Automatic exchange of information (FATCA and CRS) for the 2nd line of defence - Focus on private banking

The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard constitute key tax transparency regulations that came into force in 2014 and 2016, respectively. Both regulations have been transposed into the Luxembourg laws and have been amended by the law of 18 June 2020 known as "the FATCA and CRS governance law".

Since January 2021, all Luxembourg Financial Institutions ("FIs") must establish a FATCA/CRS compliance programme, encompassing various requirements such as IT infrastructure, written policies and procedures, and oversight in case of delegated functions. A second crucial pillar of this compliance programme requires FIs to implement proportionate and effective controls to ensure compliance with FATCA and CRS due diligence and reporting obligations.

By the end of this training, participants will be able to:

• explain the purpose and the mechanism of the FATCA and CRS rules and their general impacts (incl. the FATCA and CRS governance requirements);
• understand the main synergies and differences between FATCA and CRS;
• determine how to review self-certification from individual and corporate investors (including U.S. forms);
• understand the different FATCA and CRS statuses that funds can possess;
• explain the procedures for identifying controlling persons of entities;
• list the main elements to be reported and the associated timeline;
• have a clear action plan for establishing an efficient FATCA and CRS operating model;
• explain the main related risks.

This training encompasses all essential FATCA and CRS key principles, illustrated with concrete examples, along with best-market practices to establish an efficient FATCA/CRS operating model and mitigate challenges faced by financial institutions (FIs). Additionally, the training offers insights into recent regulatory updates (if any) and outlines the controls and inquiries conducted by the Luxembourg tax authorities.

This module, tailored for the private banking industry, will also address the FATCA/CRS classification applicable to various types of entities that may open a bank account.

• FATCA/CRS – Introduction
• Main obligations under FATCA and CRS for FIs
• FATCA and CRS governance in the banking industry
• Legal entity classification
• New clients onboarding process
• Reporting

This training is coordinated by Pierre Kirsch, Partner at PwC Luxembourg.

Pierre, Tax Partner, is an authorised manager of the PFS Tax Information Reporting department, overseeing all services related to tax transparency and automatic exchange of information.

With over 27 years of experience in the private banking and asset management industries in Luxembourg, Pierre has developed a profound understanding of their internal processes.

He has conducted various tax transparency analyses of the private and corporate client base of several major financial institutions in Luxembourg and abroad.

The primary objectives of these analyses were to assess the level of risk posed by non-tax compliant clients and to formulate appropriate and measurable action plans.