Normative Instruction RFB No. 1,680 of December 28, 2016 — Identification of Financial Accounts in Compliance with the Common Reporting Standard (CRS)

Published in the Official Gazette of the Union on 12/29/2016, Section 1, page 648. Provides for the identification of financial accounts in compliance with the Common Reporting Standard (CRS).

The SECRETARY OF THE FEDERAL REVENUE OF BRAZIL, using the authority granted by item III of Article 280 of the Internal Regulations of the Federal Revenue Secretariat, approved by MF Ordinance No. 203 of May 14, 2012, and considering the provisions of Legislative Decree No. 105 of April 14, 2016, Decree No. 8,842 of August 29, 2016, and the Multilateral Agreement of Competent Authorities of the Common Reporting Standard of October 21, 2016, resolves:

Article 1. Financial accounts in compliance with the Common Reporting Standard (CRS) shall be identified in accordance with the provisions of this Normative Instruction.

Article 2. Legal entities required to submit the e-Financeira, established by Normative Instruction RFB No. 1,571 of July 2, 2015, for events occurring from January 1, 2017, must identify financial accounts in compliance with the Common Reporting Standard (CRS), established jointly by various countries under the coordination of the Organisation for Economic Co-operation and Development (OECD).

§ 1. The information regarding the financial accounts referred to in the caput may be subject to automatic exchange of information and shall be provided through the submission of the e-Financeira, observing the deadlines and other conditions established by Normative Instruction RFB No. 1,571 of 2015.

§ 2. Exceptionally, information regarding the 1st (first) semester of 2017, identified as established in the caput, may be transmitted until the deadline fixed for the transmission of information regarding the 2nd (second) semester of 2017, provided for in item I of Article 10 of Normative Instruction RFB No. 1,571 of 2015.

Article 3. The legal entities referred to in Article 2 must identify, as a declarable account, financial accounts subject to automatic information exchange.

§ 1. The term “declarable account,” for the purposes of the caput, means an account maintained by one or more declarable persons or by a Passive Non-Financial Entity (NFE) with one or more controlling persons who are declarable persons, provided it has been identified as such in accordance with the due diligence procedures described in Sections I to VI of the Sole Annex of this Normative Instruction.

§ 2. The term “declarable person,” for the purposes of § 1, means a person from a reporting jurisdiction who is not:
I - a legal entity whose shares are regularly traded on one or more securities markets; II - any legal entity defined as a “related entity” of a legal entity described in item I; III - a government entity; IV - an international organization; V - a Central Bank; or VI - a financial institution.

§ 3. From the date an account comes to be treated as a declarable account in accordance with the due diligence procedures described in the Sole Annex of this Normative Instruction, it shall remain in that condition and shall be reported as such in subsequent e-Financeiras, unless the account holder or the controlling person of a Passive Non-Financial Entity (NFE) ceases to be a declarable person or presents a change in circumstances justifying that the account cease to be a declarable account.

Article 4. The legal entities referred to in Article 2 must provide the following information regarding each declarable account maintained by them:
I - name, address, residence jurisdiction(s), tax identification number (TIN), date and place of birth (in the case of natural persons) of each declarable person who is the account holder, and, in the case of an entity that is the account holder and that, after applying the due diligence procedures, in accordance with the provisions of Sections IV, V, and VI, is identified as having one or more controlling persons who are declarable persons, the name, address, residence jurisdiction(s), TIN of the entity, and the name, address, residence jurisdiction(s), TIN, date, and place of birth of each declarable natural person; II - the account number (or functionally equivalent information, in the absence of an account number); III - the balance or value of the account at the end of the relevant calendar year or other period established for the reporting of information, including, in the case of a monetary value insurance contract or annuity contract, the monetary value or surrender value, or, if the account has been closed, the balance on the date of closure; IV - 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 from assets held in the account, in each case paid or credited to the account or in relation to the account during the calendar year or other period established for the reporting of information; and b) total gross proceeds from the sale or redemption of financial assets paid or credited to the account during the calendar year or other period established for the reporting of information in relation to which the reporting financial institution has acted as custodian, broker, agent, or in any other capacity on behalf of the account holder; V - in the case of any deposit account, the total gross amount of interest paid or credited to the account during the calendar year or other period established for the reporting of information; VI - in the case of any other account not described in items IV and V, the total gross amount paid or credited to its holder in relation to it, during the calendar year or other period established for the reporting of information in relation to which the reporting financial institution is the obligor or debtor, including the aggregate amount of all redemption payments made to the account holder during the calendar year or other appropriate period for the reporting of information; and VII - in the case of any interest held in an investment entity that is a legal arrangement, the capacities by virtue of which the declarable person is the holder of the interest.

Sole Paragraph. Without prejudice to the provisions of item “b” of item IV of the caput, the gross proceeds from the sale or redemption of a financial asset do not need to be reported if declared by the reporting financial institution as provided for in Normative Instruction RFB No. 2,291 of November 14, 2025.

Article 5. The failure to submit the information referred to in this Normative Instruction, or its submission with errors or omissions, will result in the application, to the infringer, of the fines referred to in Article 13 of Normative Instruction RFB No. 1,571 of 2015.

Article 6. The English version of the Multilateral Agreement of Competent Authorities regarding the CRS and the English version of the CRS are available on the website of the Federal Revenue Secretariat (RFB) on the Internet at the address [URL omitted in source].

Article 7. The Sole Annex of this Normative Instruction is hereby approved.

Article 8. This Normative Instruction enters into force on the date of its publication in the Official Gazette of the Union.

JORGE ANTONIO DEHER RACHID

SOLE ANNEX
DUE DILIGENCE PROCEDURES

Section I: General Due Diligence Requirements A. An account is treated as a declarable account from the date it is identified as such, in accordance with the due diligence procedures described in Sections II to VII.
B. The balance or value of an account is determined on the last day of the calendar year or other appropriate reporting period.
C. When the balance or value threshold is determined on the last day of the calendar year, the relevant balance or value must be determined on the last day of the reporting period ending in that calendar year.
D. Reporting financial institutions are authorized to use third parties to fulfill the reporting and due diligence obligations imposed on such reporting financial institutions, but these obligations must remain the responsibility of the reporting financial institutions.
E. Reporting financial institutions are authorized to apply the due diligence procedures for new accounts to pre-existing accounts, and the due diligence procedures for high-value accounts to low-value accounts. However, in this case, the otherwise applicable rules for pre-existing accounts continue to apply.

Section II - Due Diligence for Pre-existing Individual Accounts The following procedures must be applied to identify declarable accounts among pre-existing individual accounts.

A. Accounts That Do Not Need to Be Reviewed, Identified, or Declared. A pre-existing individual account that is a monetary value insurance contract or an annuity contract is not subject to review, identification, or declaration, provided that the reporting financial institution is effectively prohibited by law from selling such contracts to residents of a reporting jurisdiction.

B. Low-Value Accounts. The following procedures apply to low-value accounts.

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 a resident for tax purposes of the jurisdiction in which the address is located, in order to determine whether such individual account holder is a declarable person.

2. Electronic Record Search. If the reporting financial institution cannot rely on a current residence address for the individual account holder based on documentary evidence, as established in sub-paragraph B(1), the reporting financial institution must electronically review consultable data maintained by the reporting financial institution for any of the following indicators and apply sub-paragraphs B(3) to (6):
   a) identification of the account holder as a resident of a reporting jurisdiction; b) current correspondence or residence address (including post office box) in a reporting jurisdiction; c) one or more telephone numbers in a reporting jurisdiction and no telephone number in the jurisdiction of the reporting financial institution; d) current instructions (other than with respect to a deposit account) to transfer funds to an account maintained in a reporting jurisdiction; e) a current power of attorney or signatory authority instrument conferring powers to a person with an address in a reporting jurisdiction; or f) an instruction to “hold correspondence” or a “care of” address in a reporting jurisdiction if the reporting financial institution does not possess any other addresses in its files for the account holder.

3. If none of the indicators listed in sub-paragraph B(2) are found in the electronic search, then no other action will be necessary until there is a change in circumstances resulting in the association of one or more indicators with the account, or until the account becomes a high-value account.

4. If any of the indicators listed in sub-paragraphs B(2)(a) to (e) are found in the electronic search, or if there is a change in circumstances resulting in the association of one or more indicators with the account, the reporting financial institution must treat the account holder as a resident for tax purposes of each reporting jurisdiction for which an indicator has been identified, unless it decides to apply sub-paragraph B(6) and one of the exceptions in such sub-paragraph applies to that account.

5. If an instruction to “hold correspondence” or a “care of” address is found in the electronic search and no other address or any other indicators listed in sub-paragraphs B(2)(a) to (e) are identified for the account holder, the reporting financial institution must, in the order most appropriate for the circumstances, apply the physical record search described in sub-paragraph C(2), or attempt to obtain from the account holder a self-certification or Documentary Evidence to determine the residence(s), for tax purposes, of such account holder. If the physical record search fails to establish any indicator and the attempt to obtain the self-certification or documentary evidence is unsuccessful, the reporting financial institution must declare the account as an undocumented account.

6. Notwithstanding the finding of an indicator from sub-paragraph B(2), the reporting financial institution is not required to treat an account holder as a resident of a reporting jurisdiction if:
   a) the account holder information contains current correspondence and residence addresses in the reporting jurisdiction, one or more telephone numbers in the reporting jurisdiction (and no telephone number in the jurisdiction of the reporting financial institution) or current instructions (with respect to financial accounts that are not deposit accounts) to transfer funds to an account maintained in a reporting jurisdiction, the reporting financial institution obtains, or has previously reviewed and maintains records of:
   i) self-certification by the account holder of the residence jurisdiction(s) of such account holder that does not include such reporting jurisdiction; and ii) documentary evidence establishing the non-declarable status of the account holder; b) the account holder information contains a current power of attorney or signatory authority instrument conferring powers to a person with an address in the reporting jurisdiction, that the reporting financial institution obtains, or has previously reviewed and maintains records of:
   i) self-certification by the account holder of the residence jurisdiction(s) of such account holder that does not include such reporting jurisdiction; or ii) documentary evidence establishing the non-declarable status of the account holder.

C. Expanded Review Procedures for High-Value Accounts. The following expanded review procedures apply 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 indicators described in sub-paragraph B(2).

2. Physical Record Search. If the reporting financial institution’s electronically searchable databases include fields, and collect all the information described in sub-paragraph C(3), then no additional physical record search will be necessary. If the electronic databases do not collect all this information, then, the reporting financial institution must, with respect to high-value accounts, also review the current master customer file and, for that which is not found in this master file, the following documents associated with the account and obtained by the reporting financial institution in the last 5 (five) years for any indicators described in sub-paragraph 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 in accordance with anti-money laundering and “know your customer” (AML/KYC) procedures, or for other regulatory purposes; d) any current powers of attorney or signatory authority instruments; and e) any current instructions (except with respect to deposit accounts) to transfer funds.

3. Exceptions in Cases Where Databases Contain Sufficient Information. The reporting financial institution is not required to perform the physical record search described in sub-paragraph C(2) in cases where the reporting financial institution’s electronically searchable information includes the following:
   a) account holder residence status; b) account holder residence and correspondence addresses currently registered with the reporting financial institution; c) account holder telephone number(s), if any, contained in the current registration recorded at the reporting financial institution; d) in the case of financial accounts that are not deposit accounts, if there are current instructions to transfer funds from the account to another account (including an account in another branch of the reporting financial institution or in another financial institution); e) current “care of” address or instruction to “hold correspondence” for the account holder, if any; and f) power of attorney or signatory authority instrument, if any.

4. Relationship Manager Inquiry to Obtain Fact Knowledge. In addition to the electronic and physical record searches described above, the reporting financial institution must treat as a declarable account any high-value account assigned to a relationship manager (including any financial accounts aggregated to such high-value account) if the relationship manager has knowledge of fact that the account holder is a declarable person.

5. Effects of Finding Indicators:
   a) if none of the indicators enumerated in sub-paragraph B(2) are found in the expanded review of high-value accounts described above, and if the account is not identified as being held by a declarable person under sub-paragraph C(4), then no other action will be necessary until a change in circumstances results in one or more indicators being associated with the account; b) if any of the indicators listed in sub-paragraphs B(2)(a) to (e) are revealed in the expanded review of high-value accounts described above, or if a subsequent change in circumstances results in one or more indicators being associated with the account, then, the reporting financial institution must treat the account as a declarable account, with respect to each reporting jurisdiction where an indicator has been identified, unless it opts to apply sub-paragraph B(6) and one of the exceptions specified in such sub-paragraph is applicable to the account; c) if a “care of” address or an instruction to “hold correspondence” is identified in the expanded review of high-value accounts described above, and no other address and none of the other indicators enumerated in sub-paragraphs B(2) (a) to (e) are identified for the account holder, the reporting financial institution must obtain from such account holder a self-certification or documentary evidence to determine 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 declare the account as an undocumented account.

6. If a pre-existing individual account is not a high-value account until December 31, 2016, but becomes a high-value account by the last day of the subsequent calendar year, the reporting financial institution must complete the expanded review procedures described in paragraph C, with respect to such account within the calendar year following the year in which this account became a high-value account. If based on this review such account is identified as a declarable account, the reporting financial institution must declare the requested information about such account with respect to the year in which it was identified as a declarable account and annually during the subsequent years, unless the account holder ceases to be a declarable person.

7. Once the reporting financial institution applies the expanded review procedures described in paragraph C to a high-value account, the reporting financial institution will not be required to reapply such procedures, beyond the relationship manager inquiry described in sub-paragraph C(4), to the same high-value account in any of the subsequent years, unless the account is undocumented, in which case the reporting financial institution must reapply them annually until such account ceases to be undocumented.

8. If there is a change in circumstances with respect to the high-value account resulting in one or more indicators described in sub-paragraph B(2) with respect to the account, then the reporting financial institution must treat the account as a declarable account with respect to each reporting jurisdiction for which an indicator has been identified, unless it opts to apply sub-paragraph B(6) and one of the exceptions of such sub-paragraph applies to that account.

9. A reporting financial institution must implement procedures to ensure that relationship managers identify any change in the circumstances of an account. For example, if a relationship manager is notified that the account holder has a new correspondence address in a reporting jurisdiction, the reporting financial institution must treat the new address as a change in circumstances and, if such change is classified according to sub-paragraph B(6), will be required to obtain the appropriate documentation from the account holder.

D. The review of Pre-existing High-Value Individual Accounts must be completed by December 31, 2017; the review of Pre-existing Low-Value Individual Accounts must be completed by December 31, 2018.

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

Section III: Due Diligence for New Accounts of Natural Persons The following procedures apply for the purpose of identifying declarable accounts among new accounts of natural persons.

A. With respect to new accounts of natural persons, during 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 residence(s) of the account holder 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 account opening, including any documentation obtained in accordance with AML/KYC procedures.

B. If the self-certification establishes that the account holder is a resident for tax purposes in a reporting jurisdiction, the reporting financial institution must treat the account as a declarable account and the self-certification must also include the TIN of the account holder with respect to such reporting jurisdiction and the date of birth.

C. If there is a change in circumstances with respect to a new natural person account of which the reporting financial institution has knowledge, or has reason to believe 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 establishing the residence(s) for tax purposes of the account holder.

Section IV: Due Diligence for Pre-existing

Entities of Entities. The following procedures apply for the purpose of identifying reportable accounts among pre-existing entity accounts.

A. Entity Accounts That Do Not Require Review, Identification, or Reporting. Unless the reporting financial institution decides 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 whose aggregate account balance or value does not exceed US$ 250,000.00 (two hundred and fifty thousand United States dollars) on December 31, 2016, will not need to be reviewed, identified, or reported as a reportable account until the aggregate balance or value exceeds US$ 250,000.00 (two hundred and fifty thousand United States dollars) on the last day of any subsequent calendar year.

B. Entity Accounts Subject to Review. A pre-existing entity account whose balance or value exceeds US$ 250,000.00 (two hundred and fifty thousand United States dollars) on December 31, 2016, and a pre-existing entity account that does not exceed US$ 250,000.00 (two hundred and fifty thousand United States dollars) on December 31, 2016, but whose aggregate account balance or value is greater than US$ 250,000.00 (two hundred and fifty thousand United States dollars) on the last day of any subsequent calendar year, must be reviewed in accordance with the procedures established in paragraph D.

C. Entity Accounts for Which Reporting Is Required. With respect to the pre-existing entity accounts described in paragraph B, only accounts maintained by one or more entities that are declarable persons, or by Passive Non-Financial Entities (PNFEs) with one or more controlling persons who are declarable persons, must be treated as reportable accounts.

D. Review Procedures for Identifying Entity Accounts for Which Reporting Is Mandatory. For the pre-existing entity accounts described in paragraph B, the reporting financial institution must apply the following review procedures to determine if the account is maintained by one or more declarable persons, or by PNFEs that have one or more controlling persons who are declarable persons:

1. Determine if an Entity is a Declarable Person:
   a) review the information maintained for regulatory or customer relationship purposes (including information collected in accordance with AML/KYC procedures) to determine if the information indicates that the account holder is a resident of a reporting jurisdiction; For this purpose, information indicating that the account holder is a resident of a reporting jurisdiction includes the place of incorporation or organization, or an address in a reporting jurisdiction; b) if the information indicates that the account holder is a resident of a reporting jurisdiction, 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 publicly available, that the account holder is not a declarable person.

2. Determine if an Entity is a Passive Non-Financial Entity with One or More Controlling Persons Who Are Declarable Persons. With respect to the holder of a pre-existing entity account (including an entity that is a declarable person), the reporting financial institution must determine if the account holder is a Passive Non-Financial Entity with one or more controlling persons who are declarable persons. If any controlling person of a Passive Non-Financial Entity is a declarable person, the account must be treated as a reportable account. In making such determinations, the reporting financial institution must follow the guidance found in sub-paragraphs D(2)(a) to (c), in the most appropriate order according to the circumstances:
   a) determining if the account holder is a Passive Non-Financial Entity. In order to determine if the account holder is a Passive Non-Financial Entity, 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 publicly available, on the basis of which it can reasonably determine that the account holder is an Active Non-Financial Entity or a financial institution, other than an investment entity described in sub-paragraph A(6)(b) of Section VII, that is not a financial institution of a participating jurisdiction; b) determining the controlling persons of the account holder. For the purpose of determining the controlling persons of the account holder, the reporting financial institution may rely on information collected and maintained in accordance with AML/KYC procedures; c) determining if a controlling person of a Passive Non-Financial Entity is a declarable person. For the purpose of determining if a controlling person of a Passive Non-Financial Entity is a declarable person, the reporting financial institution may rely on:
   i) information collected and maintained in accordance with AML/KYC procedures in the case of a pre-existing entity account maintained by one or more PNFEs whose aggregate account balance or value does not exceed US$ 1,000,000.00 (one million United States dollars); or ii) self-certification from the account holder or such controlling person regarding the jurisdiction in which the controlling person is resident for tax purposes.

E. Review Deadline and Additional Procedures Applicable to Pre-Existing Entity Accounts.

1. The review of pre-existing entity accounts whose aggregate account balance or value exceeds US$ 250,000.00 (two hundred and fifty thousand United States dollars) on December 31, 2016, must be completed by December 31, 2018.

2. The review of pre-existing entity accounts whose aggregate account balance or value does not exceed US$ 250,000.00 (two hundred and fifty thousand United States dollars) on December 31, 2016, but exceeds US$ 250,000.00 (two hundred and fifty thousand United States dollars) on December 31 of the subsequent year, must be completed in the calendar year following the year in which the balance or value exceeds US$ 250,000.00 (two hundred and fifty thousand United States dollars).

3. If there is a change in circumstances regarding a pre-existing entity account that causes the reporting financial institution to have knowledge, or reasons to believe, that the self-certification or other documentation associated with the account is incorrect or unreliable, the reporting financial institution must redetermine the status of the account in accordance with the procedures established in paragraph D.

Section V: Due Diligence for New Entity Accounts. The following procedures apply in the identification of reportable accounts among new entity accounts.

A. Review Procedures for Identifying Entity Accounts for Which Reporting Is Mandatory. For new entity accounts, the reporting financial institution must apply the following review procedures to determine if the account is maintained by one or more declarable persons, or by Passive Non-Financial Entities with one or more controlling persons who are declarable persons:

1. Determine if the Entity is a Declarable Person.
   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 information obtained by the reporting financial institution related to the account opening, including any documentation collected in accordance with AML/KYC procedures. If the entity certifies that it has no residence for tax purposes, the reporting financial institution may rely on the entity's principal office address to determine the account holder's residence; b) if the self-certification indicates that the account holder is a resident of a reporting jurisdiction, the reporting financial institution must treat the account as a reportable account, unless it reasonably determines, based on information in its possession or publicly available, that the account holder is not a declarable person with respect to such reporting jurisdiction.

2. Determine if the Entity is a Passive Non-Financial Entity with One or More Controlling Persons Who Are Declarable Persons. With respect to the holder of a new entity account (including an entity that is a declarable person), the reporting financial institution must determine if the account holder is a Passive Non-Financial Entity with one or more controlling persons who are declarable persons. If any controlling person of a Passive Non-Financial Entity is a declarable person, the account must be treated as a reportable account. In making such determinations, the reporting financial institution must follow the guidance found in sub-paragraphs A(2)(a) to (c), in the most appropriate order according to the circumstances:
   a) determining if the account holder is a Passive Non-Financial Entity. For the purpose of determining if the account holder is a Passive Non-Financial Entity, the reporting financial institution may rely on the self-certification of the account holder to establish its status, except if it has information in its possession or publicly available, on the basis of which it can reasonably determine that the account holder is an Active Non-Financial Entity or a financial institution that is not an investment entity described in sub-paragraph A(6)(b) of Section VII that is not a financial institution of a participating jurisdiction; b) determining the controlling persons of the account holder. For the purpose of determining the controlling persons of the account holder, the reporting financial institution may rely on information collected and maintained in accordance with AML/KYC procedures, provided that such procedures are consistent with the 2012 Recommendations of the Financial Action Task Force - FATF. The reporting financial institution that is not legally obliged to apply AML/KYC procedures consistent with the 2012 FATF Recommendations must apply substantially similar procedures to determine the controlling persons; c) determining if a controlling person of a Passive Non-Financial Entity is a declarable person. For the purpose of determining if a controlling person of a Passive Non-Financial Entity is a declarable person, the reporting financial institution may rely on the self-certification of the account holder or such controlling person.

Section VI: Special Due Diligence Standards. The following additional standards apply in the implementation of the due diligence procedures described above:

A. Reliance on Self-Certifications and Documentary Evidence. The reporting financial institution may not rely on a self-certification or documentary evidence if the reporting financial institution has knowledge, or reasons to believe, that the self-certification or documentary evidence is incorrect or unreliable.

A-A. Temporary Lack of Self-Certification. In exceptional circumstances where a reporting financial institution is unable to obtain a self-certification regarding a new account in time to fulfill its due diligence and reporting obligations for the period declared during which the account was opened, the reporting financial institution must apply the due diligence procedures for pre-existing accounts until such self-certification is obtained and validated.

B. Alternative Procedures for Financial Accounts Maintained by Beneficiaries Who Are Natural Persons of a Monetary Value Insurance Contract or Annuity Contract. The reporting financial institution may presume that a natural person beneficiary (who is not the owner) of a monetary value insurance contract or an annuity contract who is receiving a death benefit is not a declarable person and may treat such financial account as a non-reportable account, unless the reporting financial institution has knowledge, or reason to believe, that the beneficiary is a declarable person. The reporting financial institution has reason to believe that the beneficiary of a monetary value insurance contract or an annuity contract is a declarable person if the information collected by the reporting financial institution and associated with the beneficiary contains the indicators described in paragraph B of Section II. If the reporting financial institution has knowledge, or reasons to believe, that the beneficiary is a Declarable Person, the reporting financial institution must follow the procedures found in paragraph B of Section II.

C. Account Balance Aggregation and Currency Conversion Rules.

1. Aggregation of Natural Person Accounts. For the purpose of determining the aggregate balance or value of financial accounts maintained by natural persons, the reporting financial institution must aggregate all financial accounts maintained by the reporting financial institution, or by a related entity, but only to the extent that the reporting financial institution's computerized systems link the financial accounts by reference to a data element, such as the customer number or Tax ID, and allow the aggregation of account balances or values. Each holder of a joint financial account will be assigned the full balance or value of the joint financial account for the purpose of applying the aggregation requirements described in this sub-paragraph.

2. Aggregation of Entity Accounts. For the purpose of determining the aggregate balance or value of financial accounts maintained by an entity, the reporting financial institution must consider all financial accounts maintained by the reporting financial institution, or by a related entity, but only to the extent that the reporting financial institution's computerized systems link the financial accounts by reference to a data element, such as the customer number or Tax ID, and allow the aggregation of account balances or values. Each holder of a joint financial account will be assigned the full balance or value of the joint financial account for the purpose of applying the aggregation requirements described in this sub-paragraph.

3. Special Aggregation Rule Applicable to Relationship Managers. For the purpose of determining the aggregate balance or value of financial accounts maintained by a person in order to determine if a financial account is a high-value account, the reporting financial institution must also, in the case of any financial accounts of which the relationship manager has knowledge, or has reasons to believe, are directly or indirectly owned, controlled, or established (except as a fiduciary) by the same person, aggregate all such accounts.

4. Interpretation of Amounts to Include Equivalents in Other Currencies. All amounts in dollars represent United States Dollars (USD) and must be converted into reais using a spot rate published and determined on the last day of the fiscal year preceding the fiscal year in which the reporting financial institution is calculating the balance or value.

Section VII: Defined Terms. The following terms have the meanings described below:

A. Reporting Financial Institution.

1. The term "Reporting Financial Institution" means any financial institution of a participating jurisdiction that is not a non-reporting financial institution.

2. The term "Participating Jurisdiction Institution" means (i) any financial institution that is resident in a participating jurisdiction, but excludes any branches of such financial institution that are located outside such participating jurisdiction, and (ii) any branches of a financial institution that is not resident of the participating jurisdiction, if such branch is located in such participating jurisdiction.

3. The term "Financial Institution" means custodian institution, deposit institution, investment entities, or specific insurance company.

4. The term "Custodian Institution" means an entity that maintains, as part of its substantial business, financial assets of third parties. To be an entity with financial assets in the name of third parties as part of its significant business, the entity's gross revenue related to the maintenance of third-party assets and related financial services provided must be equal to or greater than 20% (twenty percent) of the gross revenue during the shorter of the following periods: (i) a 3 (three) year period ending on December 31 (or the last day of the fiscal year, if the fiscal year differs from the calendar year) prior to the year in which this determination is made; or (ii) the time of existence of the entity.

5. The term "Deposit Institution" means any entity that:
   a) accepts deposits in the context of banking activity or similar business; or b) holds specific electronic currency products or central bank digital currencies for the benefit of its customers.

6. The term "Investment Entity" means any entity:
   a) that carries out as its main activity one or more of the following activities or operations for or on behalf of its client:
   i) trading in financial market securities (checks, notes, certificates of deposit, derivatives, etc.); foreign exchange; bills of exchange, shares and indexed instruments; securities or trading of commodity futures; ii) individual or collective investment portfolio management; or iii) any other form of investment, administration, or management, on behalf of third parties, of financial assets, cash, or reportable cryptoassets, as defined in Instruction Normative RFB No. 2,291, of November 14, 2025; or b) whose gross revenue is primarily attributed to investments, reinvestments, or trading of financial assets or reportable cryptoassets, as defined in Instruction Normative RFB No. 2,291, of November 14, 2025, if the entity is managed by another entity that is a deposit institution, a custodian institution, a specific insurance company, or an investment entity described in sub-paragraph A(6)(a). An entity is considered to have as its main business one or more of the activities described in paragraph A(6)(a) or the gross revenue of an entity is primarily attributed to investments, reinvestments, or trading of financial assets or reportable cryptoassets, as defined in Instruction Normative RFB No. 2,291, of November 14, 2025, for the purposes of sub-paragraph A(6)(b), if the entity's gross revenue attributable to the relevant activities is equal to or greater than 50% (fifty percent) of the entity's gross revenue among the shorter of: (i) a three-year period ending on December 31 of the year prior to the year in which the determination was made; or (ii) the period during which the entity has existed. For the purposes of sub-paragraph A(6)(a)(iii), the term "any other form of investment, administration, or management on behalf of third parties of financial assets, cash, or reportable cryptoassets" does not include the provision of services for or on behalf of clients intended to effectuate purchase and sale operations or exchange between reportable cryptoassets. The term "investment entity" does not include an entity that is an Active Non-Financial Entity by meeting any of the criteria found in sub-paragraphs D(9)(d) to (g). This paragraph shall be interpreted in a manner compatible with the language established in the definition of "financial institution" in the Recommendations of the Financial Action Task Force ("Financial Action Task Force" - FATF).

7. The term "Financial Asset" includes securities (for example, shares of a corporation; participation or the beneficial interest position in an open-end participation or trust; notes, bonds, debentures, or other evidence of indebtedness), participation contract, commodities, swap (for example, interest rate swaps, currency swaps, basis swaps, interest rate caps and floors, commodity swaps, equity swaps, equity index swaps, and similar agreements), insurance contract or annuity contract, or any type of income (including futures, forward, or options contracts) in securities, reportable cryptoassets, as defined in Instruction Normative RFB No. 2,291, of November 14, 2025, participation income, commodities, swaps, insurance contract, or annuity contract. The term "financial asset" does not include direct rights to real estate not representing debt.

8. The term "Specific Insurance Company" means any entity that is an insurance company (or the holding company of an insurance company) that issues, or is obliged to make payments related to, a monetary value insurance contract or annuity contract.

9. The term "Specific Electronic Currency Product" means any product that is:
   a) a digital representation of a single fiat currency; b) issued upon receipt of funds for the purpose of carrying out payment operations; c) represented by a credit against the issuer denominated in the same fiat currency; d) accepted for payment by a natural or legal person who is not the issuer; and e) redeemable at any time and at nominal value for the same fiat currency upon request by the product holder, due to regulatory requirements to which the issuer is subject. The term "Specific Electronic Currency Product" (electronic currency) does not comprise the product created with the sole purpose of facilitating the transfer of funds from one client to another person according to client instructions. A product will not be considered created for the mentioned purpose if, in the normal course of business of the Entity transferring, the funds related to said product are held for more than sixty days after receipt of the instructions to facilitate the transfer, or, if no instructions are received, the funds related to said product are held for more than sixty days after receipt of the funds.

10. The term "Central Bank Digital Currency" means any digital fiat currency issued by a central bank.

11. The term "Fiat Currency" means the official currency of a jurisdiction, issued by that jurisdiction or by the central bank or monetary authority designated by that jurisdiction, represented by physical notes or coins or by currency in different digital forms, including bank reserves and central bank digital currencies. The term also comprises commercial bank currency and electronic currency products, (including specific electronic currency products).

12. The term "Cryptoasset" means the digital representation of a value or right that can be transferred and stored electronically through the use of cryptography and distributed ledger technology or similar technology.

13. The term "Reportable Cryptoasset" means the cryptoasset that is not currency

digital issuance of central bank currency or specific electronic money product, or for which the cryptoasset service provider has appropriately determined that it cannot be used for payment or investment purposes. B. Non-Reporting Financial Institution. 1. The term “Non-Reporting Financial Institution” means any financial institution that is: a) a government entity, international organization, or Central Bank, except with respect to: i) a payment that is derived from an obligation incurred in connection with commercial financial activity of the type conducted by a specific insurance company, custodial institution, or depository institution; or ii) the activity of holding central bank digital currency for account holders that are not financial institutions, government entities, international organizations, or central banks. b) an open pension fund; a closed pension fund; a pension fund of a government entity, international organization, or Central Bank; or a qualified credit card issuer; or c) an exempt collective investment vehicle. 2. The term “Government Entity” means the government of a jurisdiction, any political subdivision of the jurisdiction (which, for the avoidance of doubt, includes states, provinces, counties, or municipalities), or any agency or instrumentality that is wholly owned by a jurisdiction or any one or more of the foregoing (each a “Government Entity”). This category consists of constituent parts, controlled entities, and political subdivisions of a jurisdiction. a) a “constituent part” of a jurisdiction means any person, organization, agency, office, fund, instrumentality, or other body, regardless of its designation, that constitutes a governing authority of a jurisdiction. The gross revenue of the governing authority must be credited to its own account or to other accounts of the jurisdiction, with none of it being diverted for the benefit of any private person. A constituent part does not include any natural person who is a sovereign, official, or administrator acting in a private or personal capacity; b) a “controlled entity” means an entity that is separate from the jurisdiction in form or that constitutes a separate legal entity, provided that: i) the entity is wholly owned and controlled by one or more government entities, directly or through one or more controlled entities; ii) the gross revenue of the entity is credited to its own account or to accounts of one or more government entities, with none of its income being diverted for the benefit of any private person; and iii) the assets of the entity are destined for one or more government entities in the event of dissolution; c) income is not diverted for the benefit of private persons if such persons are beneficiaries of a government program, and the activities of the program are performed for the general public and relate to common welfare or the administration of some government initiative. Notwithstanding the foregoing, income is considered diverted for the
benefit of private persons if it is derived from the use of a government entity to conduct a commercial operation, such as the activities of a commercial bank that offers financial services to private persons. 3. The term “International Organization” means any international organization or agency or instrumentality of government. This category includes any intergovernmental organization (including a supranational organization): (1) that is composed primarily of governments; (2) that has a functioning headquarters, or a substantially similar agreement with the jurisdiction; and (3) whose income does not revert for the benefit of private persons. 4. The term “Central Bank” means an institution that is by law or government sanction the principal authority, other than the government of the jurisdiction itself, that issues instruments intended to circulate as currency. Such an institution may include an entity that is separate from the government of the jurisdiction, regardless of whether it is wholly or partially owned by the jurisdiction. 5. The term “Open Pension Fund” means a fund constituted to provide retirement, disability, or death benefits, or any combination thereof, to beneficiaries who are employees or former employees (or persons designated by them) of one or more employers as consideration for services rendered, provided that the fund: a) does not have a single beneficiary entitled to more than 5% (five percent) of the fund’s assets; b) is subject to government regulation and provides information to tax authorities; and c) meets, at a minimum, one of the following requirements: i) the fund, generally, is exempt from taxation on investment income or that taxation on such income is deferred or taxed at a reduced rate, due to the status of a pension or retirement plan; ii) the fund receives, at a minimum, 50% (fifty percent) of its total contributions (which are not transfers of assets from other plans specified in subparagraphs B(5) to (7) or from retirement and pension accounts described in subparagraph C(17)(a)) from sponsoring employers; iii) distributions or withdrawals from the fund are permitted only upon the occurrence of specified events related to retirement, disability, or death (except portability distributions to other pension funds described in subparagraphs B(5) to (7) or to retirement and pension accounts described in subparagraph C(17)(a)), or penalties are applied for distributions or withdrawals made prior to such specified events; or iv) employee contributions (which are not certain “make-up contributions” to technical reserves) to the fund are limited with respect to the income received by the employee or do not exceed US$ 50,000.00 (fifty thousand United States dollars) per year, applying the rules established in paragraph C of Section VI on account aggregation and currency conversion. 6. The term “Closed Pension Fund” means a fund constituted to provide retirement, disability, or death benefits to beneficiaries who
are employees or former employees (or persons designated by them) of one or more employers as consideration for services, provided that: a) the fund has fewer than 50 (fifty) participants; b) the fund is sponsored by one or more employers that are not investment entities or passive FIs; c) employee and employer contributions to the fund (except transfers of assets from retirement and pension accounts described in subparagraph C(17)(a)) are limited with respect to the income received and the respective compensation of the employee; d) participants who are not residents of the jurisdiction in which the fund is established do not hold more than 20% (twenty percent) of the fund’s assets; and e) the fund is subject to government regulation and provides information to tax authorities. 7. The term “Pension Fund of a Government Entity, International Organization, or Central Bank” means a fund established by a government entity, international organization, or Central Bank to provide retirement, disability, or death benefits to beneficiaries or participants who are employees or civil servants, or former employees or former civil servants (or persons designated by them), or who are not employees or civil servants, or former employees or former civil servants, if the benefits provided to such beneficiaries or participants represent consideration for personal services rendered to the government entity, international organization, or Central Bank. 8. The term “Qualified Credit Card Issuer” means a financial institution that meets the following requirements: a) the financial institution is a financial institution solely by being a credit card issuer that accepts deposits only when a customer makes a payment exceeding the card’s outstanding balance and the excess payment is not immediately returned to the customer; and b) starting on January 1, 2017, or before that date, the financial institution implements policies and procedures either to prevent a customer from making a deposit exceeding US$ 50,000.00 (fifty thousand United States dollars), or to ensure that any customer deposit exceeding US$ 50,000.00 (fifty thousand United States dollars) is returned to the customer within 60 (sixty) days, in each case applying the rules established in paragraph C of Section VI for account aggregation and currency conversion. For this purpose, an excess payment by a customer does not refer to credit balances related to disputed charges, but includes credit balances resulting from the return of purchases. 9. The term “Exempt Collective Investment Vehicle” means an investment entity regulated as a collective investment vehicle, provided that all interests in the collective investment vehicle are held by, or through, individuals or entities that are not reportable persons, except a passive FI with controlling persons who are reportable persons. An investment entity that is regulated as a collective investment vehicle does not cease to be qualified, according to subparagraph
B(9), as an exempt collective investment vehicle solely because the collective investment vehicle has issued bearer shares, provided that: a) the collective investment vehicle has not issued, and does not issue, any bearer shares after January 1, 2017; b) the collective investment vehicle redeems all such shares; c) the collective investment vehicle executes the due diligence procedures established in Sections II to VII and reports any information that must be declared with respect to such shares when they are presented for redemption or other payment; and d) the collective investment vehicle has in place policies and procedures to ensure that such shares are redeemed or immobilized as soon as possible and, in any case, before January 1, 2017. C. Financial Account 1. The term “Financial Account” means any account maintained by a financial institution and includes a deposit account, a custodial account, and: a) in the case of an investment entity, any equity or debt interest in the financial institution. Notwithstanding the above, the term “financial account” does not include any equity or debt interest in an entity that is an investment entity solely by (i) providing investment advice and acting on behalf of, or (ii) managing portfolios and acting on behalf of a client for investment, management, or administration of financial assets deposited on behalf of the client with the financial institution that is not such entity; b) in the case of a financial institution not described in subparagraph C(1)(a), any equity or debt interest in the financial institution, if the class of interests was established for the purpose of avoiding reporting information in accordance with this Ordinary Instruction; and c) any cash-value insurance contract and any annuity contract issued or maintained by a financial institution, except those that are not investment-linked, that are not non-transferable life annuities issued to individuals, and that capitalize a pension or disability benefit linked to an account that is an excluded account. The term “financial account” does not include any account that is an excluded account. 2. The term “Deposit Account” includes commercial, checking, savings, Certificate of Deposit - CDB, savings account, or any account whose value is evidenced by a deposit certificate, savings certificate, investment certificate, debt instrument, or similar instrument held by a depository institution. The deposit account also includes: a) amount held by an insurance company pursuant to a guaranteed investment contract or similar agreement to pay or credit interest; b) account or escrow account that represents all specific electronic money products held for the benefit of a customer; and c) account that holds one or more central bank digital currencies for the benefit of a customer. 3. The term “Custodial Account” means an account (except an insurance contract or annuity contract) that holds one or more financial assets for the benefit of another
person. 4. The term “Interest” means, in the case of a partnership that is a financial institution, an equity or profits interest in the partnership. 5. The term “Insurance Contract” means a contract (except an annuity contract) under which the issuer agrees to pay an amount in the event of a specific contingency involving mortality, infirmity, accident, liability, or property risk. 6. The term “Annuity Contract” means a contract under which the issuer agrees to make payments for a specified period of time in part or in whole based on the life expectancy of one or more individuals. The term also encompasses a contract classified as an annuity contract in accordance with the legislation, rules, or practice of the jurisdiction where the contract was issued/signed, under which the issuer agrees to make payments for a period of years. 7. The term “Cash-Value Insurance Contract” means an insurance contract (except indemnity in a reinsurance contract between two insurance companies) that has a cash value. 8. The term “Cash Value” means the greater of the following options: (i) the amount that the policyholder is entitled to receive in the event of surrender or termination of the contract (determined without reduction of any surrender charge or loan policy), or (ii) the amount of funds that the policyholder may borrow, according to or with reference to the contract. Notwithstanding, the term “cash value” does not include the amount to be paid under an insurance contract: a) solely by reason of the death of an individual insured by a life insurance contract; b) for benefits resulting from personal accident or illness or other benefit that provides indemnification for economic loss due to the occurrence of an insured event; c) as a refund of insurance premiums previously paid (except insurance costs, whether effectively mandatory or not) under an insurance contract (which is not life insurance associated with an investment or annuity contract) due to the cancellation or rescission of the contract, the reduction of risk exposure during the effective period of the contract, or resulting from the correction of a posting error or similar regarding the contract premium; d) as a dividend to the policyholder (except a surrender dividend), provided that the dividend is related to an insurance contract, under which the only benefits payable are described in subparagraph C(8)(b); or e) as the return of a premium advance or deposited premium for an insurance contract for which the premium is payable at least annually if the amount of the premium advance or deposited premium does not exceed the next annual premium that will be paid according to the contract. 9. The term “Pre-existing Account” means a financial account maintained by a reporting financial institution on December 31, 2016, or an account that is treated as a financial account solely due to changes made to the Common Reporting Standard (CRS), maintained on December 31, 2025. 10. The term “New Account”
means a financial account maintained by a reporting financial institution opened on or after January 1, 2017, or an account that is treated as a financial account solely due to changes made to the Common Reporting Standard (CRS), on or after January 1, 2026. 11. The term “Pre-existing Individual Account” means a pre-existing account maintained by one or more individuals. 12. The term “New Individual Account” means a New Account maintained by one or more individuals. 13. The term “Pre-existing Entity Account” means a pre-existing account maintained by one or more entities. 14. The term “Low-Value Account” means a pre-existing individual account with a balance or aggregate value not exceeding US$ 1,000,000.00 (one million United States dollars) on December 31, 2016. 15. The term “High-Value Account” means a pre-existing individual account with a balance or aggregate value exceeding US$ 1,000,000.00 (one million United States dollars) on December 31, 2016, or on December 31 of any subsequent year. 16. The term “New Entity Account” means a new account maintained by one or more entities. 17. The term “Excluded Account” means any of the following accounts: a) retirement or pension accounts that meet the following requirements: i) the account is subject to regulation as a personal retirement account or is part of a registered or regulated retirement or pension plan for the provision of retirement or pension benefits (including disability or death benefits); ii) the account receives favorable tax treatment (for example, contributions to the account that would be subject to taxation are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate); iii) information about the account is reported to tax authorities; iv) withdrawals are conditioned on reaching a certain age for retirement, disability, or death, or penalties apply to withdrawals made before such specified events; and v) annual contributions (i) are limited to US$ 50,000.00 (fifty thousand United States dollars) or less, or (ii) there is a maximum lifetime contribution limit to the account of US$ 1,000,000.00 (one million United States dollars) or less, in each case applying the rules established in paragraph C of Section VI for account aggregation and currency conversion. A financial account that otherwise satisfies the requirements of subparagraph C(17)(a)(v) will not fail to meet such requirements solely because such financial account may receive assets or funds transferred from one or more financial accounts that meet the requirements of subparagraphs (C)(17)(a) or (b) or one or more retirement or pension funds that meet the requirements of subparagraphs B(5) to (7). b) an account that meets the following requirements: i) the account is subject to regulation as an investment vehicle for purposes other than retirement and is regularly traded on a established securities
market, or the account is subject to regulation as a savings vehicle for purposes other than retirement; ii) the account receives favorable tax treatment (for example, contributions to the account that would be subject to taxation are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate); iii) withdrawals are conditioned on meeting a specific criterion related to the purpose of the investment or savings account (for example, the provision of educational or medical benefits), or penalties apply to withdrawals made before such criteria are met; and iv) annual contributions are limited to US$ 50,000.00 (fifty thousand United States dollars) or less, subject to the rules of subparagraph C of Section VI for account aggregation and currency conversion. A financial account that otherwise satisfies the requirements of subparagraph C(17)(a)(v) will not fail to meet such requirements solely because such financial account may receive assets or funds transferred from one or more financial accounts that meet the requirements of subparagraphs (C)(17)(a) or (b) or one or more retirement or pension funds that meet the requirements of subparagraphs B(5) to (7). c) a life insurance contract with a coverage period that ends before the insured person reaches the age of 90 (ninety) years, provided that the contract meets the following requirements: i) periodic premiums, which do not decrease over time, that are due at least annually during the life of the contract or until the insured reaches the age of 90 (ninety) years, whichever occurs first; ii) the contract has no cash value that any person can access (through withdrawal, loan, or otherwise) without rescinding such contract; iii) the value (other than a death benefit) to be paid upon cancellation or rescission of the contract cannot exceed the aggregate premiums paid by the contract, minus the total mortality, disability, and expense charges (whether actually imposed) for the period or periods of the contract’s existence and any value paid prior to cancellation or rescission of the contract; and iv) the contract is not held by a transferee for value. d) an account that is maintained solely by an estate if the documentation of such account includes a copy of the will or death certificate of the deceased. e) an account opened in any of the following cases: i) court order or decision. ii) sale, exchange, or lease of real estate or personal property, provided that the account meets the following requirements: i) the account is funded solely with resources from a down payment, resources entrusted in escrow, a deposit in an amount sufficient to secure an obligation directly related to the transaction, or a similar payment, or is funded by a financial asset deposited in the account related to the sale, exchange, or lease of the asset; ii) the account was opened and is used solely to secure
the buyer’s obligation to pay the purchase price of the asset, the seller’s obligation to pay any contingency for which they are responsible, or the lessor’s or lessee’s obligation to pay any damages related to the leased asset as agreed in the lease; iii) the assets of the account, including income earned therein, are paid or distributed for the benefit of the buyer, seller, lessor, or lessee (including to fulfill an obligation of such person) when the asset is sold, exchanged, or redeemed, or the lease is terminated; iv) the account is not a margin account or similar account opened with respect to a sale or exchange of financial assets; and v) the account is not associated with an account described in subparagraph C(17)(f); iii) an obligation of an institution

financial account that administers a loan secured by real estate to allocate part of a payment exclusively to facilitate the future payment of taxes or insurance related to the real estate; iv) an obligation of a financial institution exclusively to facilitate the future payment of taxes; v) the establishment or capital increase of a company, provided that the account meets the following requirements: i) the account is used exclusively to deposit capital intended for the establishment or capital increase of a company, as prescribed by law; ii) any amounts held in the account remain blocked until the reporting financial institution obtains independent confirmation regarding the establishment or capital increase; iii) the account is closed or converted into an account in the name of the company after the establishment or capital increase of the company; iv) any refunds resulting from unsuccessful establishment or capital increase, net of fees of service providers and similar, are made exclusively to the persons who contributed the amounts; and v) the account has not been established for more than twelve months. e-A) a deposit account that represents all specific electronic currency products held for the benefit of a client if the ninety-day moving average of the aggregated balance of the account or the value during any period of ninety consecutive days does not exceed US$ 10,000.00 (ten thousand United States dollars) on any day of the calendar year or other reporting period due. f) a deposit account that meets the following requirements: i) the account exists exclusively because a client has made an overpayment of a balance due on a credit card or other revolving line of credit and the overpayment has not been immediately returned to the client; and ii) starting on January 1, 2017, or before that date, the financial institution implements policies and procedures either to prevent a client from making a deposit exceeding US$ 50,000.00 (fifty thousand United States dollars), or to ensure that any client deposit exceeding US$ 50,000.00 (fifty thousand United States dollars) is returned to the client within 60 (sixty) days, in each case applying the rules set forth in paragraph C of Section VI for account aggregation and currency conversion. For this purpose, an excess payment by a client does not refer to credit balances related to disputed charges, but includes credit balances arising from the return of purchases. g) 18. "Participation" means, in the case of a partnership that is a financial institution, a participation in the capital or profits of the partnership. In the case of a trust that is a financial institution, a "Participation" is considered held by any person treated as a settlor or beneficiary of all or part of the trust, or by any other natural person who exercises effective final control over the trust. A Reportable Person will be treated as a beneficiary of a trust if such Reportable Person has the right to receive, directly or
indirectly (for example, through an attorney), a mandatory distribution or can receive, directly or indirectly, a discretionary distribution from the trust. D. Reportable Account, 1. The term "Reportable Account" means an account maintained by one or more reportable persons or by a passive NFE with one or more controlling persons who are reportable persons, provided that it has been identified as such in accordance with the due diligence procedures described in Section I to Section VI. 2. The term "Reportable Person" means a person from a reporting jurisdiction that is not: (i) an entity whose shares are regularly traded on one or more established securities markets; (ii) any entity that is a related entity of an entity described in clause (i); (iii) a governmental entity; (iv) an international organization; (v) a central bank; or (vi) a financial institution. 3. The term "Person from a Reporting Jurisdiction" means an individual or entity that is resident in a reporting jurisdiction in accordance with the tax laws of such jurisdiction, or the estate of a deceased person who is resident of a reporting jurisdiction. For this purpose, an entity such as a partnership, a limited liability company or a similar legal arrangement that does not have residence for tax purposes, must be treated as resident in the jurisdiction in which its place of effective management is located. 4. The term "Reporting Jurisdiction" means a jurisdiction: (i) with which Brazil has a formal commitment to provide the information specified in Instruction Normative RFB No. 1,680 of December 28, 2016, and (ii) that has been identified on the list published at http://idg.receita.fazenda.gov.br/acesso-rapido/legislacao/acordos-internacionais/acordos-para-intercambio-de-informacoes-relativas-a-tributos/convencao-multilateral-sobre-assistencia-mutua-administrativa-em-materia-tributaria/notificacoes-crs-mcaa/nf-crs-1f.pdf. 5. The term "Participating Jurisdiction" means a jurisdiction (i) with which an agreement, allowing the provision of the information specified in the Instruction, is in force and (ii) that has been identified on a published list. 6. The term "Controlling Persons" means the natural persons who exercise control over an entity. In the case of a Trust, this term means the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries and any other natural person who exercises effective final control over the trust and, in the case of a legal arrangement that is not a trust, such term means persons in equivalent or similar positions. The term "controlling persons" must be interpreted consistently with the recommendations of the Financial Action Task Force (FATF). 7. The term "NFE" means any entity that is not a financial institution. 8. The term "Passive NFE" means any: (i) NFE that is not an Active NFE; or (ii) an investment entity described in subparagraph A(6)(b) that is not a financial institution of a participating
jurisdiction. 9. The term "Active NFE" means any NFE that meets any of the following criteria: a) that less than 50% (fifty percent) of the gross income of the NFE for the previous calendar year or other appropriate reference period consists of passive income and that less than 50% (fifty percent) of the assets held by the NFE during the previous calendar year or other appropriate reference period are assets that produce or are held for the production of passive income; b) that the shares of the NFE are regularly traded on an established securities market or that the NFE is a related entity of an entity whose shares are traded on an established securities market; c) that the NFE is a governmental entity, international organization, Central Bank or an entity whose ownership belongs entirely to one of the foregoing. d) that substantially all activities of the NFE consist of holding (in whole or in part) the outstanding shares in, or providing financing and services to, one or more subsidiaries involved in transactions or businesses that are not the usual business of a financial institution, provided that an entity does not qualify for this status if the entity operates (or presents itself) as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund, or any investment instrument whose object consists of acquiring or financing companies and, thus, holding participation in such companies as capital assets for investment purposes; e) that the NFE is not yet operating and does not have a prior operational history, but is investing capital in assets with a view to operating in a branch different from that of a financial institution, provided that the NFE does not qualify for this exception after the date corresponding to the period of 24 (twenty-four) months after the date of initial organization of the NFE; f) that the NFE has not been a financial institution in the last 5 (five) years and is in the process of liquidating its assets or is restructuring with the intent to continue or restart its operations in a business different from that of a financial institution; g) that the NFE operates mainly with financing and hedging transactions with, or for, related entities that are not financial institutions, and does not offer financing or hedging services to any entity that is not a related entity, provided that the group of any of these related entities is mainly involved in a business different from that of a financial institution; h) that the NFE meets all of the following requirements: i) is constituted and has operated in the jurisdiction of its residence exclusively for religious, charitable, scientific, artistic, cultural, athletic or educational purposes; or is constituted and has operated in the jurisdiction of its residence and is a professional organization, business association, chamber of commerce, labor organization, agricultural or horticultural organization, civic association or an organization operated
exclusively to promote social welfare; ii) holds tax immunity from income tax in the jurisdiction of its residence; iii) has no shareholders or members who have participation as owners or beneficiaries in its revenue or assets; iv) the legislation applicable in the jurisdiction of residence of the NFE or the formation documents of the NFE do not authorize any distribution of income or assets of the NFE, nor the application thereof for the benefit of a natural person or non-charitable entity that is not compatible with the achievement of the charitable activities of the NFE, or as remuneration for services rendered, or as payment representing the fair market value of goods acquired by the NFE; v) the legislation applicable in the jurisdiction of residence of the NFE or the formation documents of the NFE determine that, in the event of liquidation or dissolution of the NFE, all its assets are distributed to a governmental entity or another non-profit organization, or are confiscated by the government of the jurisdiction of residence of the NFE or any political subdivision of such government. E. Miscellaneous Definitions 1. The term "Account Holder" means the person listed or identified as the holder of a financial account by the financial institution that maintains the account. A person, except a financial institution, that maintains a financial account for the benefit of another person in the capacity of agent, custodian, mandatary, signatory, investment advisor, or intermediary, that is not treated as the account holder for purposes of the Common Reporting Standard, and such other person is treated as the account holder. In the case of a cash value insurance contract or an annuity contract, the account holder is any person who has the right to access the cash value or change the beneficiary of the contract. If no person can access the cash value or change the beneficiary, the account holder is any person named as owner in the contract and any person with a vested right to payment under the terms of the contract. Upon maturity of a cash value insurance contract or an annuity contract, each person who has the right to receive payment under the contract will be treated as the account holder. 2. The term "AML/KYC Procedures" means the due diligence procedures regarding customers of a reporting financial institution in accordance with the anti-money laundering requirements or similar to which the reporting financial institution is subject. 3. The term "Entity" means a legal person or legal arrangement, such as a corporation, partnership, trust or foundation. 4. An entity is a "related entity" of another entity if one of the entities controls the other entity, or if the two entities are under common control. For this purpose, control includes direct or indirect ownership of more than 50% (fifty percent) of the votes and value in an entity. 5. The term "Taxpayer Identification Number - TIN" means the taxpayer identification number (or functional
equivalent in the absence of a taxpayer identification number). 6. The Term "Documentary Evidence" includes any of the following: a) a certificate of residence issued by an authorized government body (for example, Government or agency, or municipality) of the jurisdiction in which the beneficiary claims to be resident; b) with respect to a natural person, any valid identification issued by an authorized government body (for example, Government or agency, or municipality), which includes the name of the individual and that is typically used for identification purposes; c) with respect to an Entity, any official document issued by an authorized government body (for example, Government or agency, or municipality) that includes the name of the entity and the address of its principal office in the jurisdiction in which it claims to be resident or the address in the jurisdiction in which the entity was incorporated or organized; d) any audited financial statement, third-party credit report, bankruptcy petition or report of securities market regulators.