The U.S. government has issued proposed regulations for the implementation of its Foreign Account Tax Compliance Act, as it enters into the next stage of rolling out the controversial legislation.

FATCA is aimed at encouraging Americans living overseas to disclose their accounts in non-U.S. financial firms, and to become compliant with their U.S. tax obligations.

The revised rules, issued Wednesday, appear to address some of the issues raised by foreign financial institutions (FFIs), including those of Canadian firms, in terms of the anticipated difficulty of implementing the initiative.

FATCA, introduced in 2010, requires FFIs to come to an agreement with the U.S. Treasury Department, by the summer of next year, to provide the Internal Revenue Service with the names of all U.S. account holders who hold more than a set amount of assets with that institution. FFIs that choose not to come to an agreement would be assessed a 30% withholding tax on U.S.-source income and the gross proceeds from U.S. property sales. Some non-financial foreign entities would also be subject to the FATCA regime.

Since the introduction of FATCA, FFIs and governments around the world have raised a multitude of concerns with U.S. authorities about the difficulty of implementing the rules, both in terms of the operational and logistical burden to the FFIs and because complying with the U.S. regulations would, in some cases, cause firms to be in violation of domestic privacy laws.

In recent weeks and months, the U.S. authorities have been signaling that they might be willing to make changes to FATCA that would address some of the concerns of FFIs, while pressing ahead with their desire to implement the initiative.

On Wednesday, the U.S. government announced that it had come to arrangements with the governments of the UK, France, Germany, Italy, and Spain to work together to establish a protocol that would see the U.S. and the foreign nations exchange information on a government-to-government basis. Previously, under FATCA, FFIs in those five countries would have had to report to the U.S. government directly.

“An intergovernmental approach to FATCA implementation would address these legal impediments to compliance, simplify practical implementation, and reduce FFI costs,” said the Treasury Department in a press release announcing the agreements.

The U.S. government has said that it is open to establishing similar arrangements with other countries.

As well, the revised FATCA rules, released in a 388-page report, appear to offer FFIs relief in areas such as account identification and reporting requirements, among many other areas.

“The U.S. Treasury Department is listening. It has heard the message that FATCA implementation [under the previous proposed rules] would have been extremely onerous and expensive, not only for financial institutions around the world, but also for their clients,” says Andrea Taylor, director at the Toronto-based Investment Industry Association of Canada.

The Treasury Department is asking that interested parties wishing to comment on the proposed FATCA rules do so by April 30.