may be submitted to the SBP latest by 10th May, 2014.

Please acknowledge receipt.