FATCA: “COPA” and “PERIODIC CERTIFICATIONS” due by July 1, 2018, will have, in effect, a 3 …


On March 19, 2018, IRS released “Draft FATCA Certification Questions” (https://www.irs.gov/businesses/corporations/draft-fatca-certifications)  to be completed by the Responsible Officer (RO) of a Participating Foreign Financial Institution (FFI) or Reporting Model 2 FFI.    The FATCA certifications are known as COPA (for certification of an Entity’s preexisting accounts) and Periodic Certification (which relates to the Entity’s compliance with various FATCA requirements), and they are due on July 1, 2018.  The July 1st deadline follows the completion of the third full calendar year after the date the Entity registered and received a Global Intermediary Identification Number (GIIN). 

IRS stated that: “The update to the FATCA Registration Portal containing FATCA certifications will not be available prior to July 2018. For entities that have certifications due by July 1, 2018, please note, any Responsible Officer (RO) that is required to certify will have no less than 3 months from deployment of the certifications on the FATCA Registration Portal to submit them”.   This means that:

·    The update to the FATCA Registration Portal containing FATCA Certifications will NOT be available prior to July 2018.

·    The RO that is required to file certifications for the Entities that are due by July 1, 2018, will have no less than 3 months to submit them on the FATCA Registration Portal (in effect, a 3month Extension).

·    The IRS released the Draft FATCA Certification Questions in an effort to assist the ROs in preparing to complete the FATCA certifications.                   

Who is the RO?

The individual that is identified as the RO and/or the delegated Points of Contact (POC) are the only individuals that are authorized to receive emails from the IRS related to the FFI’s FATCA account.  The RO is the person at an FFI that has to establish and maintain a FATCA compliance program, as well as certifying compliance with FATCA to the IRS, or notifying the IRS if the FFI has any reportable material failures or reportable non-compliance with FATCA requirements. 

COPA (Certification of Preexisting Accounts) Draft Certification Questions are for:

·    Participating Foreign Financial Institutions (Including Reporting Model 2 FFIs)

·    Consolidated Compliance Groups

·    Registered Deemed-Compliant FFIs – Local FFI

·    Registered Deemed-Compliant FFIs – Restricted Funds

·    Sponsoring Entity of Sponsored FFIs

Periodic Certification Draft Questions are for:

·    Participating Foreign Financial Institutions (Including Reporting Model 2 FFIs)

·    Consolidated Compliance Groups

·    Registered Deemed-Compliant FFIs – Local FFI

·    Registered Deemed-Compliant FFIs – Non-reporting Member of PFFI

·    Registered Deemed-Compliant FFIs – Qualified Collective Investment Vehicle

·    Registered Deemed-Compliant FFIs – Qualified Credit Card Issuer or Servicer

·    Registered Deemed-Compliant FFIs – Restricted Funds

·    Sponsoring Entity of Sponsored FFIs

·    Sponsoring Entity of Sponsored Direct Reporting NFFEs

·    Sponsoring Entity of Sponsored FFI and Sponsored Direct Reporting NFFEs

·    Trustee Documented Trusts

·    Direct Reporting NFFEs

Will you be READY?

The RO has many responsibilities and obligations and is the only person authorized to act on behalf of the FFI to represent the FATCA status of the FFI.   Certifying FATCA compliance of the FFI to the IRS and notifying the IRS of material failures or non-compliance with FATCA requirements is a daunting task. The RO has the responsibility of ensuring and collecting supporting evidence to back up the certification to the IRS.

Don’t be a Victim of Your Own Making

An FFIs compliance status with FATCA is critical to the FFIs ability to continue operating as an “on-going concern” in the financial industry.  FFIs non-compliant with FATCA risk having payments withheld by counterparties, banking and or correspondent relationships terminated and have the FFI classified as a “Non-Compliant” entity. 

FFIs and ROs ought to consult specialized FATCA training providers that have experience with the IRS and are fully knowledgeable on the U.S. Internal Revenue Tax Code. 

via Google Alert – FATCA http://bit.ly/2GEcifu