IEIM403180 - Due Diligence: New Individual Accounts: Self Certifications: Incorrect or Unreliable

Due Diligence: New Individual Accounts: Self Certifications: Incorrect or Unreliable

A self-certification remains valid unless the Reporting Financial Institution knows, or has reason to know, that the original self-certification is incorrect or unreliable. This might be the case either at the time a new account is opened by an existing customer, or as a result of a change of circumstances reported by the Account Holder, for example, a change of address.

Whatever the cause, where the Reporting Financial Institution cannot rely on the original self-certification it must obtain either –

1) a valid self-certification that establishes the residence(s) for tax purposes of the Account Holder, or

2) a reasonable explanation and documentation (as appropriate) supporting the validity of the original self-certification (and retain a copy or a notation of such explanation and documentation).

A Reporting Financial Institution may have reason to know that a self-certification or Documentary Evidence is unreliable or incorrect. It may have information in its possession that suggest different facts pertaining to the Account Holder than those on the self-certification. This will include the knowledge of the relevant relationship managers. If a reasonably prudent person in the position of the reporting Financial Institution would question the information provided then that is reason to know that the information may be incorrect or unreliable.

A Reporting Financial Institution also has reason to know that a self-certification or Documentary Evidence is unreliable or incorrect if there is information in the documentation or in the Reporting Financial Institution’s account files that conflicts with the person’s claim regarding its status.

Standards of knowledge applicable to self-certifications and Documentary Evidence

A Reporting Financial Institution has reason to know that a self-certification provided by a person is unreliable or incorrect if:

• the self-certification is incomplete with respect to any item on the self-certification that is relevant to the claims made by the person,
• the self-certification contains any information that is inconsistent with the person’s claim, or
• the Reporting Financial Institution has other account information that is inconsistent with the person’s claim.

A Reporting Financial Institution that relies on a service provider to review and maintain a self-certification is considered to know or have reason to know the facts within the knowledge of the service provider.

A Reporting Financial Institution may not rely on Documentary Evidence provided by a person if the Documentary Evidence does not reasonably establish the identity of the person presenting it.

A Reporting Financial Institution may not rely on Documentary Evidence if it contains information that is inconsistent with the person’s claim as to its status, the Reporting Financial Institution has other account information that is inconsistent with the person’s status, or the Documentary Evidence lacks information necessary to establish the person’s status.

A Financial Institution may choose to treat a person as having the same status that it had prior to the change in circumstances until the earlier of 90 calendar days from the date that the self-certification became invalid due to the change in circumstances, the date that the validity of the self-certification is confirmed, or the date that a new self-certification is obtained. A Financial Institution may rely on a self-certification without having to inquire into possible changes of circumstances that may affect the validity of the statement, unless it knows or has reason to know that circumstances have changed.

If the Financial Institution cannot obtain a confirmation of the validity of the original self-certification or a valid self-certification during such 90-day period, the Reporting Financial Institution must treat the Account Holder as resident of the jurisdiction in which the Account Holder claimed to be resident in the original self-certification and the jurisdiction in which s/he may be resident as a result of the change in circumstances.

Where the Financial Institution is unable to obtain any valid self-certification within 90 days of opening the account, and there are no indicia of residence in any jurisdiction other than the UK, then the account is reportable to the USA under FATCA but is not reportable under the CRS. However if there are indicia of residence in reportable jurisdictions other than the UK, then the account is also reportable under the CRS to those other jurisdictions.