Bahrain Signs U.S. FATCA Agreement.

Bahrain recently signed an agreement to implement the US Foreign Account Taxpayer Compliance Act with the United States. FATCA, enacted by the US Congress in 2010, is intended to ensure that the U.S. obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their U.S. clients will result in a requirement to withhold a 30% percent tax on payments of US-sourced income. The Intergovernmental Agreement will provide for a simplified framework for Bahraini financial institutions to comply with the U.S. FATCA through a centralized agency, while removing any legal restrictions on the collection and exchange of the relevant information.