OECD Report suggests compliance regime elements for FIs and Stakeholders
Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS) stakeholders are key to financial institutions’ (FIs) successful implementation, compliance, and maintenance efforts. These activities require funding, monitoring and approval.
A pilot group of tax administrations of Canada, Singapore, the United Kingdom and the USA (US) worked jointly to issue a report explaining what might constitute a “robust” compliance regime for FI’s and their key stakeholders
Guide on Promoting and Assessing Compliance by Financial Institutions (the Guide) was published by the Organization for Economic Co-operation and Development’s (OECD) Forum on Tax Administration. The report is intended to assist tax administration government officials with their obligations for monitoring and ensuring FI’s FATCA and CRS reporting obligations.
The Guide recommends that FIs have a written or documented project plan in place involving key stakeholders within the FI.
Stakeholders with FATCA and CRS monitoring of FIs’ reporting obligations may include:
- Tax Department
- Operations Departments (departments responsible for payments, submission of documentation to tax authorities)
- Legal Counsel
- Department responsible for Information Reporting & Withholding (FATCA)
- Key Departmental roles (President, Vice President, Senior Officers, and Managing Directors (COO, CFO, CEO)
- Subject Matter Experts (SME)
- Responsible Officer(s) (RO) for FATCA
- External Service Providers
Stakeholders, the Guide maintains, should take an active role in:
- Assessing the implementation and ongoing activities related to the FI’s FTCA and CRS compliance obligations
- Holding periodic meetings in person, virtually or by phone to discuss implementation and ongoing compliance activities including on-boarding, withholding (for FATCA), reporting, self-certifications and due diligence
- Examining challenges and items that may need to be escalated
Questions for stakeholders suggested by the Guide include:
- Has the FI identified its FATCA and CRS stakeholders?
- Is there active participation of the FI stakeholders to ensure ongoing compliance with FATCA and CRS?
- Does the FI have periodic established meetings to discuss FATCA and CRS compliance?
- Does the FI have an escalation process for raising ad-hoc internal or client matters pertaining to FATCA and CRS?
- Can the FI provide documentation of its collaboration with internal stakeholders for initial FATCA and CRS implementation, such as internal meeting minutes and correspondence noting key implementation decisions?
- Can the FI describe its FATCA and CRS implementation process beyond the provided documentation and/or in lieu of documentation?
- Can the FI provide documentation of its collaboration with internal stakeholders for its ongoing FATCA and CRS compliance obligations, such as internal meeting minutes, documentation indicating the assignment of responsibilities, including the Responsible Officer for FATCA purposes?
Making sure these questions can be answered thoroughly can make the difference between compliance and the consequences of non-compliance.