06.04 – Identification of New Individual Accounts

For accounts that are not exempt, and for accounts that previously qualified for the threshold exemption, but now have a balance or value above the threshold limit, the Financial Institution must undertake the following procedures to determine the account holder’s status.

  • Obtain a self certification (See Section 4.8) that allows the Financial Institution to determine whether the account holder is US tax resident; and
  • Confirm the reasonableness of this self certification based on any information the Financial Institution holds or obtains in connection with the opening of the account, including any documentation obtained for AML/KYC or other regulatory procedures.

For these purposes, a US citizen is considered to be resident in the US for tax purposes even where they are also tax resident in another country.

In the absence of a valid self certification being provided by the account holder, the account would become reportable.

If the information provided during the account opening process contains any of the indicia described in Section 5.5, then the account will become reportable unless further action is taken by the Financial Institution to attempt to cure or repair the indicia. (See Sections 5.8 to 5.11).

The identification of these accounts should be completed as soon as practicable after the account has been opened. The expectation would be that this would follow AML/KYC time limits. For accounts that were previously exempt because of the threshold exemptions being applied but no longer are, the Financial Institution must determine the account holder’s status in sufficient time to report the account, if necessary, for the year in which the account ceased to be exempt.