The International Tax Compliance Regulations 2015

Due diligence requirements

3.—(1) A reporting financial institution must establish and maintain arrangements that are designed to identify reportable accounts.

(2) Such arrangements must—

(a) identify the territory in which an account holder or a controlling person is resident for income tax or corporation tax purposes or for the purposes of any tax imposed by the law of that territory that is of a similar character to either of those taxes,

(b) apply the due diligence procedures set out in the relevant agreement,

(c) secure that the information obtained in accordance with this regulation, or a record of the steps taken to comply with this regulation, in relation to any financial account is kept for a period of six years beginning with the end of the year in which the arrangements applied to the financial accounts.

(3) The due diligence procedures are—

(a) in relation to a reporting financial institution under the DAC, set out in Annexes I and II to the DAC,

(b) in relation a reporting financial institution under to the CRS, set out in Sections 2 to 7 of the CRS,

(c) in relation to a reporting financial institution under the FATCA agreement, set out in Annex I to that agreement.

(4) A reporting financial institution under the CRS must also apply the rules in Annex II of the DAC treating references to “Member State” in that Annex as references to “Participating Jurisdiction”.

(5) In applying the due diligence procedures, accounts within regulation 2(1)(b) and (c) in respect of which no election under regulation 2(2)(c) has been made are treated as new accounts or pre-existing accounts as the case may be.