G5 FATCA agreement

With FATCA making an impact in the lives of U.S citizens, GC holders and other U.S tax residents, I've found this link from HMRC which details the agreement with the IRS. To get over U.K data protection laws, this will be an intergovernmental agreement for those in the U.K and certain other E.U countries known at the G5.
Some High St U.K banks are about to change their terms and conditions to reflect FATCA. I had  read through one with Lloyd's Banking group (October 2nd 2012), which stated that the they're legally allowed to close the accounts of those that don't provide all necessary information SS number and so on to them. This is not going to be a pleasant time; no doubt linking the individuals' filed 8938/Schedule B to what the bank will report back about them to the IRS via HMRC.

http://www.hm-treasury.gov.uk/press_67_12.htm

Timely post. As Barcrest indicates, some UK banks are starting to react.

From HSBC's latest Changes to your Terms and Conditions (06/12):
We may require you to provide us with information and documentation to determine your liability to tax (both within the UK and, where appropriate, overseas), and we may share this information and documentation with domestic and foreign tax authorities to establish your liability to tax in any jurisdiction. If you do not supply us with adequate and timely information and documentation that we have requested, then we may withhold income or a proportion of income, from your account and pass it to domestic or foreign tax authorities

I would guess more will follow relating to 'US persons' since a current account pays no interest, and a Premier savings account only pays 0.1% interest. Not much to withhold. But, I've come across no new T&C's from Barclays or other Building Societies,....yet. There are rumors (unverified?) that within the near future, RBS will no longer accept the opening of new on line accounts from anyone not resident in the UK.

Judging from comments on the Swiss expat site, the banking situation is very mixed. They range from 'no Yanks allowed'; to requirements for a signed statement from your paid tax preparer; to limiting and isolating the types accounts available to 'US Persons'; to limited accounts only available to Swiss Citizens or residents of Switzerland; to having to purchase a share of GE stock (SEC reportable); to no change really.

Since the US Treasury tacked DATCA (a requirement for all US FI's to identify non-US account holders) on to existing regulations (T.D. 9584), there has been some uproar in the US concerning the 'reciprocity' of FATCA. As that relates to the G5 agreement, there have been rumblings out of Germany that without reciprocity, there will be no agreement.

What will happen in Europe once un-informed 'accidental Americans' discover they have a US obligation? If Canada is an example, there will be a fair share of unhappiness.

If you've been following the writings of J. Richard (Dick) Harvey, one of the group that wrote the FATCA legislation, it's obvious the desire was to deal with all non-US banks individually, and not through cross government agreements. Those agreements seem to be reducing the strength of the 30% withholding regulations. By the way, the creators of FATCA knew there could be unfortunate banking consequences for expat Americans, but felt in time, ALL the world would love the principles of FATCA so much, they would all come on board and the issue would go away in several years. Thanks for (not) thinking of our immediate banking needs.