04.09 – Confirming the Reasonableness of Self Certification

A Financial Institution receiving a self certification must consider other information it has obtained concerning the individual to check whether the self certification is reasonable.

Example 1

Where an account holder provides one of the US indicia, such as a US address, to the Financial Institution but then provides a self certification confirming they are not US resident for tax purposes, the Financial Institution would need to make further enquiries to establish whether or not the self certification is reasonable.Where a Financial Institution relies on AML procedures performed by other parties and no self certification is provided directly to the Financial Institution, the Financial Institution may request that the third party should obtain a self certification for the purposes of the legislation. The third party should then confirm the reasonableness of the self certification based on information that it has obtained.For the avoidance of doubt, where self certification is received directly by the Financial Institution, there is no requirement to ensure that any third party that carried out AML/KYC procedures has confirmed its reasonableness. The Financial Institution is required to confirm this based on any other information it alone has obtained or holds. So where a Financial Advisor (FA) has performed AML checks, the Financial Institution is not deemed to have seen any documentation the FA has seen, unless the documentation is also provided to the Financial Institution.

Example 2

A Financial Institution has received a New Account opening instruction from an individual (this may have been by telephone) which includes a self certification regarding the account holder’s residence status. The Financial Institution has performed AML procedures by checking the identity of the individual (name, address and date of birth) against the records of, for example, a credit reference agency. The check confirmed the identity of the individual.The Financial Institution can satisfy its obligations under the legislation by confirming the reasonableness of the self certification against other information in the account opening instruction and any other information it has on the individual. Where no other information exists, the reasonableness is confirmed based on information in the account opening instruction alone.If the account opening instruction is received by phone, the account holder receives paperwork that includes their response to the self certification question and other questions asked. The account holder is requested to contact the Financial Institution if any of the information is not correct within a specified period (say, 30 days). Provided the Financial Institution does not receive any other information from the account holder within the specified time, and provided the self certification is otherwise reasonable, then the requirements are met.

Example 3

A Financial Institution has received New Account opening documentation from an individual who has been advised by a Financial Adviser (FA). The Financial Institution is unaware of any previous contact with the individual and has not delegated the FA to carry out the FATCA due diligence procedures on its behalf. However, the Financial Institution can rely on the introducing FA to perform the necessary AML checks to identify the individual and is provided with confirmation by the FA that they have done so.The Financial Institution must, therefore, ensure it identifies the account holder’s status for FATCA purposes. The documents received regarding the account opening contains information about the individual (name, address, date of birth, contact details including telephone number and email address), and a self certification that the individual is not resident in the US for tax purposes and is not a citizen of the US.The Financial Institution can satisfy its requirements under the Agreement by confirming the reasonableness of the self certification against other information contained in the account opening instruction and any other information it has on the individual. Where no other information exists the reasonableness is confirmed based on the information in the account opening instruction alone. The Financial Institution is not deemed to have seen any documentation the FA has seen.

Example 4

As per example 2, but the Financial Institution has delegated the FA to perform the FATCA due diligence procedures on its behalf.The introducing FA carries out the AML checks and obtains a self certification from the individual confirming their FATCA status. The Financial Institution can satisfy its requirements under the Agreement by obtaining confirmation from the FA that they have confirmed the reasonableness of the self certification.

Example 5

As per example 1, but the individual has been introduced by an FA, although the Financial Institution has not placed reliance on the FA’s AML procedures and instead has performed its own AML procedures.The Financial Institution can satisfy its requirements under the Agreement by confirming the reasonableness of the self certification against other information contained in the account opening instruction and any other information it has on the individual. Where no other information exists the reasonableness is confirmed based on the information in the account opening instruction alone.