Why is this Topic Important to Wealth Managers? Presents discussion relating to Foreign Bank and Financial Account disclosures. For those wealth managers with international clients it is most important to stay ahead on updates relating to international tax and compliance. Thus we have presented a discussion summarizing the new rule position with regards to international financial reporting.
As we have discussed in the past here at AdvisorFYI, there is no specific Federal law that prohibits an individual from owning any interest in a financial account in foreign jurisdictions. “However, because offshore financial accounts can be used to hide criminal proceeds or evade taxes, federal law does require disclosure of such accounts.” 
Generally, “Congress has directed the Secretary of the Treasury to require residents and citizens of the U.S., or persons in and doing business in the U.S., to maintain records and file reports of transactions and relations with foreign financial agencies.” 
Specifically, every “U.S. citizen, resident and businessperson who has a financial interest in, or signatory authority over, one or more bank accounts, securities accounts or other financial accounts in a foreign country”, must “report that relationship to the U.S. Department of the Treasury if the aggregate value of the accounts exceeds $10,000 at any time during the calendar year”, annually through Form TD F 90-22.1. 
Last year, The Financial Crimes Enforcement Network issued a proposed rule that amends the Bank Secrecy Act (BSA) implementing regulations regarding the Report of Foreign Bank and Financial Accounts. The FBAR filing requirements, authorized under one of the original provisions of the Bank Secrecy Act, have been in place since 1972. Those proposed regulations were finally adopted in part this year. 
FinCEN’s final rule adopts the proposed changes with slight modifications. The final rule reflects FinCEN’s approach to issues raised in comments submitted in response to the proposed rule made by tax professionals and industry experts. The new FinCEN rule:
- explains whether an account is foreign and therefore reportable as a foreign financial account and addresses the treatment of custodial accounts in this context;
- revises the definition of signature or other authority to more clearly apply to individuals who have the authority to control the disposition of assets in the account by direct communication (whether in writing or otherwise) to the foreign financial institution;
- explains that an officer or employee who files an FBAR because of signature or other authority over the foreign financial account of their employer is not expected to personally maintain the records of the foreign financial accounts of their employer; and
- advises filers that they may rely on provisions of this final rule in order to determine their filing obligation for FBARs in those cases where filing was properly deferred under prior Treasury guidance.
For additional discussion on FBAR see, Advisor FYI: Foreign Bank and Financial Account (FBAR).
Tomorrow’s blog will discuss topics relating to life insurance.
We invite your questions and comments by posting them below, or by calling the Panel of Experts.
 Steven Mark Levy. Federal Money Laundering Regulation: Banking, Corporate and Securities Compliance (FMNYL) § 10.02. Wolters Kluwer. 2010; see, also Advisor FYI: Foreign Bank and Financial Account (FBAR).
 31 U.S.C. § 5314(a).
 31 U.S.C. §§ 5314(a), 5314(b); 31 C.F.R. § 103.24, 31 C.F.R. § 103.27(c), (d),
 See 31 CFR Part 101, Federal Register Vol. 76, Num. 37