handbook-tb

Diane Ring4.2.3 ChallengesSuccessful automatic exchange of information requires several elements:(a) a common standard regarding information reporting; (b)due diligence by financial institutions; (c) an exchange process; (d) alegal framework through which to execute the exchange; and (e) compatibletechnical systems. 43 Primary challenges in moving from theidea of automatic information exchange to the reality of widespreadcommitted implementation have included: historic bank secrecy provisions,disagreement on the types of information, reciprocity, confidentiality,taxpayer identification, data security, format and feasibility.The first challenge, bank secrecy, has been under attack since approximately2009. Over the past five years, most countries have substantiallylimited or eliminated domestic rules on bank secrecy that barred theirown financial institutions from providing client information (to thelocal government or foreign governments) and/or barred the countryfrom providing that information to another country pursuant to anexchange of information request.4.2.4 OECD, the G20 and automatic exchangeThe remaining challenges have been the focus of global work over thepast two years. As of April 2013, the G20 has formally supported the“progress made towards automatic exchange of information whichis expected to be the standard, and urge[d] all jurisdictions to movetowards exchanging information automatically with their treaty partners,as appropriate.” 44 The G20 had given the OECD a mandate toprepare standards and guidance on automatic exchange of information.In February 2014, the OECD released the first part of this project, the“Standard for Automatic Exchange of Financial Account Information:43OECD, Automatic Exchange of Information: What it is, How it works,Benefits, What remains to be done (Paris: OECD, 2012), available at http://www.oecd.org/ctp/exchange-of-tax-information/automatic-exchange-ofinformation-report.pdf.44Communiqué, G20 Meeting of Finance Ministers and CentralBank Governors (Washington, 18-19 April 2013), available at https://www.banque-france.fr/fileadmin/user_upload/banque_de_france/Eurosysteme_et_international/The-Final-Communique-of-G20_FM_CBG_Meeting-in-Aprill_2013.pdf.544