Is FATCA failing? What do the October 1st numbers say?

This is a question that can be asked given that only 104K of FFIs had registered on the IRS Portal by September 24, 2014. http://apps.irs.gov/app/fatcaFfiList/flu.jsf  When you compare 104K to the IRS estimate that between 400K and 600K need to register, 104K does indeed look small.
I’m not sure the registration numbers of FFIs indicates how successful FATCA is or is not. To zoom out, what was FATCA meant to achieve? Tackling Americans evading tax via offshore accounts right? Wrong. That is twaddle.
None of recent fines for tax evasion relies on FATCA. None. All the regulations required and used for this purpose were there before FATCA. If America wanted to go after American tax evaders the powers they had under Chapter 3 and the fines they could have administered under Chapter 3 of the US Tax Code (and other pre-existing parts of the Tax Code) would dwarf any of the high profile fines we have recently observed.What FATCA did was put the burden on the banks. If that is a good thing then FATCA is a success. To achieve this the IRS would have to have been well funded but to say this would have been self financing is something of an understatement.
On the face of it that means there are a lot of Non Participating FFIs out there. A look at the regulations will tell us that withholding starts in 2014. It is a fact that the regulations state that withholding starts in 2014. But let me ask a question: is that actually what happens in reality?
Withholding occurs on NP-FFI (Non Participating FFIs) and RAH (Recalcitrant Account Holders).
FATCA has been factored into on boarding. For those who doubt this, just try opening an account – you’ll soon find that there are questions in the onboarding process that address FATCA directly.
The two most interesting debates that we hold are regarding documentation (the W8s and acceptable equivalents by IGA) and the pool of FFIs (including EAG members) that should register to acquire a GIIN.  Last month, the GIIN list included 99,861 FFIs (mind you that a substantial number of these registrations are not unique, but instead represent affiliates within EAGs) – see our previous analysis links below.  It is October and only 104,344 are now registered, less than 5,000 these past thirty days.

Non-IGA Countries = 149

Only 5,257 (5%) of these 104,344 registrations are from the 149 countries that have not had an IGA announced with the US.  That means that these 149 countries are already having a 30% FATCA chapter 4 withholding imposed by US withholding agents on most of their US financial investments. Chapter 4 withholding is on more types of income/payments than Chapter 3 withholding (albeit the harshest gross proceeds withholding is not yet imposed).

IGA Countries = 101
Which country had the most movement?  The United Kingdom.  An additional 602 FFIs registered, raising its total to 8,463 from 7,861. Gibraltar reached 307 more GIINs (1,553 from 1,156).  Example of the incremental registration increases include the BVI which broke 3,000 (3,060 from 2,862) and Caymans which broke 20,000 (from 19,216 to 20,070).  
But readers want to know where the BRICs stand?  Brazil still leads the pack 2,498 but that's barely a change from 2,451.  Russia, coming in second (which is ironic given the tit for tat sanctions). yet far behind Brazil, now has 926 up from 897.  China increased by 22 registration to 599 from 577.  
Neither of our neighbors could be much bothered with FATCA registration.  Mexico renegotiated its IGA yet its FFI registration 
85 Canadian FFIs signed up bringing its total to 2,900 from 2,815, whereas only four Mexican FFIs did which sits at 516.
No additional Indian FFI bothered registering in India, leaving it with 391 GIINs.  In fact, most countries had no movement.  
Questions?
Does this mean that their FFIs have given up on US investments?  If that is true, then why has not inward FDI for the US contracted considerably?  
Is it that their governments think the OECD CRS will have a widely divergent system that will somehow trump FATCA (it won't)?  
Are so many FFIs qualifying for non-registration. Haydon and I debate on whether the GIIN is necessary regardless of this self certifying non-registration status.  
Are so many FFIs being sponsored?  Are there just much fewer FFIs than the lowest estimate? Perhaps to the first, and doubtful to the second.
Are the smaller FFIs simply overwhelmed?  We just don't know the answers yet.... industry has several explanations that we will report about.
Why isn't Treasury doing more to drive IGAs and GIIN registrations?
TIGTA reported today that the IRS’s appropriated budget decreased 7.4 percent between Fiscal Years (FY) 2010 and 2013, from $12.1 billion to $11.2 billion after sequestration.  TIGTA stated that the budget cuts resulted in reductions in the number of full-time equivalents by nearly 9 percent, from 94,618 at the end of FY 2010 to 86,310 at the end of FY 2013, including a 4 percent reduction between FYs 2012 and 2013.  The number of enforcement personnel decreased by more than 1,000 employees during FY 2013.  Don't blame the IRS and Treasury - fewer persons are charged with more responsibilities, by example enforcement of health care enrollment and BSA anti money laundering audits.   Other than normal civil libertarian complaints about taxpayer rights and it needing to be a more transparent settlement-based organization with taxpayers, the IRS is doing as good as can be expected given its resources for responsibilities. 
http://lawprofessors.typepad.com/intfinlaw/2014/10/is-fatca-failing-what-do-the-numbers-say.html
http://haydonperryman.com/2014/10/02/is-fatca-failing-here-is-my-reply-haydon-perryman/