The CRS law is not the same in all countries, it includes in addition to laws, IT systems and many dedicated resources and in fact the Standard itself continues to undergo changes as it progresses. However, we can identify some points that are always in common and that are the backbone of the CRS. Financial Institutions must report reportable account information to their tax authority, which will be in charge of sending the information to the counterparties via special software. The Financial Institutions that must report are the following:

  1. Depository entities (Banks, brokers, etc.)
  2. Insurance companies
  3. Custody Entities (Trusts and Foundations, among others)
  4. Investment companies, these are divided into two:
    1. Financial advisers who manage accounts,
    2. Companies whose assets are made up of a Portfolio of assets managed by type a advisers.

Of the 4 types mentioned, type 1, 2 and 4a entities are always regulated by local Regulators who will ensure that the information is obtained. The great unknown today is in 3 and 4b, which are not always regulated and nobody forces them and pressures them to report… An analysis must be done in each jurisdiction to know how reporting will work in these cases.

There are countries like New Zealand where the responsibility for reporting in the case of Trusts was left to the professional Trustees with severe penalties for non-compliance and made compliance with Trusts reporting in 2017 highly successful.

But, what is happening with trusts, foundations and companies incorporated in Panama, Bahamas, BVI, Belize, etc. who manage assets and fall under the definition of points 3 or 4b and should report? It is already foreseen in local legislation that these entities must register and report, but until in practice there is no effective compliance obligation mechanism, it will be minimal. How long before a full implementation? The future is uncertain, only whoever has a crystal ball can know it …

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