Common Reporting Standard: Survivor's Guide to OECD Automatic Exchange of Information of Offshore Financial Accounts

NON-CRS
Individuals
and entities
NON-CRS
Individuals
and entities
Eesh Aggarwal

COMMON REPORTING STANDARD
Survivor’s Guide to OECD Automatic Exchange of
Information of Offshore Bank Accounts

COMMON REPORTING STANDARD
Survivor’s Guide to OECD Automatic Exchange of
Information of Offshore Bank Accounts
Eesh Aggarwal, FCA TEP
SOCTA PUBLICATIONS


7
Introduction
The Common Reporting Standard (CRS) is the latest weapon in the
Organisation for Economic Co-operation Development (OECD) arsenal
to attempt to tackle global tax evasion. Nearly 100 countries have agreed to
implement the CRS. The aim is for each country to receive information on
offshore accounts held overseas by its taxpayers. Member countries will force
domestic financial institutions to report to them data on accounts which are
owned by tax residents of other CRS member countries. Relevant data will
then be shared with other CRS member countries.
Such legislation is fraught with problems and is flawed in its primary purpose
– to tackle tax evasion.
This book will explain the CRS, the legal problems associated with it and how
it misses its primary objective of eradicating tax evasion.
The book is written in an easy to read style and assumes no prior knowledge of
business, finance or taxation. At the same time, diverse topics are dealt with in
sufficient depth to enable readers to achieve a high level of understanding. It is
written from a practical perspective by a practitioner in this field. It is hoped
this practical approach will complement any academic publications.

8
The book is divided into four parts:
• Part I looks at the wide variety of players and vested interests in the offshore
financial and tax world and the factors that led to the creation of the CRS.
• Part II explains the CRS in detail from the viewpoint of different parties
– reporting institutions, individual account holders, and various types of
entity account holders (companies, partnerships, trusts and foundations).
Strategies to comply with the CRS and retain privacy are discussed for the
benefit of account holders.
• Part III explores the future impact of the CRS and how the behaviour of
tax departments, financial institutions and account holders will change. It
identifies two countries that will benefit immensely.
• Part IV provides detailed technical guidance with respect to due diligence
procedures required by the CRS. It is suitable for compliance departments
of financial institutions.
Part I – Stakeholders and their vested interests
Part I examines the origins and rise of the offshore finance sector and offshore
tax evasion. It explains the cause of huge government deficits in the Western
world and how governments danced to the tune of big business. Politicians
paid lip service to the fight against offshore tax evasion until the 2008 financial
crash. An angry US public forced political action and the Financial Accounts
and Tax Compliance Act (FATCA) was born. The ideology on which FATCA
is based is discussed. The flaws of FATCA are discussed including issues of
privacy, sovereignty of nations and why it is an economic disaster. The CRS
aped FATCA and its similar flaws are analyzed. The biggest tax avoiders were
exempted from CRS, including certain illegal transactions! Part I finishes
with the implications of the loss of privacy for the weak and the wide ranging
scope for data abuse including political oppression, kidnapping and blackmail.
Part II – Nuts and bolts of the CRS
The operation of the CRS is discussed in this part.
Financial institutions that must report to governments are identified. These
include banks, funds, custodial entities and certain insurance companies.
Surprisingly, trusts and foundations and their managers may also be caught
in the net. Group holding companies may also be trapped. The various parties
involved in the investment fund business and the provision of offshore
corporate and trust services are also analyzed in case they may be classified as


9
financial institutions.
The different types of accounts and which persons are reportable are discussed.
Account holders are classified into different types. Each type is explained in
detail and how the CRS impacts on such an account holder. Options for each
type of account holder to mitigate the impact of the CRS are detailed.
Part III – The impending doom
This section gazes into the future and attempts to identify how the behaviour
of account holders and financial institutions will change. It examines the
history of fighting offshore tax evasion by various governments and changes
in future behaviour. One country is identified as a possible major beneficiary,
as a result of FATCA and the CRS, which may become the world’s largest tax
haven. Another country is identified as a key haven for privacy. Finally, in the
absence of facts, some interesting theories are promulgated for the benefit of
curious readers.
Part IV – Due diligence guide for compliance professionals
There is a dearth of detailed guidance with respect to due diligence procedures
that must be implemented by financial institutions. The CRS and related
commentary provide guidance but key concepts are scattered randomly within
the official published material. This part attempts to set out procedures in a
logical manner so that compliance departments do not waste valuable time
seeking out pieces of the jigsaw and instead concentrate on developing and
implementing policies and procedures. The main aspects have been addressed.
It is not possible to provide guidance on every scenario. However it is hoped
there is sufficient guidance to enable compliance officers to logically work out
requirements for scenarios not mentioned in this publication.


11
How to read this book
The CRS is a complex beast and difficult to explain in simple terms. An attempt
has been made to do this and hopefully it will be successful.
The book has been written from the viewpoint of the different types of
individuals and institutions that are affected by the CRS. It has deliberately not
been written as a standard analysis of the law which frequently requires much
cross referencing to other parts of the book to avoid repetition. Unlike most
legal books, there is repetition in this book. It was felt this was a necessary
trade off to make each chapter self-contained as far as is possible so that the
reader is not inconvenienced by constant references to other parts of the book.
To make the book engaging, examples have been provided naming certain
countries. The examples could have been given using anonymous countries
e.g. country A, country B. It was decided this approach would distract readers
and real examples would be preferred by them. The aim is not to offend any
country but to illustrate underlying concepts. We trust all readers will read
these in this spirit in which they were written.
Please note the word ‘bank’ is used for the convenience of the reader as the vast
majority of reporting will be carried out by banks. The correct terminology
should be financial institution. This category includes custodial institutions,
investment funds, professional corporate trustees, some trusts and insurance
companies with investment products and certain holding companies. The
word bank should be read in this context.
The term ‘he’ is used throughout the book for convenience only and does not
reflect any gender bias.
The author has expressed opinions throughout the book. These are based
on decades of practical experience in international tax and inferences from
the CRS. The CRS is new and has yet to be implemented. It will evolve over
time. Naturally the author’s opinions will change accordingly. Taxation is a
spectrum with two extremes – governments who are tax recipients and wish
to maximize tax revenue, and taxpayers who wish to minimize tax due. The
subject matter is such that a variety of opinions will exist. In the author’s view,
such opinions are perfectly valid as the same facts are viewed from different
viewpoints. It is hoped the book will stir a debate of the CRS and hopefully a
myriad of opinions will emerge.
This book is based on legislation as at 30 November 2015.


13
Preface
Early in 2015, I was requested by a European international tax lawyer to
comment on the Common Reporting Standard (CRS) issued by the
Organization for Economic Cooperation and Development (OECD) the
previous year. The task seemed easy enough – a bit of research and reading
of the CRS would suffice. To my surprise, the standard proved difficult to
read and at that time no OECD commentary existed and little information
was available on the internet. A private international tax conference held in
Singapore proved to be eye-opening as the implications of the standard became
clear. Privacy of individuals and the sovereignty of nations would be lost for no
real gain in tax revenue from fighting tax evasion.
This prompted me to study the standard word by word. It became clear the CRS
implied a knowledge of the Financial Account Tax Compliance Act (FATCA)
was necessary as the CRS was derived from it. This led to a separate painful
exercise that occupied many weeks. The axiom, ‘no pain no gain’, proved as
true as ever.
In the meantime, similar commentary requests came from other clients.
Clients wanted a simple understanding of the CRS, its implications for them
and options for any proactive action they could take. A simple report of a few
pages would suffice.
A draft report was prepared and it became clear such a report would not

14
clarify matters for clients as there were too many new concepts in the CRS.
Talk of participating jurisdiction financial institutions, reportable accounts,
specified insurance company, equity interest, reportable person, controlling
person, active and passive NFE’s would mean nothing to them. The CRS is
25 pages long, of which 14 pages are devoted to definitions! Smothered in
jargon, it almost appeared as if the standard was specifically written to confuse
readers. Only governments and financial institutions would be keen to read the
standard, more out of necessity than for any other reason. Any person whose
accounts would be reportable under the CRS would struggle.
This led to the difficult decision that a detailed analysis would be required in
order to explain the CRS from a practical view point. A formal legal work was
considered but this would be of limited interest only. An attempt was made to
write a simple book with no technical jargon. This proved to be a failure as it
became clear some technical terms would be necessary. Thus a compromise
was reached. The book would be written in clear plain English as far as
possible, including technical explanations and jargon where necessary. To keep
the reading flow going, detailed conditions and parameters which are easily
understood have been referenced to the CRS directly. Any complex conditions
or parameters have been explained in the book.
Finally, following requests from banking compliance officers, the book was
expanded to include a technical due diligence section.
I qualified as a chartered accountant in 1990 in Windsor, England and joined
a medium-sized practice in the City of London. At that time, non-resident
UK companies were popular. The UK government banned these and these
companies promptly closed down and relocated to Ireland. I was tasked with
researching Irish tax and company law to understand how to use non-resident
Irish companies for international tax purposes. This was my first step into the
world of international tax, a journey that still continues to the present day. In
those days, the research was carried out without the benefit of the internet or
emails. As a newly qualified accountant I was surprised, if not shocked, at the
difference in domestic tax laws that applied to local taxpayers and overseas
investors. This gave rise to my curiosity in this field that has never diminished.
Over the years, I have been exposed to many jurisdictions around the world
and a wide variety of clients globally. I have guest-lectured on accounting
and international tax topics over the years, including at the London School of
Economics.
Eesh Aggarwal
December 2015


15
About the author
Eesh Aggarwal qualified as a chartered accountant in 1990 and is a Fellow of
the Institute of Chartered Accountants in England & Wales. Since qualifying
Eesh has specialised in international tax. He is member of the International
Tax Planning Association.
Eesh has guest-lectured in many institutions around the world, including the
London School of Economics. He has authored various articles on international
tax published in journals and magazines over the years.
Eesh advises high net worth clients and provides inhouse training and
compliance guidance to regulated financial institutions, including banks,
funds and trust and corporate providers.
He has lived in the UAE since 2004, together with his wife and two sons. He
enjoys playing squash and chess. He is a keen movie buff and is interested in
military, economic and political history.
Eesh may be contacted at: eesh@soctapublications.com


19
Contents
Introduction 7
How to read this book 11
Preface 13
About the author 15
Acknowledgments 17
List of figures 29
Abbreviations 30
Part I: Stakeholders and their vested interests 33
1 The perceived problem – rampant offshore tax evasion 35
1.1 Offshore beginnings 36
1.2 Sun, sand and la dolce vita 37
1.3 Offshore banking boom 38
1.4 Offshore tax efficient solutions 39
1.5 The dark side of offshore 40
1.6 Laughing all the way to the bank 41
1.7 Only men are born equal 42
1.8 A politician’s best friend 43
1.9 Government response 44
1.10 Tip of the iceberg 49
2 Money merry-go-round 53
2.1 Mediaeval taxation 53
2.2 Government deficit fix 54
2.3 Western experiment - freedom of movement of capital 54
2.4 House of cards 55
2.5 BRICS bulldozer 55
2.6 Western ‘harmful tax competition’ 55
2.7 The tail wags the dog 57
2.8 Failure of Western experimentation 57
2.9 No more economic freedom 58
3 Are financial institutions guilty? 61
3.1 Unwitting accomplices to tax evasion 61
3.2 Biased tax risk assessment 63
3.3 Crime is in the eye of the beholder 64
3.4 Tear up the rule book 65
3.5 Creative compliance 65
3.6 Swiss shenanigans 66
3.7 Failure of anti-money laundering 71
3.8 Fines versus prosecutions 71
3.9 Jail the messenger 72
3.10 Reluctant reformers 73
3.11 Will the CRS reports trigger a wave of bank prosecutions? 73

20
4 The butterfly effect 77
4.1 The tempest 77
4.2 Socialism bails out capitalism 78
4.3 Robin Hood reversed 79
4.4 Averting the public gaze 79
4.5 Swiss catalyst 79
4.6 A red rag to a bull 80
4.7 Biggest tax haven criticises others 81
4.8 US offshore smokescreen 81
5 The irrational logic behind the cure 85
5.1 When political ideology trumps pragmatism 85
5.2 The ideological pendulum 86
5.3 Bootleggers and baptists 89
5.4 The pot calling the kettle black – government evasion 91
6 FATCA - the precursor to the CRS 95
6.1 Every cloud has a silver lining – FATCA 95
6.2 Cost - have your cake and eat it 96
6.3 Global stick – privacy costs 30% US withholding tax 97
6.4 Invasion of global privacy – IGAs 98
6.5 Imaginary carrot – US to share information 98
6.6 Privacy – not all Americans are equal 99
6.7 One rule for the rich 99
6.8 A mere trillion dollars…. to dupe the public 100
6.9 Flawed laws 100
6.10 Not just for tax evasion 102
6.11 What does the future hold? 102
6.12 Brave new world 103
7 The Common Reporting Standard 107
7.1 EU attacks privacy and competition 107
7.2 Jumping on the FATCA bandwagon 108
7.3 The motley crew 109
7.4 EU or global masquerade 110
7.5 No global stick 111
7.6 Have your cake and eat it 111
7.7 Invasion of global privacy 112
7.8 United we stand, divided we fall 113
7.9 Real carrot 113
7.10 Privacy - not all citizens are equal 113
7.11 One law for the rich 114
7.12 The one country that escapes the CRS 114
7.13 Flawed laws 114
7.14 Brave new world – part 2 116
8 Death of sovereignty 119
8.1 Stage one 120


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8.2 Stage two 121
8.3 New world order? 124
9 1% fool’s gold 127
9.1 What is the target? 128
9.2 Fool’s gold 128
9.3 Ignore principles at your peril 129
9.4 How did the US government get it so wrong? 129
9.5 The 1% target 130
9.6 The one-way US government mirror 130
9.7 Lemmings abound 131
9.8 The one-way OECD governments’ mirror 132
9.9 Information for information’s sake 132
9.10 Pig’s breakfast 133
9.11 See no evil 133
9.12 Easier to write a cheque to the IRS 133
10 Get out of jail free 137
10.1 Aiming at the wrong target 137
10.2 Ignorance is bliss 138
10.3 Why is big business exempt? 139
10.4 Why are trading entities exempt? 145
10.5 The insurance kiss of life 146
10.6 It’s a rich man’s world 149
11 Privacy by patronage 153
11.1 Fundamental human right breach 153
11.2 Disproportionate data collection 154
11.3 OECD 155
11.4 Tracking total individual wealth 155
11.5 Fundamental non-human right honoured 155
11.6 No accountability 156
11.7 The one unexpected exception 156
12 Quis custodiet ipsos custodes? 159
12.1 Legal (mis)use of data by the taxman (1) 159
12.2 Legal (mis)use of data by the taxman (2) 160
12.3 Legal (mis)use of data by government 161
12.4 CRS data – who gets it? 162
12.5 Who guards the data? 162
12.6 Quis custodiet ipsos custodies? (Who guards the guards?) 163
12.7 Accidents will happen? 163
12.8 Illegal mis(use) of data 164
12.9 Hunting the hunter 165
12.10 Great expectations 166
12.11 Unintended consequence 166
12.12 Accountability to taxpayers 166

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Part II: Nuts and bolts of the CRS 171
13 Common Reporting Standard overview 173
13.1 Common Reporting Standard (CRS) framework 174
13.2 Reporting process 175
14 Reporting financial institutions 179
14.1 Types of financial institution 181
14.2 Use of service providers 187
15 Are trusts or trustees financial institutions? 191
15.1 Financial assets 192
15.2 Trust structures 193
15.3 Trustees 193
15.4 Trusts 196
15.5 Trust subsidiaries 198
15.6 CRS reporting responsibility – in case both trust
and trustee are financial institutions 201
16 Are foundations or council members financial institutions? 207
16.1 Financial assets 208
16.2 Foundation structures 208
16.3 Council members 209
16.4 Foundations 212
16.5 Foundation subsidiaries 214
16.6 CRS reporting responsibility – in case both foundation
and council member are financial institutions 217
16.7 Which assets are reportable? 218
17 Are TCSP’s reporting financial institutions? 223
17.1 Trust and corporate services providers 223
17.2 Is the TCSP an entity? 223
17.3 CRS residency 224
17.4 Which TCSP activities make it a reporting financial institution? 224
17.5 Custodial services 224
17.6 Management and investment services 227
17.7 Which assets are reportable? 229
18 Investment fund industry 233
18.1 Money and financial assets 233
18.2 Reporting financial institution 234
18.3 Investment entity based in a CRS country 235
18.4 Investment fund investing primarily in non-financial assets 237
18.5 Parties to an investment fund 237
18.6 CRS reporting responsibility – multiple financial institutions 240


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19 Financial accounts 245
19.1 Potentially reportable financial accounts 245
19.2 Depository accounts 246
19.3 Custodial accounts 247
19.4 Equity and debt interest in financial institutions 248
19.5 Cash value insurance contracts 249
19.6 Annuity contracts 250
19.7 Excluded accounts 251
19.8 Reportable financial accounts 252
19.9 Reportable balance rules 252
20 Who is reportable? 257
20.1 Exempt persons 257
20.2 Non-CRS tax residents 258
20.3 CRS tax resident individuals 258
20.4 CRS tax resident entities 258
20.5 CRS tax resident controlling persons 259
20.6 Active and passive entities 260
20.7 Non-CRS resident trusts 261
21 Individual accounts 265
21.1 Background 265
21.2 Parties to an individual bank account 266
21.3 Tax residency 266
21.4 The future – ‘Big Brother’ automatic reporting 267
21.5 Information required to be held by banks 267
21.6 Automatic global reporting mechanism 268
21.7 What will be reported to your local tax authority? 269
21.8 Key dates 271
21.9 Account closure 271
21.10 Internet access and ‘hold mail’ services 271
21.11 ‘Care-of ’ services 272
21.12 Power of attorney 272
21.13 Individual accounts – 10 survival options 273
21.14 Individuals content to waive privacy 274
21.15 Individuals who wish to retain privacy 276
22 Estate of deceased persons 287
23 Company accounts 289
23.1 Background 289
23.2 Parties to a company 290
23.3 CRS classification of companies 290
23.4 Effective management of companies 291
23.5 Tax residency 291
23.6 Nominees 292
23.7 The dark side - undetectable bank accounts 292
23.8 The future – ‘Big Brother’ automatic reporting 293

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23.9 Information required to be held by banks 293
23.10 What will be reported and to which tax authorities? 295
23.11 Key dates 300
23.12 Company accounts – 14 survival options 301
23.13 Owners and companies content to waive privacy 302
23.14 Owners and companies who wish to retain privacy 304
24 Partnership accounts 319
24.1 Background 319
24.2 Parties to a partnership 320
24.3 CRS classification of partnerships 321
24.4 Effective management of a partnership 322
24.5 Tax residency 322
24.6 Nominees 323
24.7 Undetectable bank accounts 323
24.8 The future – ‘Big Brother’ automatic reporting 323
24.9 Information required to be held by banks 324
24.10 What will be reported to which tax authorities? 325
24.11 Key dates 331
24.12 Partnership accounts – 14 survival options 332
24.13 Partnerships and partners content to waive privacy 333
24.14 Partnerships and partners who wish to retain privacy 335
25 Trust accounts 349
25.1 Legal systems 349
25.2 Background 350
25.3 Qui est in custodia custodibus? (Who guards the guards?) 351
25.4 Parties to a trust 352
25.5 CRS classification of trusts 352
25.6 Effective management of trusts 353
25.7 Tax residency 354
25.8 Nominees 354
25.9 The dark side - undetectable bank accounts 355
25.10 The future – ‘Big Brother’ automatic reporting 356
25.11 Information required to be held by banks 356
25.12 What will be reported to which tax authorities? 358
25.13 Key dates 364
25.14 Trust accounts – 13 survival options 365
25.15 Trusts and connected individuals content to waive privacy 367
25.16 Trusts and connected individuals who wish to retain privacy 368
26 Foundation accounts 381
26.1 Legal systems 381
26.2 Background 382
26.3 Qui est in custodia custodibus? (Who guards the guards?) 383
26.4 Parties to a foundation 384
26.5 CRS classification of foundations 384
26.6 Effective management of foundations 386


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26.7 Tax residency 386
26.8 Nominees 386
26.9 The dark side - undetectable bank accounts 387
26.10 The future – ‘Big Brother’ automatic reporting 388
26.11 Information required to be held by banks 388
26.12 What will be reported to which tax authorities? 390
26.13 Key dates 396
26.14 Foundation accounts – 13 survival options 396
26.15 Foundations and connected individuals
content to waive privacy 399
26.16 Foundations and connected individuals who wish to
retain privacy 401
27 Implementation unknowns 415
27.1 Bilateral agreements 415
27.2 Tax residency 416
27.3 Different definitions 417
27.4 Undocumented accounts 418
27.5 Multiple financial institutions 418
27.6 Monitoring dicretionary beneficiaries 418
27.7 Be fined at your own peril 419
Part III: The impending doom 423
28 The hare and the tortoise 425
28.1 CRS reports – the new panacea 425
28.2 A trillion dollar fishing net to catch minnows… 426
28.3 …whilst ignoring the big fish 426
28.4 The wasted catch (mostly) 427
28.5 How will governments react? 427
28.6 The track record of government enforcement 428
28.7 A new hope – kick the habit 433
28.8 Confused governments and taxpayers 433
28.9 Cost of the exercise – money and privacy 434
29 The future 437
29.1 Will tax evasion be eliminated or dramatically decreased? 439
29.2 Follow the money 439
29.3 Follow the taxpayer – change of residency (or not) 441
29.4 Future transactions 442
29.5 Illegal invasion of privacy? 444
29.6 Cracks in the data dam 445
29.7 Cost of a white elephant 446
29.8 Impact on individuals and organisations 446
29.9 And finally… OECD developments 449

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30 USA - privacy winner for non-residents 453
30.1 Welcome to the land of the free 454
31 The United Arab Emirates – CRS privacy winner for residents 457
31.1 A desert jewel 457
31.2 Residency 458
31.3 No tax… 459
31.4 …but access to tax treaties! 459
31.5 Existing financial accounts 459
31.6 Privacy 459
31.7 Unique position 460
32 Conspiracy theories 463
32.1 Smokescreen 463
32.2 Follow the wealth of citizens 464
32.3 Invasion of privacy 464
32.4 New cat and mouse games 464
32.5 The long arms of governments 465
32.6 Kill the competetion 466
32.7 Conclusion 466
33 Conclusion 469
33.1 Past 469
33.2 Present 470
33.3 Future 471
Part IV: Due diligence guide for compliance
professionals 477
34 Due diligence: individual accounts – preexisting 479
34.1 Step 1: Identify any individual accounts
outside the scope of reporting 480
34.2 Step 2: Divide the remaining Preexisting Individual Accounts 481
34.3 Lower Value Account procedures 481
34.4 High Value Account procedures 498
34.5 Deadlines 506
35 Due diligence individual accounts - new 509
35.1 Account opening 509
35.2 Tax Residency 510
35.3 Self-certification 511
35.4 Result 511
35.5 On-going Monitoring 512
35.6 Deadlines 513


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36 Due diligence: entity accounts – preexisting 515
36.1 Preexisting Entity Account 515
36.2 Exempt accounts – value up to US$ 250,000 517
36.3 Identify Preexisting Entity Accounts subject to review 517
36.4 Step 3 – Review procedures 517
36.5 Test 1 – Review procedures to check if the Entity
(Account Holder) itself is a Reportable Person 519
36.6 On-going Monitoring - test 1 525
36.7 Test 2 - determine if the Entity is a Passive NFE with
Controlling Persons who are Reportable Persons 526
36.8 Deadlines 530
37 Due diligence: entity accounts – new 533
37.1 Entity Accounts – New 534
37.2 Test 1 – Review procedures to check if the Entity
(Account Holder) itself is a Reportable Person 536
37.3 On-going Monitoring – test 1 541
37.4 Determine if the Entity is a Passive NFE with
Controlling Persons who are Reportable Persons 543
37.5 Deadlines 547
38 Self-certification and relationship managers 549
38.1 Purpose 549
38.2 Content 549
38.3 Signature 553
38.4 Self-certifications furnished on account-by-account basis 553
38.5 Format 553
38.6 Storage of self-certification 554
38.7 Examples: 554
38.8 Use of third party providers 555
38.9 Validity of self-certifications 557
38.10 Reasonableness of self-certifications 557
38.11 Curing self-certification errors 560
38.12 Change of circumstances 561
38.13 Relationship manager inquiry for actual knowledge 562
39 Documentary evidence 567
39.1 Documentary evidence 567
39.2 Standards of knowledge 569
39.3 Documentation collected by other persons 571
39.4 Reliance on documentary evidence 573
39.5 Requirements for validity of Documentary Evidence 575
39.6 Storage of documentation 579
39.7 Currency translation rules 579
40 Active and passive NFEs 581
40.1 Active NFE 581
40.2 Passive NFE 585

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Appendices 589
1 Common Reporting Standard: Introduction and overview 591
2 Multilateral Model Competent Authority Agreement 601
3 Model Bilateral Competent Authority Agreement (reciprocal) 611
4 Nonreciprocal Model Competent Authority Agreement 619
5 Common Reporting Standard 629
6 OECD - Early adopter countries 660
7 OECD - Late adopter countries 662
8 Tax administration: UK automatic exchange of information 664
9 Offshore voluntary disclosure programmes (OECD 2015) 666
10 OECD member countries 667
Index 669


29
List of figures
Figure 1: Government response 44
Figure 2: Financial institutions 75
Figure 3: FATCA cost US$ 2 trillion 96
Figure 4: Misuse of data 167
Figure 5: Reporting process 175
Figure 6: Financial institutions 188
Figure 7: Non-reporting financial institutions (exempt) 189
Figure 8: Trustee classification as a financial institution 203
Figure 9: Trust classification as a financial institution 204
Figure 10: Trust subsidiary classification as a financial institution 205
Figure 11: Council member classification as a financial institution 219
Figure 12: Foundation classification as a financial institution 220
Figure 13:
Foundation subsidiary classification as a
financial institution 221
Figure 14: Trust and corporate service provider 230
Figure 15: Investment entities 242
Figure 16: Financial accounts - which are reportable 253
Figure 17: Excluded accounts 254
Figure 18: Individual accounts 283
Figure 19: Company reporting 314
Figure 20: Company accounts 315
Figure 21: Partnership reporting 344
Figure 22: Partnership accounts 345
Figure 23: Trust reporting 377
Figure 24: Trust accounts 378
Figure 25: Foundation reporting 410
Figure 26: Foundation accounts 411
Figure 27: Hawala 443

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Abbreviations
AEOI
AICPA
AIM
AML
BEPS
BRICS
CAAs
CEO
CIA
CPI
CRS
DoJ
DTA
EBT
EEC
EU
FATCA
FATF
FBAR
FFI
Fis
GDP
HMRC
HSBC
ICIJ
IGA
IRS
KYC
M&S
MCAA
NFE
NNM
OECD
PTCs
PwC
SEC
SWIFT
TCSPs
TIEA
TIN
UAE
UBS
UK
UNCTAD
Automatic Exchange of Information
American Institute of Certified Public Accountants
Alternative Investment Market
Anti-Money Laundering
Base Erosion and Profit Shifting
Brazil, Russia, India, China, South Africa
Competent Authority Agreements
Chief Executive Officer
Central Intelligence Agency
Corruption Perceptions Index
Common Reporting Standard
Department of Justice
Double Tax Agreement
Employee Benefit Trust
European Economic Community
European Union
Foreign Account Tax Compliance Act
Financial Action Task Force
Report of Foreign Bank and Financial Accounts
Foreign Financial Institution
Financial Institutions
Gross Domestic Product
HM Revenue & Customs
Hong Kong and Shanghai Banking Corporation
International Consortium of Investigative Journalists
Intergovernmental Agreement
Internal Revenue Service
Know Your Customer
Marks & Spencer
Multilateral Competent Authority Agreement
Non-Financial Entity
Net New Money
Organisation for Economic Co-operation and Development
Private trust companies
PricewaterhouseCoopers
Securities and Exchange Commission
Society for Worldwide Interbank Financial Telecommunication
Trust and corporate services providers
Tax Information Exchange Agreement
Tax Identification Number
United Arab Emirates
Union Bank of Switzerland
United Kingdom
United Nations Conference on Trade and Development


31
US/USA
VAT
United States of America
Value Added Tax