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Amendments to the Common Reporting Standard

Earlier this week, the OECD published new Amendments to the Common Reporting Standard (CRS) –  for those of you brave enough to delve into the document, the first half covers the new Crypto-Asset Reporting Framework (CARF), and the Amendments to the CRS start at page 62.

The amendments can be easily classified in two parts.  Firstly, the scope of Financial Assets has been widened to include Digital Money Products, which were not previously captured by the CRS.  Secondly, there are additions to the reportable information set which are geared towards making the data authorities exchange with each other more valuable and easier to assess.

Digital money?

Within the new rules, the terminology used is Specified Electronic Money Product – this basically covers digital representations of fiat currencies, including Central Bank Digital Currencies (CBDCs).

The definition of “Depository Institution” has been expanded from:

“accepts deposits in the ordinary course of a banking or similar business”

To also include:

“holds Specified Electronic Money Products or Central Bank Digital Currencies for the benefit of customers”

This will bring some e-money providers into scope for CRS for the first time, or for those who already had CRS requirements, widening the range of products they need to report on. There are also details included about the distinction between digital money and digital assets, and what to do where there is overlap between the new CRS requirements and the new CARF requirements. If you are uncertain what this means for your business, then EFI will be happy to assist.

More reporting?

An update to tax regulations usually means more reporting, yes! The following items are being added to the reportable information for CRS:

  • Type of account – custodial, depository etc

  • New or Pre-Existing account marker

  • Valid Self-Certification held marker

  • Joint account marker plus number of holders

  • Controlling Person status

The type of account will allow tax authorities to more easily analyse the income reported, and for those with a single business type, will be static information easy to include in reports.

New accounts for tax purposes are those opened after the start of CRS regulations, in the UK that’s back in 2016 – all customers opening accounts on or after 1 January 2016 should have completed a Self-Certification (Self-Cert) at account opening stage. The addition of both this and whether a valid Self-Cert is associated with the account is a clear move to gain more visibility on how successful Financial Institutions (FIs) have been in collecting this data from customers and getting further information from them when discrepancies arise. FIs with gaps in their collection or validation processes for Self-Certs should now be considering how to effectively remediate the gaps and make it easy for their customers to update them.

Controlling Person status is definitely the most significant addition in terms of work for FIs. Although there is a standard list of Type of Controlling Person recommended by the OECD for Self-Cert forms, it has not previously been mandatory to report. Many firms may not have been:

  • using the standard list to request Controlling Person Type on Self-Cert forms; or

  • storing this information electronically against the Controlling Person record in their system.

Many firms that have been collecting and storing electronically, may have done so in free text types of field rather than by coded entry. This could result in the need for an extensive remediation of data entry and transformation for some of these firms.

Another item to note that is if a Controlling Person is such by the means of more than one role (e.g. by ownership and by management), there will be a reporting hierarchy to adhere to, whereby the ownership one will take precedence. This will require close collaboration between the tax and financial crime prevention teams to achieve consistency and accuracy of data held.

What should I do now?

This has only just been published by the OECD, so is going to take a little bit of time to be implemented at local level. Reasonable expectations would be that we see local tax authorities make the changes to the regulations next year for a 2024 start date.

This gives time to plan how your firm will approach the identification and remediation of any gaps to achieve compliance with the requirements efficiently and effectively.

Changes to reporting technology will also be required, but it would be best to hold off on final specs until local regulations are updated.

EFI has developed award winning Documentation and Reporting technology to take the pain out of these requirements for you and your customers. In addition, we regularly advise FIs on Automatic Exchange of Information (AEOI) matters and are closely monitoring the implementation of these new requirements both nationally and internationally. We’d love to talk to you about your AEOI and CARF journey so far including any challenges you may have. If you’d like to learn more about how EFI can support you with these changes, please get in touch today!


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