FATCA is used by government personnel to identify indices of U.S. people and their assets and allow a comparison in which assets have been reported by individuals themselves. As a result, the U.S. government has entered into bilateral agreements with the governments of several countries for the exchange of information. The key to the fight against tax evasion has been international cooperation on tax legislation and the effective exchange of information between countries. The Organisation for Economic Co-operation and Development (OECD) is at the forefront of international efforts to promote all forms of information exchange, including on demand, spontaneously and automatically, and the fight against the erosion and profit base (BEPS) through economic substance testing. The Government of the United Arab Emirates is firmly committed to the above-mentioned initiatives and has signed various treaties and international agreements with the United States and the OECD. The obligations of the FATCA regime do not take into account national laws (e.g. B data protection rules and privacy issues) which prohibit the exchange of information requested by the IRS. Therefore, even if an IFF is willing to disclose information, it may violate local laws and be subject to regulatory sanctions and potential lawsuits in the jurisdiction it operates. Given the overall scope of the FATCA regime and the management of the potential conflict with domestic laws, the U.S. Treasury has proposed the creation of an intergovernmental framework to respect and report on intergovernmental agreements (“IGAs”).

THE EGAs were modelled in two forms: Model 1 and Model 2. The two forms differ firstly because of the obligations of reciprocity and relationship. Model 1A requires a relationship between the United States and partner justice, where MFIs in that partner jurisdiction should report to their respective regulatory authorities, which in turn will report to the IRS and vice versa. Model 1B does not require mutual relations between the United States and the partner justice.. . . .