In one of the letter sent to the IRS by the Institute of International Bankers and the European Banking Federation, it is said that the proposed rules issued by IRS creates unnecessary burdens and costs.
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Meanwhile, though the IRS cannot rescind the law, they are planning to hold a hearing and could amend how and when some aspects of the rules are implemented.
HSBC, Deutsche Bank, Bank of Singapore and DBS have all turned away business, citing the tax evasion rules of US.
Tan Su Shan, head of private banking at DBS described the regulatory attitudes toward US clients as draconian. "I don’t open US accounts, period," she remarked.
The law which is to begin from 1 January 2012, requires financial institutions based outside the US to obtain and report information about income and interest payments accrued to the accounts of American clients.
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By GlobalDataThis in turn could lead to additional compliance costs for banks and fewer investment options and advisers for all US citizens living abroad, which could affect their ability to generate returns.
Bank of Singapore, the private-banking arm of Oversea-Chinese Banking Corp (OCBC) has turned away millions of dollars from Americans because it does not want to deal with the regulatory hassle, said CEO Renato de Guzman.
"We have enough business in Asia, so we don’t want to make our lives too difficult," todayonline quoted de Guzman as saying.
It was in July 2010 that HSBC had decided not to offer wealth-management services to Americans from locations outside their home country after the tax authorities had stepped up a probe of the bank’s US clients.
Americans would be better served by private bankers in the US, Mr Goh Kong Aik, a spokesman for HSBC in Singapore opined.
