IEIM403560 - Due Diligence: Special Due Diligence Rules: Aggregation and Currency

Due Diligence: Special Due Diligence Rules: Aggregation and Currency

Aggregation of individual accounts and entity accounts

Identical rules apply to aggregation for individual and entity accounts.

Financial Institutions are required to aggregate all financial accounts maintained by it or by a related entity, but only to the extent that the Financial Institution’s computerised systems link the financial accounts by reference to a data element such as client number or TIN, and allow account balances or values to be aggregated.

Each joint holder of a financial account must be attributed the entire balance or value of the account for purposes of applying the aggregation requirements.

Special aggregation rule applicable to relationship managers – all accounts

In determining the aggregate balance or value of financial accounts held by a person to determine whether a financial account is a High Value Account, a Financial Institution is also required to aggregate all accounts held by that person which a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled, or established (other than in a fiduciary capacity) by that person.

Paragraph 18 of the Commentary to Section VII of the Common Reporting Standard contains examples that may be helpful.

Amounts read to include equivalent in other currencies

Where accounts are denominated in a currency other than US dollars then either the threshold limits must be converted into the currency in which the accounts are denominated before determining if they apply, or the balances shown in the accounts must be converted into US dollars before applying the threshold limits.

This should be done using a published spot rate for the 31 December of the year being reported or in the case of an insurance contract or Annuity Contract, the date of the most recent contract valuation.

In the case of closed accounts the spot rate to be used is the rate on the date the account was closed.