OECD | AUTOMATIC EXCHANGE OF INFORMATION AGREEMENT: IS THIS THE END OF BANK SECRECY?

For many years OECD has without much conviction talked about implementing automatic exchange agreements.

Then came FACTA. The success and the speediness of the implementation process of FACTA has launched again

the automatic exchange agreement program. Do not hesitate to contact me atcorporate@offshorepremium.com if

you have questions about opening an offshore bank account.

Automatic Exchange of Information Agreement: The Principles

The OECD used the momentum created by FATCA to initiate the introduction of a standard for the automatic

exchange of information.

The framework contains:

a common standard on information reporting, due diligence and exchange of information;

a legal and operational basis for the exchange of information; and

Common or compatible technical solutions.

The common due diligence process will require financial institutions to identify all account holders that are resident in

another country. On these account holders, the financial institution will have to report to their local tax authorities

account details such as name, tax identification number and interest and dividends received, as well as gross

proceeds on the sale of stocks. This all has to be done within the IT format that is currently being developed as a

standard for reporting.

What does it mean for you?

Said that you are a citizen from one of the EU countries that have signed the convention such as for example

Belgium, Finland, France, Germany, Italy, Portugal, Spain or United Kingdom and you have an offshore account in

Anguilla, Bermuda, BVI, Cayman, Curacao, Cyprus, Isle of Man, Lichtenstein and so on (please see below the full

list) then by September 2017 or 2018 depending of the country all your accounts information (including balances,

dividends or other amount received will be automatically transferred to your tax authorities.

Is it the end of Bank Secrecy?

Between TIEA, FACTA and now the OECD convention it is indeed a big chunk of bank secrecy that is disappearing.

of course there will always be options for those that are looking for option to hide their assets far from prying eyes but

less and less.

It will also revolution the business of those providing offshore bank accounts opening services. Up to now offshore

bank account opening was an administrative formality only and this is why it was possible to find cheap offers for

bank account opening. Those offers still exist but to use them would be suicidal. The process of opening an offshore

bank account will become a “a la carte process” where individual solutions will have to be adapted for every single

client. Each client personal situation will have to be reviewed on a case per case basis. His nationality and place of

residence will have to be matched with TIEA, DTA, and Automatic exchange agreements signatory list. The place

where opening his bank account and where to incorporate his company will have to be carefully selected. This will

take time and generate fees that are more costly.

Also before you where opening an offshore bank account for life. This will not be the case anymore with clients

having to review their situation every year to keep abreast of the changes and the risk attached to their personal

situation

List of countries having signed the convention at the 29 October 2014

To date the Multilateral Competent Agreement has been signed by 51 countries. The Common Reporting

for Automatic Exchange of Information adopted by OECD is by itself not binding. The

Agreement link the Common Reporting Standard RS with the legal basis for information exchange (such as the

OECD’s Multilateral Convention on Mutual Assistance in Tax Matters or a bilateral tax treaty).

Also before you where opening an offshore bank account for life. This will not be the case anymore with clients

y year to keep abreast of the changes and the risk attached to their personal

List of countries having signed the convention at the 29 October 2014

To date the Multilateral Competent Agreement has been signed by 51 countries. The Common Reporting

for Automatic Exchange of Information adopted by OECD is by itself not binding. The Multilateral Competent

Common Reporting Standard RS with the legal basis for information exchange (such as the

n Mutual Assistance in Tax Matters or a bilateral tax treaty).

Also before you where opening an offshore bank account for life. This will not be the case anymore with clients

y year to keep abreast of the changes and the risk attached to their personal

List of countries having signed the convention at the 29 October 2014

To date the Multilateral Competent Agreement has been signed by 51 countries. The Common Reporting Standard

Multilateral Competent

Common Reporting Standard RS with the legal basis for information exchange (such as the