02.05 – Non-Participating Financial Institutions (NPFIs)

A Non-Participating Financial Institution (NPFI) is a Financial Institution that is not FATCA compliant. This non-compliance arises either where:

  • the Financial Institution is located in a jurisdiction that does not have an Intergovernmental Agreement with the US, and the Financial Institution has not entered into a FATCA Agreement with the IRS, or,
  • the Financial Institution is classified by the IRS as being an NPFI following the conclusion of the procedures for significant non-compliance being undertaken. In this case, a UK Financial Institution will only be classed as an NPFI where there is significant non-compliance with the UK legislation and, after a period of enquiry, that non-compliance has not been addressed to HMRC’s satisfaction. In such circumstances, the UK Financial Institution’s details may be published electronically by the IRS and the Financial Institution will cease to be covered by the Agreement.

For further details about how to comply with the UK, legislation see Section 10.