This is making life tricky for international oil companies trying to do business in rough and tumble places while complying with U.S. or other domestic laws.
The IRS may do what it sees as rough justice by calculating statutory FBAR penalties that end up approximating the 27.5% miscellaneous offshore penalty.
Part of my work involved diving on some of the most biologically important reefs around the globe (yes, a rough job, I know, but somebody had to do it).