Insurance Authority Board of Directors Decision No. (32) of 2017 Concerning the Common Reporting Standard Regulations

The Chairman of the Insurance Authority,

• Having pursued, The Federal Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority and Organization of its Operations, and the amendments thereof;
• The Insurance Authority Board of Directors Decision No. (2) of 2009 Concerning the Issuance of the Executive Regulations of the Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority and Organization of its Operations, and the amendments thereof;
• The Convention on Mutual Administrative Assistance in Tax Matter entered by the UAE on 21 April 2017;
• The Declaration on Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information signed on 22 February 2017;
• The Cabinet Resolution (9) of 2016, concerning the commitment of the State to sign International Multilateral agreement and Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information.
• The Insurance Authority Board of Directors Decision No. (25) of 2014 Concerning the Financial Regulations for Insurance Companies;
• The Insurance Authority Board of Directors Decision No. (26) of 2014 concerning the Financial Regulations for Takaful Insurance Companies;
• Based on the recommendation of the Director General of the Insurance Authority and the approval of the Board of Directors,

Has resolved,

---

Definitions

Article (1)

For the purposes of these Regulations; any term not otherwise defined in the Regulations or in the Common Reporting Standard will, unless the context otherwise requires or the UAE Competent Authority agreed to a common meaning pursuant to any treaty or competent authority agreement (as permitted by domestic law), have the meaning that it has at that time under the applicable laws of the UAE.

• State: The United Arab Emirates.
• Law: Federal Law No. (6) of 2007 on the Establishment of the Insurance Authority and Organization of its Operations and the amendments thereof.
• Executive Regulations: The Executive Regulations of the Law.
• Authority/IA: The Insurance Authority.
• Board: The Board of Directors of the IA.
• Director General: The Director General of the IA.
• Company: An insurance company established in the State, and the foreign insurance company licensed to carry out insurance activities in the State, either through a branch or an Insurance Agent; including Takaful insurance companies that carry out the insurance of persons and the formation of funds and which issues or is obligated to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract.
• The Agreement: The Convention on Mutual Administrative Assistance in Tax Matter entered by the UAE on 21 February 2017.
• UAE Competent Authority: The Ministry of Finance, established pursuant to Federal Law No. 1 of 1972.
• Common Reporting Standard : The standard for automatic exchange of financial account information developed by the Organisation for Economic Co-Operation and Development as amended from time to time by the Organisation for Economic Co-operation and Development, set out in Schedule 1.
• Organisation for Economic Co-Operation and Development: the Organisation for Economic Co-Operation and Development which was established by the Convention on the Organisation for Economic Co-operation and Development signed in Paris on 14th December, 1960.

---

General provisions

Article (2)

1. For the purposes of these Regulations the Common Reporting Standard commentary, which is any explanatory material made and published by the Organisation for Economic Co-Operation and Development for the purpose of assisting with the interpretation of the Common Reporting Standard, is an integral part of the Common Reporting Standard and accordingly applies for the purposes of the automatic exchange of financial account information under a relevant scheduled Agreement.

2. These Regulations apply to:

   • A- any Reporting Financial Institution subject to the supervision of the Authority for purposes of these Regulations;
   • B- any Account Holder (Policy holder) of a Reportable Account held with a Reporting Financial Institution subject to the supervision of the Authority for purposes of these Regulations; and
   • C- any other person to whom the Regulations apply.

3. The English version pursuant to the international model approved by the Organisation for Economic Co-operation and Development shall supersede in case of any contradiction with the Arabic translation.

Article (3)

1. The Authority may request information from and, at all reasonable times, enter any premises or place of business of a Reporting Financial Institution for the purposes of:

   • a- determining whether information included in an information return made under these Regulations by the institution is correct and complete, or
   • b. determining whether information not included in the information return made under these Regulations was not included correctly; or
   • c. examining the procedures put in place by a Reporting Financial Institution for the purposes of ensuring compliance with that Reporting Financial Institution’s obligations under these Regulations.

2. The Authority may, by notice in writing, require a Reporting Financial Institution to give the Authority within such time, not being less than fourteen (14) days, as may be provided by the notice, with such information (including copies of any relevant books, records or other

---

Article (3) (Continued)

documents) as the Authority officer may reasonably require for any purpose relating to the administration or enforcement of these Regulations.

3. The Authority may require a Reporting Financial Institution to produce books, records or other documentation; to provide information, explanations and particulars; and to give all assistance which the Authority may reasonably relating to the administration or enforcement of these Regulations.

4. The Authority may request information from any Account Holder that has a Reportable Account held with a Reporting Financial Institution subject to the supervision of the Authority for purposes of these Regulations, inclusive of (but not limited to) all records held in connection with the information or certifications provided to the Reporting Financial Institution pursuant to these Regulations, and the Authority may ask a Reporting Financial Institution to assist it to obtain such information or records from Account Holders.

5. Every Reporting Financial Institution shall keep records of the steps undertaken and any evidence relied upon for the performance of the due diligence procedures and measures to obtain those records that the Reporting Financial Institution obtains or creates for the purpose of complying with these Regulations.

6- Every Reporting Financial Institution required by these Regulations to keep records that does so electronically shall retain them in an electronically readable format for the retention period of five (5) years after the date of reporting to the Authority as per Schedule 1, Section I, Paragraph F.

7- Every Reporting Financial Institution that obtains or creates records, as required under these Regulations, in a language other than English shall, upon request, provide an English translation to the Authority.

8- Under these Regulations, every Reporting Financial Institution is required to file their information returns electronically with the Authority.

9- Every Reporting Financial Institution required to report certain information by these Regulations, shall file such information electronically using such technology as may be approved or provided by the Authority, and in such form as the Authority may require.

Article (4)

Every Reporting Financial Institution that is required to keep, obtain or create records under these Regulations shall retain those records for a period of at least five (5) years after the date of reporting to the Authority as per Schedule 1, Section I, Paragraph F.

---

Article (5)

The board shall impose the following penalties on every Reporting Financial Institution which fails to comply with a duty or obligation imposed by these Regulations, and according to the following:

1- where a Reporting Financial Institution signs or otherwise positively affirms a false self-certification, to a penalty of twenty five thousand dirham (AED 25,000);

2- where a Reporting Financial Institution fails to retain the documentation and information it collected in the course of meeting its reporting and due diligence obligations for a minimum period of five years after the date of reporting to the Authority as per Schedule 1, Section I, Paragraph F., to a penalty of ten thousand dirham (AED 10,000);

3- where a Reporting Financial Institution fails to apply the due diligence procedures specified in Schedule 1, Section II through to Section VII to these Regulations to a penalty of twenty five thousand dirham (AED 25,000);

4- where a Reporting Financial Institution fails to report the information required to be reported in terms of these Regulation to a penalty of:

• A- Ten thousand dirham (AED 10,000); and
• B- five hundred dirham (AED 500) for every day during which the failure continues: provided that this penalty shall not exceed in total hundred thousand dirham (AED 100,000);

5- where a Reporting Financial Institution fails to report the information required to be reported in terms of these Regulation in a complete and accurate manner, to a penalty of:

• A- in the case of minor errors -
  1. thousand dirham (AED 1,000); and
  2. hundred dirham (AED 100) for every day during which failure continues: provided that this penalty shall not exceed in total twenty five thousand dirham (AED 25,000);
• B- in the case of significant non-compliance, a penalty of two hundred fifty thousand dirham (AED 250,000);

6- Where, notwithstanding any action taken by the Authority under these Regulations, the penalties remain outstanding or the default in respect of which such penalties have been imposed continues to subsist, as the case may be, the Authority may serve further default notices in accordance with these Regulations on the said Reporting Financial Institution imposing with each successive notice double the amount of the said penalties, provided that such penalties shall not

---

Article (5) (Continued)

exceed in total two hundred fifty thousand dirham (AED 250,000) in respect of each specific default; Provided that each such successive note shall supersede the previous notice served on the Reporting Financial Institution for the same default but any payment made in respect of that previous notice shall be taken into account accordingly.

Article (6)

The Authority, or its delegate, may order certain actions that Reporting Financial Institutions must take subsequent to a contravention of these Regulations.

Article (7)

1. Liability to a penalty under article (5) does not arise if the Reporting Financial Institution satisfies the Authority that there is a reasonable excuse for the failure;

2. Neither of the following is a reasonable excuse:

   • a. that there is an insufficiency of funds to do something, or
   • b. that a person relies upon another person to do something.

3. If a Reporting Financial Institution had a reasonable excuse for a failure but the excuse has ceased, the Reporting Financial Institution is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Article (8)

1. If a Reporting Financial Institution becomes liable to a penalty under article (5), the Authority shall:

   • a. assess the penalty, and
   • b. notify the Reporting Financial Institution of the assessment.

2. An assessment of a penalty under article (5) shall be made within the period of twelve (12) months beginning with the date on which

   • a. the Reporting Financial Institution became liable to the penalty, or
   • b. the inaccuracy first came to the attention of the Authority.

---

Article (8) (Continued)

3. A Reporting Financial Institution may appeal against a penalty assessment

   • a. on the grounds that liability to a penalty under article (5) does not arise, or
   • b. as to the amount of such a penalty.

4. Notice of an appeal under section (3) of this article shall

   • a. be provided to the Board, in writing, before the end of the period thirty (30) calendar days beginning with the date on which notification section (1) of this article was provided, and
   • b. set out the grounds of appeal.

5. On an appeal under section (4) of this article that is notified to the Authority, the Board may confirm or cancel the assessment.

6. On appeal under section (4) of this article that is notified to the Authority, the Board may confirm the assessment or substitute another assessment that the Authority had power to make.

7. The Authority shall have a maximum of sixty (60) calendar days in which to consider the appeal. If the Authority fails to give written notice of its decision for the appeal, then the appeal will be deemed to have been successful.

8. A penalty under article (5) of these Regulations shall be paid to the Authority within thirty (30) calendar days after

   • a. the date on which notification under section (1) of this article is provided in respect of the penalty, or
   • b. the date on which an appeal against a penalty assessment pursuant to Subarticle (2) of this article is finally determined or withdrawn.

Article (9)

1. If a Reporting Financial Institution, person or intermediary enters into any arrangements or engages in a practice, the main purpose or one of the main purposes, of which can reasonably be considered to be to avoid an obligation imposed under these Regulations thereunder, the Reporting Financial Institution, person or intermediary is subject to the obligation as if the Reporting Financial Institution, person or intermediary had not entered into the arrangement or engaged in the practice.

2. Unless it can be shown that it was done in bad faith, neither the Authority, its delegate, nor any Authority officer can be held liable for any act, attempted act or omission in the performance, purported non-performance or non-performance of its functions in connection with these Regulations.

---

Article (10)

1. These Regulations shall be published in the Official Gazette and shall come into force in the day following the date of publication thereof, except in respect of the following where they shall apply retrospectively:

2. in respect of Pre-existing Accounts that are subject to due diligence requirements under the Regulations, the effective date for purposes of these Regulations is 31 December, 2016; and

3. in respect of New Accounts that are subject to due diligence requirements under the Regulations, the effective date for purposes of these Regulations is 1 January, 2017.

Eng.Sultan bin saeed Al Mansouri
Minister Of Economy
Chairman of the Board of the Insurance Authority

Issued in Abu Dhabi on: 17 / 9 /2017

---

SCHEDULE 1

AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION REGULATIONS

SECTION I

GENERAL REPORTING REQUIREMENTS

A. Subject to paragraphs C through E, each Reporting Financial Institution must collect and report to the UAE Competent Authority the following information with respect to each Reportable Account of such Reporting Financial Institution:

1. the name, address, jurisdiction(s) of residence, TIN(s) and date and place of birth (in the case of an individual) of each Reportable Person that is an Account Holder of the account and, in the case of any Entity that is an Account Holder and that, after application of the due diligence procedures consistent with Sections V, VI and VII, is identified as having one or more Controlling Persons that is a Reportable Person, the name, address, jurisdiction(s) of residence and TIN(s) of the Entity and the name, address, jurisdiction(s) of residence, TIN(s) and date and place of birth of each Reportable Person;

2. the account number\ insurance contract (or functional equivalent in the absence of an account number);

3. the name and identifying number (if any) of the Reporting Financial Institution;

4. the account balance or value (including, in the case of a Cash Value Insurance Contract or Annuity Contract, the Cash Value or surrender value) as of the end of the relevant calendar year or, if the account was closed during such year, the closure of the account;

5. in the case of any Custodial Account:

   • (a) the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year; and
   • (b) the total gross proceeds from the sale or redemption of Financial Assets paid or credited to the account during the calendar year with respect to which the Reporting Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder;

6. in the case of any Depository Account, the total gross amount of interest paid or credited to the account during the calendar year; and

---

SCHEDULE 1 (Continued)

7. in the case of any account not described in subparagraph A(5) or (6), the total gross amount paid or credited to the Account Holder with respect to the account during the calendar year with respect to which the Reporting Financial Institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the Account Holder during the calendar year.

B. The information reported must identify the currency in which each amount is denominated.

C. Notwithstanding subparagraph A(1), with respect to each Reportable Account that is a Pre-existing Account or with respect to each Financial Account that is opened prior to becoming a Reportable Account, the TIN(s) or date of birth is not required to be reported if such TIN(s) or date of birth is not in the records of the Reporting Financial Institution and is not otherwise required to be collected by such Reporting Financial Institution under domestic law. However, a Reporting Financial Institution is required to use reasonable efforts to obtain the TIN(s) and date of birth with respect to Pre-existing Accounts by the end of the second calendar year following the year in which Pre-existing Accounts were identified as Reportable Accounts.

D. Notwithstanding subparagraph A(1), the TIN is not required to be reported if (i) a TIN is not issued by the relevant Reportable Jurisdiction or (ii) the domestic law of the relevant Reportable Jurisdiction does not require the collection of the TIN issued by such Jurisdiction.

E. Notwithstanding subparagraph A(1), the place of birth is not required to be reported unless the Reporting Financial Institution is otherwise required to obtain and report it under domestic law and it is available in the electronically searchable data maintained by the Reporting Financial Institution.

F. Each Reporting Financial Institution must file an information return with the Regulatory Authority containing the information described in paragraph A on or before 30th June of the year following the calendar year to which the return relates.

G. If a Reporting Financial Institution applies the due diligence procedures described in Sections V, VI and VII for a calendar year and no Financial Account is identified as a Reportable Account, the institution shall file an information return, which provides that the institution maintains no such Reportable Accounts in respect of that year, with the Regulatory Authority on or before 30th June of the year following the calendar year to which the return relates.

---

SECTION II

GENERAL DUE DILIGENCE REQUIREMENTS

A. A Reporting Financial Institution must establish, maintain and document the due diligence procedures set out in Sections II through VII that are designed to identify Reportable Accounts maintained by the institution.

B. An account is treated as a Reportable Account beginning as of the date it is identified as such pursuant to the due diligence procedures in Sections II through VII and, unless otherwise provided, information with respect to a Reportable Account must be reported annually in the calendar year following the year to which the information relates.

C. The balance or value of an account is determined as of the last day of the calendar year.

D. Where a balance or value threshold is to be determined as of the last day of a calendar year, the relevant balance or value must be determined as of the last day of the reporting period that ends with or within that calendar year.

E. A Reporting Financial Institutions may use a service provider to fulfil the reporting and due diligence obligations imposed on such institution, but these obligations shall remain the responsibility of the Reporting Financial Institutions.

F. A Reporting Financial Institutions may apply

• (a) the due diligence procedures for New Accounts to all Pre-existing Accounts or with respect to any clearly identified group of Pre-existing Accounts, and the rules otherwise applicable to Pre-existing Accounts continue to apply; and
• (b) the due diligence procedures for High Value Accounts to Lower Value Accounts.

SECTION III

DUE DILIGENCE FOR PRE-EXISTING INDIVIDUAL ACCOUNTS

The following procedures apply with respect to Pre-existing Individual Accounts.

A. Accounts Not Required to be Reviewed, Identified, or Reported. A Pre-existing Individual Account that is a Cash Value Insurance Contract or an Annuity Contract is not required to be reviewed, identified or reported, provided the Reporting Financial Institution is effectively prevented by law from selling such Contracts to residents of a Reportable Jurisdiction.

B. Lower Value Accounts. The following procedures apply with respect to Lower Value Accounts.

---

SECTION III (Continued)

1. Residence Address. If the Reporting Financial Institution has in its records a current residence address for the individual Account Holder based on Documentary Evidence, the Reporting Financial Institution may treat the individual Account Holder as being a resident for tax purposes of the jurisdiction in which the address is located for purposes of determining whether such individual Account Holder is a Reportable Person.

2. Electronic Record Search. If the Reporting Financial Institution does not rely on a current residence address for the individual Account Holder based on Documentary Evidence as set forth in subparagraph B(1), the Reporting Financial Institution must review electronically searchable data maintained by the Reporting Financial Institution for any of the following indicia and apply subparagraphs B(3) to (6):

   • (a) identification of the Account Holder as a resident of a Reportable Jurisdiction;
   • (b) current mailing or residence address (including a post office box) in a Reportable Jurisdiction;
   • (c) one or more telephone numbers in a Reportable Jurisdiction and no telephone number in the jurisdiction of the Reporting Financial Institution;
   • (d) standing instructions (other than with respect to a Depository Account) to transfer funds to an account maintained in a Reportable Jurisdiction;
   • (e) currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction; or
   • (f) a “hold mail” instruction or “in-care-of” address in a Reportable Jurisdiction if the Reporting Financial Institution does not have any other address on file for the Account Holder.

3. If none of the indicia listed in subparagraph B(2) are discovered in the electronic search, then no further action is required until there is a change in circumstances that results in one or more indicia being associated with the account, or the account becomes a High Value Account.

4. If any of the indicia listed in subparagraph B(2)(a) through (e) are discovered in the electronic search, or if there is a change in circumstances that results in one or more indicia being associated with the account, then the Reporting Financial Institution must treat the Account Holder as a resident for tax purposes of each Reportable Jurisdiction for which an indicium is identified, unless it elects to apply subparagraph B(6) and one of the exceptions in that subparagraph applies with respect to that account.

5. If a “hold mail” instruction or “in-care-of” address is discovered in the electronic search and no other address and none of the other indicia listed in subparagraph B(2)(a) through (e) are identified for the Account Holder, the Reporting Financial Institution must, in the order most appropriate to the circumstances, apply the paper record search described in subparagraph C(2), or seek to obtain from the Account Holder a self-certification or Documentary Evidence

---

SECTION III (Continued)

to establish the residence(s) for tax purposes of such Account Holder. If the paper search fails to establish an indicium and the attempt to obtain the self-certification or Documentary Evidence is not successful, the Reporting Financial Institution must report the account as an undocumented account to the UAE Competent Authority.

6. Notwithstanding a finding of indicia under subparagraph B(2), a Reporting Financial Institution is not required to treat an Account Holder as a resident of a Reportable Jurisdiction if:
   • (a) the Account Holder information contains a current mailing or residence address in the Reportable Jurisdiction, one or more telephone numbers in the Reportable Jurisdiction (and no telephone number in the jurisdiction of the Reporting Financial Institution) or standing instructions (with respect to Financial Accounts other than Depository Accounts) to transfer funds to an account maintained in a Reportable Jurisdiction, and the Reporting Financial Institution obtains, or has previously reviewed and maintains, a record of:
     • (i) a self-certification from the Account Holder of the jurisdiction(s) of residence of such Account Holder that does not include such Reportable Jurisdiction; and
     • (ii) Documentary Evidence establishing the Account Holder’s residence for tax purposes other than such Reportable Jurisdiction;
   • (b) the Account Holder information contains a currently effective power of attorney or signatory authority granted to a person with an address in the Reportable Jurisdiction, and the Reporting Financial Institution obtains, or has previously reviewed and maintains, a record of:
     • (i) a self-certification from the Account Holder of the jurisdiction(s) of residence of such Account Holder that does not include such Reportable Jurisdiction; or
     • (ii) Documentary Evidence establishing the Account Holder’s residence for tax purposes other than such Reportable Jurisdiction.

C. Enhanced Review Procedures for High Value Accounts. The following enhanced review procedures apply with respect to High Value Accounts.

1. Electronic Record Search. With respect to High Value Accounts, the Reporting Financial Institution must review electronically searchable data maintained by the Reporting Financial Institution for any of the indicia described in subparagraph B(2).

2. Paper Record Search. If the Reporting Financial Institution’s electronically searchable databases include fields for, and capture all of the information described in, subparagraph C(3), then a further paper record search is not required. If the electronic databases do not capture all of this information, then with respect to a High Value Account, the Reporting Financial Institution must also review the current customer master file and, to the extent not contained in the current customer master file, the following documents associated with

---

SECTION III (Continued)

the account and obtained by the Reporting Financial Institution within the last five years for any of the indicia described in subparagraph B(2):

• (a) the most recent Documentary Evidence collected with respect to the account;
• (b) the most recent account opening contract or documentation;
• (c) the most recent documentation obtained by the Reporting Financial Institution pursuant to AML/KYC Procedures or for other regulatory purposes;
• (d) any power of attorney or signature authority forms currently in effect; and
• (e) any standing instructions (other than with respect to a Depository Account) to transfer funds currently in effect.

3. Exception To The Extent Databases Contain Sufficient Information. A Reporting Financial Institution is not required to perform the paper record search described in subparagraph C(2) to the extent the Reporting Financial Institution’s electronically searchable information includes the following:

   • (a) the Account Holder’s residence status;
   • (b) the Account Holder’s residence address and mailing address currently on file with the Reporting Financial Institution;
   • (c) the Account Holder’s telephone number(s) currently on file, if any, with the Reporting Financial Institution;
   • (d) in the case of Financial Accounts other than Depository Accounts, whether there are standing instructions to transfer funds in the account to another account (including an account at another branch of the Reporting Financial Institution or another Financial Institution);
   • (e) whether there is a current “in-care-of” address or “hold mail” instruction for the Account Holder; and
   • (f) whether there is any power of attorney or signatory authority for the account.

4. Relationship Manager Inquiry for Actual Knowledge. In addition to the electronic and paper record searches described in subparagraphs C(1) and (2), the Reporting Financial Institution must treat as a Reportable Account any High Value Account assigned to a relationship manager (including any Financial Accounts aggregated with that High Value Account) if the relationship manager has actual knowledge that the account is held by a resident for tax purposes in a Reportable Jurisdiction.

5. Effect of Finding Indicia.

   • (a) If none of the indicia listed in subparagraph B(2) are discovered in the enhanced review of High Value Accounts described in paragraph C, and the account is not identified as held by a resident for tax purposes in a Reportable Jurisdiction in subparagraph C(4), then further action is not required until there is a change in circumstances that results in one or more indicia being associated with the account.

---

SECTION III (Continued)

(b) If any of the indicia listed in subparagraphs B(2)(a) through (e) are discovered in the enhanced review of High Value Accounts described in paragraph C, or if there is a subsequent change in circumstances that results in one or more indicia being associated with the account, then the Reporting Financial Institution must treat the Account Holder as a resident for tax purposes of each Reportable Jurisdiction for which an indicium is identified unless it elects to apply subparagraph B(6) and one of the exceptions in that subparagraph applies with respect to that account.

(c) If a “hold mail” instruction or “in-care-of” address is discovered in the enhanced review of High Value Accounts described in paragraph C, and no other address and none of the other indicia listed in subparagraphs B(2)(a) through (e) are identified for the Account Holder, the Reporting Financial Institution must obtain from such Account Holder a self-certification or Documentary Evidence to establish the residence(s) for tax purposes of the Account Holder. If the Reporting Financial Institution cannot obtain such self-certification or Documentary Evidence, it must report the account as an undocumented account to the UAE Competent Authority.

6. If a Pre-existing Individual Account is not a High Value Account as of 31 December 2016, but becomes a High Value Account as of the last day of a subsequent calendar year, the Reporting Financial Institution must complete the enhanced review procedures described in paragraph C with respect to such account within the calendar year following the year in which the account becomes a High Value Account. If based on this review such account is identified as a Reportable Account, the Reporting Financial Institution must report the required information about such account with respect to the year in which it is identified as a Reportable Account and subsequent years on an annual basis, unless the Account Holder ceases to be a Reportable Person.

7. Once a Reporting Financial Institution applies the enhanced review procedures described in paragraph C to a High Value Account, the Reporting Financial Institution is not required to re-apply such procedures, other than the relationship manager inquiry described in subparagraph C(4), to the same High Value Account in any subsequent year unless the account is undocumented where the Reporting Financial Institution should re-apply them annually until such account ceases to be undocumented.

8. If there is a change of circumstances with respect to a High Value Account that results in one or more indicia described in subparagraph B(2) being associated with the account, then the Reporting Financial Institution must treat the account as a Reportable Account with respect to each Reportable Jurisdiction for which an indicium is identified unless it elects to apply subparagraph B(6) and one of the exceptions in that subparagraph applies with respect to that account.

---

SECTION III (Continued)

9. A Reporting Financial Institution must implement procedures to ensure that a relationship manager identifies any change in circumstances of an account. For example, if a relationship manager is notified that the Account Holder has a new mailing address in a Reportable Jurisdiction, the Reporting Financial Institution is required to treat the new address as a change in circumstances and, if it elects to apply subparagraph B(6), is required to obtain the appropriate documentation from the Account Holder.

D. Review of Pre-existing High Value Individual Accounts must be completed by 31 December 2017 and review of Pre-existing Lower Value Individual Accounts must be completed by 31 December 2018.

E. Any Pre-existing Individual Account that has been identified as a Reportable Account under this Section must be treated as a Reportable Account in all subsequent years, unless the Account Holder ceases to be a Reportable Person.

SECTION IV

DUE DILIGENCE FOR NEW INDIVIDUAL ACCOUNTS

The following procedures apply with respect to New Individual Accounts.

A. With respect to New Individual Accounts, upon account opening, the Reporting Financial Institution must obtain a self-certification, which may be part of the account opening documentation, that allows the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and confirm the reasonableness of such self-certification based on the information obtained by the Reporting Financial Institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

B. If the self-certification establishes that the Account Holder is resident for tax purposes in a Reportable Jurisdiction, the Reporting Financial Institution must treat the account as a Reportable Account and the self-certification must also include the Account Holder’s TIN with respect to such Reportable Jurisdiction (subject to paragraph D of Section I) and date of birth.

C. If there is a change of circumstances with respect to a New Individual Account that causes the Reporting Financial Institution to know, or have reason to know, that the original self-certification is incorrect or unreliable, the Reporting Financial Institution cannot rely on the original self-certification and must obtain a valid self-certification that establishes the residence(s) for tax purposes of the Account Holder.

---

SECTION V

DUE DILIGENCE FOR PRE-EXISTING ENTITY ACCOUNTS

The following procedures apply with respect to Pre-existing Entity Accounts.

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. Unless the Reporting Financial Institution elects otherwise, either with respect to all Pre-existing Entity Accounts or, separately, with respect to any clearly identified group of such accounts, a Pre-existing Entity Account with an aggregate account balance or value that does not exceed USD 250 000 as of 31 December 2016 is not required to be reviewed, identified, or reported as a Reportable Account until the aggregate account balance or value exceeds that amount as of the last day of any subsequent calendar year.

B. Entity Accounts Subject to Review. A Pre-existing Entity Account that has an aggregate account balance or value that exceeds USD 250 000 as of 31 December 2016, and a Pre-existing Entity Account that does not exceed USD 250 000 as of 31 December 2016 but the aggregate account balance or value of which exceeds USD 250 000 as of the last day of any subsequent calendar year, must be reviewed in accordance with the procedures set forth in paragraph D.

C. Review Procedures for Identifying Entity Accounts With Respect to Which Reporting Is Required. For Pre-existing Entity Accounts described in paragraph B, a Reporting Financial Institution must apply the following review procedures:

1. Determine the Residence of the Entity.

   • (a) Review information maintained for regulatory or customer relationship purposes (including information collected pursuant to AML/KYC Procedures) to determine the Account Holder’s residence. For this purpose, information indicating that the Account Holder’s residence includes a place of incorporation or organisation, or an address in a Reportable Jurisdiction.
   • (b) If the information indicates that the Account Holder is a Reportable Person, the Reporting Financial Institution must treat the account as a Reportable Account unless it obtains a self-certification from the Account Holder, or reasonably determines based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person.

2. Determine the Residence of the Controlling Persons of a Passive NFE. With respect to an Account Holder of a Pre-existing Entity Account (including an Entity that is a Reportable Person), the Reporting Financial Institution must determine whether the Account Holder is a Passive NFE with one or more Controlling Persons and determine the residence of such

---

SECTION V (Continued)

Controlling Persons. If any of the Controlling Persons of a Passive NFE is a Reportable Person, then the account must be treated as a Reportable Account. In making these determinations the Reporting Financial Institution must follow the guidance in subparagraphs C(2)(a) through (c) in the order most appropriate under the circumstances.

• (a) Determining whether the Account Holder is a Passive NFE. For purposes of determining whether the Account Holder is a Passive NFE, the Reporting Financial Institution must obtain a self-certification from the Account Holder to establish its status, unless it has information in its possession or that is publicly available, based on which it can reasonably determine that the Account Holder is an Active NFE or a Financial Institution other than an Investment Entity described in subparagraph A(6)(b) of Section VIII that is not a Participating Jurisdiction Financial Institution.
• (b) Determining the Controlling Persons of an Account Holder. For the purposes of determining the Controlling Persons of an Account Holder, a Reporting Financial Institution may rely on information collected and maintained pursuant to AML/KYC Procedures.
• (c) Determining the residence of a Controlling Person of a Passive NFE. For the purposes of determining the residence of a Controlling Person of a Passive NFE, a Reporting Financial Institution may rely on:
  • (i) information collected and maintained pursuant to AML/KYC Procedures in the case of a Pre-existing Entity Account held by one or more NFEs with an aggregate account balance or value that does not exceed USD 1 000 000; or
  • (ii) a self-certification from the Account Holder or such Controlling Person of the jurisdiction(s) in which the controlling person is resident for tax purposes. If a self-certification is not provided, the Reporting Financial Institution will establish such residence(s) by applying the procedures described in paragraph C of Section III.

D. Timing of Review and Additional Procedures Applicable to Pre-existing Entity Accounts.

1. Review of Pre-existing Entity Accounts with an aggregate account balance or value that exceeds USD 250 000 as of 31 December 2016, must be completed by 31 December 2018.
2. Review of Pre-existing Entity Accounts with an aggregate account balance or value that does not exceed USD 250 000 as of 31 December 2016, but exceeds USD 250 000 as of 31 December of a subsequent year, must be completed within the calendar year following the year in which the aggregate account balance or value exceeds USD 250 000.
3. If there is a change of circumstances with respect to a Pre-existing Entity Account that causes the Reporting Financial Institution to know, or have reason to know, that the self-certification or other documentation associated with an account is incorrect or unreliable, the Reporting

---

SECTION VI

DUE DILIGENCE FOR NEW ENTITY ACCOUNTS

The following procedures apply with respect to New Entity Accounts.

A. Review Procedures for Identifying Entity Accounts With Respect to Which Reporting Is Required. For New Entity Accounts, a Reporting Financial Institution must apply the following review procedures:

1. Determine the Residence of the Entity.

   • (a) Obtain a self-certification, which may be part of the account opening documentation, that allows the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and confirm the reasonableness of such self-certification based on the information obtained by the Reporting Financial Institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures. If the Entity certifies that it has no residence for tax purposes, the Reporting Financial Institution may rely on the address of the principal office of the Entity to determine the residence of the Account Holder.
   • (b) If the self-certification indicates that the Account Holder is resident in a Reportable Jurisdiction, the Reporting Financial Institution must treat the account as a Reportable Account, unless it reasonably determines based on information in its possession or that is publicly available that the Account Holder is not a Reportable Person with respect to such Reportable Jurisdiction.

2. Determine the Residence of the Controlling Persons of a Passive NFE. With respect to an Account Holder of a New Entity Account (including an Entity that is a Reportable Person), the Reporting Financial Institution must determine whether the Account Holder is a Passive NFE with one or more Controlling Persons and determine the residence of such Reportable Persons. If any of the Controlling Persons of a Passive NFE is a Reportable Person, then the account must be treated as a Reportable Account. In making these determinations the Reporting Financial Institution must follow the guidance in subparagraphs A(2)(a) through (c) in the order most appropriate under the circumstances.

   • (a) Determining whether the Account Holder is a Passive NFE. For purposes of determining whether the Account Holder is a Passive NFE, the Reporting Financial Institution must rely on a self-certification from the Account Holder to establish its status, unless it has information in its possession or that is publicly available, based on which it can

---

SECTION VI (Continued)

reasonably determine that the Account Holder is an Active NFE or a Financial Institution other than an Investment Entity described in subparagraph A(6)(b) of Section VIII that is not a Participating Jurisdiction Financial Institution.

• (b) Determining the Controlling Persons of an Account Holder. For purposes of determining the Controlling Persons of an Account Holder, a Reporting Financial Institution may rely on information collected and maintained pursuant to AML/KYC Procedures.
• (c) Determining the residence of a Controlling Person of a Passive NFE. For purposes of determining the residence of a Controlling Person of a Passive NFE, a Reporting Financial Institution may rely on a self-certification from the Account Holder or such Controlling Person.

SECTION VII

SPECIAL DUE DILIGENCE RULES

The following additional rules apply in implementing the due diligence procedures described above:

A. Reliance on Self-Certifications and Documentary Evidence. A Reporting Financial Institution may not rely on a self-certification or Documentary Evidence if the Reporting Financial Institution knows or has reason to know that the self-certification or Documentary Evidence is incorrect or unreliable.

B. Alternative Procedures for Financial Accounts held by Individual Beneficiaries of a Cash Value Insurance Contract or an Annuity Contract and for a Group Cash Value Insurance Contract or Group Annuity Contract. A Reporting Financial Institution may presume that an individual beneficiary (other than the owner) of a Cash Value Insurance Contract or an Annuity Contract receiving a death benefit is not a Reportable Person and may treat such Financial Account as other than a Reportable Account unless the Reporting Financial Institution has actual knowledge, or reason to know, that the beneficiary is a Reportable Person. A Reporting Financial Institution has reason to know that a beneficiary of a Cash Value Insurance Contract or an Annuity Contract is a Reportable Person if the information collected by the Reporting Financial Institution and associated with the beneficiary contains indicia as described in paragraph B of Section III. If a Reporting Financial Institution has actual knowledge, or reason to know, that the beneficiary is a Reportable Person, the Reporting Financial Institution must follow the procedures in paragraph B of Section III.

A Reporting Financial Institution may treat a Financial Account that is a member’s interest in a Group Cash Value Insurance Contract or Group Annuity Contract as a Financial Account that is