Hong Kong's banking regulator has told banks in the territory to ensure they are prepared for an increase in foreign legislation related to tax evasion, in particular the U.S. Foreign Account Tax Compliance Act (FATCA). In a recent circular to the industry, the Hong Kong Monetary Authority (HKMA) said the issue of tax evasion had assumed "increasing prominence within the international community" and warned that several countries were contemplating introducing changes to their tax regimes. The HKMA said banks should assess critically the potential implications of such changes for their customers and operations, taking into account their scale and nature of business and geographical areas of operation. It also suggested seeking legal advice to ensure compliance. With regard to FATCA, the HKMA highlighted that foreign financial institutions (FFIs) would have to report to the U.S. Internal Revenue Service (IRS) information about financial accounts held by U.S. taxpayers, or by foreign
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