If a loan agreement is binding before January 1, 2013, it is usually a ”grandfather bond.” Accordingly, payments made under this agreement do not fall within the scope of the FATCA deduction, except in the event of a ”substantial change” in the agreement on Or after January 1, 2013. As of January 1, 2013, all parties will have to consider whether amending an agreement by January 1, 2013 will do so within FATCA. For now, the parties should reflect on their control over the amendments. For example, a lender should consider whether an amendment that requires only the agreement of majority lenders could bring fatca into play. On 8 February 2012, the United States, the United Kingdom, France, Germany, Italy and Spain issued a joint statement on the implementation of FATCA. The statement sets out a possible framework whereby FFIs could be considered ”compliant” in these five European jurisdictions under FATCA, without entering into separate global agreements with US tax authorities. Instead, the United States would indirectly obtain the information it wants from these FFIs through new reporting laws that will be transposed into these five legal orders. This does not mean that FFIs can ignore the risks of fatca withholding in these jurisdictions. In particular, note that the grand bourgeoisie applies only to instruments that are ”obligations” for U.S.

tax purposes. Therefore, a loan that treats U.S. tax law as equity (unlikely for standard syndicated loans) is not eligible for the grandfather. Nor is a framework contract that sets out only general and general terms that will apply to a number of future contracts between the parties. FATCA`s disclosure and compliance requirements must be taken into account at the strategic level. But the question many parties to syndicated loans (particularly new syndicated loans) are asking is simple: could payments made under this facility agreement (including payments from agents and other financial parties) be subject to FATCA withholding? John L. Harrington and Adam Pierce summarize the key factors that may determine the answer to this question.