Foreign financial institutions have won some significant concessions from the United States Treasury in its latest draft of the Foreign Account Tax Compliance Act.The draft, which was released yesterday, includes some relaxation of the account classification rules, a concession on the compliance rule and the possibility of a more bilateral approach to the administration of the regime.Ernst & Young's Oceania Banking and Capital Markets leader, Paul Siviour, said: "We think these changes are significant. They will save money and make the compliance task easier."FATCA is an anti-tax avoidance regime. It aims to stop tax abuses by US citizens holding overseas bank and investment accounts.It obliges foreign financial institutions to report to the US Internal Revenue Service on the banking activities of any customers who have US citizenship.The financial institution must withhold 30 per cent tax on any interest or dividend payments made to account holders who refuse to give permission for their account details to be supplied to the IRS.The original classification rules included a threshold account size of US$50,000 for individuals and non-individuals, such as companies, to be covered by FATCA.In the latest draft, the minimum size for individuals remains at $50,000 but the threshold for non-individuals is now $250,000.Financial institutions have to conduct a higher level of search through the records of "high value" accounts. The threshold size for high value accounts has been increased from $500,000 to $1 million.A set of rules applying to the treatment of private banking accounts has been removed.Siviour said an important change is that the new-account information that financial institutions need to capture has been aligned more closely to current requirements under anti-money laundering legislation.The new draft also relaxes the criteria for financial institutions that are deemed to comply. In the original version, institutions had to show that they had no US account holders. Siviour said: "You can now be deemed compliant if 98 per cent of your accounts relate to resident taxpayers."