FATCA regulations may be ultra vires, say MPs

The Select Committee on Statutory Instruments (SCSI) has concluded that the International Tax Compliance (United States of America) Regulations, SI 2013/1962, may be ultra vires. These regulations bring into effect the intergovernmental agreement made on 12 September 2013. The SCSI believes that they may be ultra vires because: the underlying law in the US changed between the signing of the agreement and the SI being laid before parliament; the regulations include a provision that purports to implement ‘changes’ to the signed agreement (following agreement with the US Treasury) so that it is in line with the changed US law even though the actual agreement has not been changed; and the enabling power for the Regulations only enables regulations to bring into force an agreement signed or modified. The SCSI has therefore reported the regulations to the House of Commons. No procedure in the House of Commons necessarily follows from the report, but it is expected that the regulations will be reconsidered.