Early last year the US Department of Treasury and the Inland Revenue Service (IRS) along with certain other countries set out a framework for the potential establishment of intergovernmental agreements (IGAs) to better facilitate the implementation of FATCA. In the absence of entering such an IGA FATCA introduces a 30% withholding tax on US source payments if the Foreign Financial Institution in receipt of the payment has not entered a FATCA reporting agreement with the IRS identifying US customers to whom it makes payments. On 5 December 2012 the Minister for Finance in his Budget speech announced that an IGA had been agreed between Ireland and the US. This IGA was subsequently signed on 21 December 2012. The IGA broadly follows the IGA signed between the UK and the US on 12 September 2012 which itself broadly follows the Model IGA (reciprocal version) released by the US Department of Treasury on 26 July 2012. The agreement provides for automatic reporting and exchange of information in relation to accounts held in Irish financial institutions by US persons and the reciprocal exchange of information regarding US financial accounts held by Irish residents. Certain entities and products listed in Annex II to the IGA are exempt from FATCA or deemed compliant with FATCA (e.g. certain regulated funds where interests are not held by or through a Non-participating Financial Institution (i.e. broadly a Financial Institution that does not have an IGA with the US and has not entered into a FATCA agreement with the IRS). It is understood that enabling legislation will be detailed in the Finance Bill 2013 which is due for publication in the first quarter of this year. The U.S. Department of Treasury and the IRS released the long-awaited final regulations on FATCA in January.