The topic involves discussion around major similarities and differences between updating of on-boarding and the Preexisting account analysis, alongside with role of responsible officer and corporate governance;
- Proper classification of individual and entity accounts, and the necessity to make FATCA- BAU
- Deadline for adhering to on-boarding updates for FATCA purposes
- Deadlines to be adhered for pre-existing account review for FATCA purposes again
- Declaration of completion by FFI responsible officer
- Relationship manager inquiries regarding U.S person status of account holder maintained
- Necessity to inquire regarding aggregation of accounts from RM
- Analysis of accounts maintained for 6 years
- Application of pre-existing exceptions to avoid additional client contact, for entity accounts
Responsible Officer & Corporate Governance:
Whilst the final regulations require a participating FFI to appoint a responsible officer for certification, the requirement itself is not in the IGA’s, although some local tax authorities like HMRC (HM Revenue & Customs) in the UK have considered adding the requirement.
The certifications for a responsible officer (RO) include the participating FFI completing the review of all pre-existing high value accounts and to make these final certifications FATCA has mandated that the participating FFI adopt a compliance program under the authority of the RO.
In selecting RO, the FFI has to make sure it chooses someone at a senior level to command the proper authority, to make sure that the work is complete and to make a reasonable effort to assist in ensuring no employees of the FFI are assisting account holders avoid FATCA detection.
The IA or the internal audit team as we call of the FFI should play a significant role in the process providing underlying assurance to the responsible officer making the certifications. When the FFI is a large expanded affiliate group, the RO should mandate the creation of sub-responsible officers to certify at the business line or entity level.
Corporate Governance Team and Its Responsibilities:
Developing a strong corporate governance structure is of utmost importance in complying with a new, still-changing implementation process. Because of the breadth of FATCA, the corporate governance team should be comprised of the members of the legal, compliance and operations teams as well as business line professionals and the responsible officer himself/herself.
Furthermore, the policies and procedures created for FATCA compliance should be reviewed and approved by the compliance and corporate governance teams along with ongoing testing of the same.
Needless to say, the tone from the top should drive the execution in line with laid down principles.
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