May 2017 JD Supra

The terms FDAP (Fixed, Determinable Annual and Periodical Income) and ECI (Effectively Connected Income) are expansive terms. They are the backbone behind the tax withholding, and reporting requirements imposed on US Banks with respect to outbound payments. Many of the individuals that are responsible for ensuring compliance with the rules applicable to the US Financial Institutions are not familiar with the rules, or not aware of the consequences for lack of compliance.