05.05 – Electronic Searches and Lower Value Accounts

A Financial Institution must review it’s electronically searchable data for any of the following US indicia.

  • Identification of the account holder as a US citizen or resident.
  • An unambiguous indication of a US place of birth.
  • Current US mailing or residence address (including PO Box).
  • Current US telephone number.
  • Standing instruction to transfer funds to an account maintained in the US.
  • Current effective power of attorney or signatory authority granted to a person with a US address.
  • An ‘in care of’ or ‘hold mail’ that is the sole address the Financial Institution holds for the account holder. An ‘in care of’ or ‘hold mail’ address is not treated as US indicia for electronic searches, but is a US indicia where a review of paper records is required.

Where none of the indicia listed above are discovered through an electronic search, no further action is required in respect of Lower Value Accounts, unless there is a subsequent change of circumstance that results in one or more US indicia being associated with the account or Account holder. Where that happens, the account will become reportable unless further action is taken by the Financial Institution to attempt to cure or repair the indicia. (See Sections 5.6 to 5.11)

A Financial Institution will not be treated as having reason to know that an account holder’s status is incorrect because it retains information or documentation that may conflict with its review of the account holder’s status if it was not necessary under the procedures described in this section to review that information or documentation.

Example 1

For Lower Value Accounts, where only an electronic search is required, and no US indicia are identified, the Financial Institution will not have reason to know that the account holder was a US Person even if it held a copy of a US passport for the account holder. This applies only if the Financial Institution was not required to or had not previously reviewed that documentation or information.

Where a Financial Institution has started its review, found indicia and attempted to verify or cure the indicia by contacting the account holder, but the account holder does not respond, the account should be treated as reportable 90 days after initiating contact. The 90-day limit is to allow the account holder sufficient time to respond to requests for information and does not alter the timings set out in Section 5.18.

Qualified Intermediaries

A UK Financial Institution that has previously established an account holder’s status in order to meet its obligations under a qualified intermediary, withholding foreign partnership or withholding foreign trust agreement, or to fulfil its reporting obligations as a US payor under Chapter 61 of the IRS Code, can rely on that status for the purposes of the Agreement where the Account Holder has received a reportable payment under those regimes. The Financial Institution is not required to perform the electronic search in relation to those accounts. It will, however, have to apply the appropriate due diligence procedures to all other Pre-existing Individual Accounts it maintains.