Banks Et Al Brace For More Financial Account Information Reporting
On the heels of extensive preparation for the implementation of FACTA in St. Kitts and Nevis, banks and other financial institutions are now starring down the barrel of additional financial accounts information reporting on a wider scale.
The Organization for Economic Co-operation and Development (OECD) has proposed a global version of the US’ Foreign Account Tax Compliance Act (FATCA) for all member states which will require financial institutions to report information on financial accounts of citizens to their respective government tax agencies.
This Common Standard on Reporting and Due Diligence for Financial Account Information (CRS) will require OECD countries to sign intergovernmental among each other and implement the relevant domestic legislation.
Under the CRS regulations, financial institutions would in 2017 have to begin reporting information on accounts in existence as at December 2015 and new accounts opened on or after January 2016.
The beefing up of financial accounts reporting is being undertaken to combat tax evasion, money laundering and financing of terrorist activities.
The imminent introduction of Common Reporting Standards by the Global Forum will present some human capacity and financial challenges for the Federation to operate within the international guidelines, says Prime Minister Dr. Timothy Harris.
He said the recent experiences of negative listings regards non-compliance with tax information have reinforced the resolve of the government to strengthen its regulatory regime to make certain that regulated entities develop and implement appropriate compliance systems.
“These systems require all regulated entities to collect and maintain adequate due diligence information to identify your clients, beneficial owners of accounts, and entities registered in our Federation.”
Entities and agencies must position themselves to identify risks to their businesses, and introduce the appropriate measures into operations to assess and mitigate them, Dr. Harris advised.
“It is essentially important that you implement all the required measures, which include Know Your Clients (KYC), requesting and maintaining the proper documentation as required by law before entering into a business relationship. Your decisions to conduct business should firstly evaluate and consider the level of risk associated with these persons and entities and the effect that this would have on the integrity of our Federation’s financial systems,” the Prime Minister urged.
