Release of updated OECD CRS related FAQ’s
On 10 November 2015, the OECD issued an updated version of their CRS FAQ’s which included further guidance on the timing for obtaining and validating self-certifications on account opening.
Updated version of their CRS FAQ’s
On 10 November 2015, the OECD issued an updated version of their CRS FAQ’s which included clarification on the timing for obtaining and validating self-certifications on account opening.
The Common Reporting Standard (“CRS”) provides that Reporting Financial Institutions when opening new individual and entity accounts must obtain and validate the account holders CRS self-certification on the date the account is opened (i.e. on “day one”).
While it is intended that a Reporting Financial Institutions can only open the account once a self-certification is received and validated, the OECD accept that in certain circumstances it may not be possible to validate the self-certification until “day two”. E.g. where the self-certification validation process is completed by a back office function. In such cases, provided the Reporting Financial Institution has the self-certification, it has up to 90 days to validate it during which the account can operate as normal.
The OECD recognise that there are a limited number of instances, where due to the specificities of a business sector it is not possible for the Reporting Financial Institution to obtain a self-certification on ‘day one’ of the account opening process. E.g. where an insurance contract has been assigned from one person to another or where an investor acquires shares in an investment trust on the secondary market. In such circumstances, the OECD expects the Reporting Financial Institution to both obtain and validate the customer self- certification as quickly as feasible, and in any case within a period of 90 days.
In each case, it is important to note that should the Reporting Financial Institution have a CRS reporting obligation in respect of the period in which the account was opened before the 90 days are up, the 90 day period is cut short and the account opened in the reporting period should be included by the Reporting Financial Institution on their CRS return for that period.
Obtaining a self-certification for New Accounts is a critical aspect of ensuring that the CRS is effective. As such, in all cases, if you are a Reporting Financial Institution you should ensure that you have obtained and validated customer self-certifications in time to be able to meet your due diligence and reporting obligations with respect to the reporting period during which the account was opened.
Other useful information has been provided within the FAQs in relation to the requirement to obtain a TIN in the framework of the curing procedure and reliance on publicly available information for new entity accounts.
How we can help
Further information on CRS including the latest CRS FAQ’s issued by the OECD can be accessed on the OECD AEOI portal.
If you are not aware of your CRS obligations or would like further information on CRS please contact a member of the Deloitte CRS team.