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• I General

  • A Canada shall require that Reporting Canadian Financial Institutions apply the due diligence procedures contained in this Annex I to identify U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions.

• II Preexisting Individual Accounts

  The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by individuals (“Preexisting Individual Accounts”).

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  • B Review Procedures for Preexisting Individual Accounts with a Balance or Value as of June 30, 2014, that Exceeds $50,000  ($250,000 for a Cash Value Insurance Contract or Annuity Contract), but Does Not Exceed $1,000,000 (“Lower Value Accounts”)

    • 1 Electronic Record Search

      The Reporting Canadian Financial Institution must review electronically searchable data maintained by the Reporting Canadian Financial Institution for any of the following U.S. indicia:

      • a) Identification of the Account Holder as a U.S. citizen or resident;

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    • 4 Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this section, a Reporting Canadian Financial Institution is not required to treat an account as a U.S. Reportable Account if:

      • a) Where the Account Holder information unambiguously indicates a U.S. place of birth, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:

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        • (2) A non-U.S. passport or other government-issued identification evidencing the Account Holder’s citizenship or nationality in a country other than the United States; and

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  • E Additional Procedures Applicable to High Value Accounts

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    • 5 A Reporting Canadian Financial Institution must implement procedures to ensure that a relationship manager identifies any change in circumstances of an account. For example, if a relationship manager is notified that the Account Holder has a new mailing address in the United States, the Reporting Canadian Financial Institution is required to treat the new address as a change in circumstances and, if it elects to apply subparagraph B(4) of this section, is required to obtain the appropriate documentation from the Account Holder.

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• IV Preexisting Entity Accounts

  The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Preexisting Accounts held by Entities (“Preexisting Entity Accounts”).

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  • D Review Procedures for Identifying Entity Accounts with Respect to Which Reporting Is Required

    For Preexisting Entity Accounts described in paragraph B of this section, the Reporting Canadian Financial Institution must apply the following review procedures to determine whether the account is held by one or more Specified U.S. Persons, by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, or by Nonparticipating Financial Institutions:

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    • 2 Determine Whether a Non-U.S. Entity Is a Financial Institution

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      • b) If the information indicates that the Account Holder is a Financial Institution, or the Reporting Canadian Financial Institution verifies the Account Holder’s Global Intermediary Identification Number on the published IRS FFI list, then the account is not a U.S. Reportable Account.

    • 3 Determine Whether a Financial Institution Is a Nonparticipating Financial Institution Payments to Which Are Subject to Aggregate Reporting under Subparagraph 1(b) of Article 4 of the Agreement

      • a) Subject to subparagraph D(3)(b) of this section, a Reporting Canadian Financial Institution may determine that the Account Holder is a Canadian Financial Institution or other Partner Jurisdiction Financial Institution if the Reporting Canadian Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder’s Global Intermediary Identification Number on the published IRS FFI list or other information that is publicly available or in the possession of the Reporting Canadian Financial Institution, as applicable. In such case, no further review, identification, or reporting is required with respect to the account.

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      • c) If the Account Holder is not a Canadian Financial Institution or other Partner Jurisdiction Financial Institution, then the Reporting Canadian Financial Institution must treat the Account Holder as a Nonparticipating Financial Institution payments to which are reportable under subparagraph 1(b) of Article 4 of the Agreement, unless the Reporting Canadian Financial Institution:

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        • (2) In the case of a participating FFI or registered deemed-compliant FFI, verifies the Account Holder’s Global Intermediary Identification Number on the published IRS FFI list.

    • 4 Determine Whether an Account Held by an NFFE Is a U.S. Reportable Account

      With respect to an Account Holder of a Preexisting Entity Account that is not identified as either a U.S. Person or a Financial Institution, the Reporting Canadian Financial Institution must identify (i) whether the Account Holder has Controlling Persons, (ii) whether the Account Holder is a Passive NFFE, and (iii) whether any of the Controlling Persons of the Account Holder is a U.S. citizen or resident. In making these determinations the Reporting Canadian Financial Institution must follow the guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the order most appropriate under the circumstances.

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• V New Entity Accounts

  The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 (“New Entity Accounts”).

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  • C Subject to paragraph D of this section, a Reporting Canadian Financial Institution may determine that the Account Holder is an Active NFFE, a Canadian Financial Institution, or other Partner Jurisdiction Financial Institution if the Reporting Canadian Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder’s Global Intermediary Identification Number or other information that is publicly available or in the possession of the Reporting Canadian Financial Institution, as applicable.

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  • E In all other cases, a Reporting Canadian Financial Institution must obtain a self-certification from the Account Holder to establish the Account Holder’s status. Based on the self-certification, the following rules apply:

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    • 2 If the Account Holder is a Passive NFFE, the Reporting Canadian Financial Institution must identify the Controlling Persons as determined under AML/KYC Procedures, and must determine whether any such person is a U.S. citizen or resident on the basis of a self-certification from the Account Holder or such person. If any such person is a U.S. citizen or resident, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account.

• VI Special Rules and Definitions

  The following additional rules and definitions apply in implementing the due diligence procedures described above:

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  • C Account Balance Aggregation and Currency Translation Rules

    • 1 Aggregation of Individual Accounts

      For purposes of determining the aggregate balance or value of Financial Accounts held by an individual, a Reporting Canadian Financial Institution is required to aggregate all Financial Accounts maintained by the Reporting Canadian Financial Institution, or by a Related Entity, but only to the extent that the Reporting Canadian Financial Institution’s computerized systems link the Financial Accounts by reference to a data element such as client number or taxpayer identification number, and allow account balances or values to be aggregated. Each holder of a jointly held Financial Account shall be attributed the entire balance or value of the jointly held Financial Account for purposes of applying the aggregation requirements described in this paragraph 1.

    • 2 Aggregation of Entity Accounts

      For purposes of determining the aggregate balance or value of Financial Accounts held by an Entity, a Reporting Canadian Financial Institution is required to take into account all Financial Accounts that are maintained by the Reporting Canadian Financial Institution, or by a Related Entity, but only to the extent that the Reporting Canadian Financial Institution’s computerized systems link the Financial Accounts by reference to a data element such as client number or taxpayer identification number, and allow account balances or values to be aggregated.

  • D Documentary Evidence

    For purposes of this Annex I, acceptable documentary evidence includes any of the following:

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    • 2 With respect to an individual, any valid identification issued by an authorized government body (for example, a government or agency thereof, or a municipality), that includes the individual’s name and is typically used for identification purposes.

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• III Deemed-Compliant Financial Institutions

  The following Financial Institutions are Non-Reporting Canadian Financial Institutions that shall be treated as deemed-compliant FFIs for the purposes of section 1471 of the U.S. Internal Revenue Code:

  • A Financial Institution with a Local Client Base

    A Financial Institution that qualifies as a local FFI as described in relevant U.S. Treasury Regulations, applying subparagraphs A(1), A(2) and A(3) of this section in lieu of the relevant paragraphs in those regulations:

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    • 3 With respect to a Preexisting Account held by an individual who is not a resident of Canada or by an Entity, the Financial Institution must review those Preexisting Accounts in accordance with the procedures set forth in Annex I applicable to Preexisting Accounts to identify any Financial Account held by a Specified U.S. Person who is not a resident of Canada, by a Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not residents of Canada, or by a Nonparticipating Financial Institution, and must report such Financial Account as would be required if the Financial Institution were a Reporting Canadian Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account;

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  • D Sponsored Investment Entity and Controlled Foreign Corporation

    A Financial Institution described in subparagraph D(1) or D(2) of this section having a sponsoring entity that complies with the requirements of subparagraph D(3) of this section.

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    • 2 A Financial Institution is a sponsored controlled foreign corporation if:

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      • c) The Financial Institution shares a common electronic account system with the sponsoring entity that enables the sponsoring entity to identify all Account Holders and payees of the Financial Institution and to access all account and customer information maintained by the Financial Institution including, but not limited to, customer identification information, customer documentation, account balance, and all payments made to the Account Holder or payee.

    • 3 The sponsoring entity complies with the following requirements:

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      • c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect to the Financial Institution, the sponsoring entity registers the Financial Institution pursuant to applicable registration requirements on the IRS FATCA registration website on or before the later of December 31, 2015 and the date that is 90 days after such a U.S. Reportable Account is first identified;

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      • e) The sponsoring entity identifies the Financial Institution and includes the identifying number of the Financial Institution (obtained by following applicable registration requirements on the IRS FATCA registration website) in all reporting completed on the Financial Institution’s behalf; and

  • E Sponsored, Closely Held Investment Vehicle

    A Canadian Financial Institution satisfying the following requirements:

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    • 5 The sponsoring entity complies with the following requirements:

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      • c) The sponsoring entity identifies the Financial Institution in all reporting completed on the Financial Institution’s behalf; and

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• 2 For purposes of the exchange obligation in Article 2 of this Agreement, the information exchanged shall identify the currency in which each relevant amount is denominated.

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• 1 Treatment of Reporting Canadian Financial Institutions: Each Reporting Canadian Financial Institution shall be treated as complying with, and not subject to withholding under, section 1471 of the U.S. Internal Revenue Code if Canada complies with its obligations under Articles 2 and 3 of this Agreement with respect to such Reporting Canadian Financial Institution, and the Reporting Canadian Financial Institution:

  • a) identifies U.S. Reportable Accounts and reports annually to the Canadian Competent Authority the information required to be reported in subparagraph 2(a) of Article 2 of this Agreement in the time and manner described in Article 3 of this Agreement;

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• 4 Identification and Treatment of Other Deemed-Compliant FFIs and Exempt Beneficial Owners: The United States shall treat each Non-Reporting Canadian Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code.

• 5 Special Rules Regarding Related Entities and Branches That Are Nonparticipating Financial Institutions: If a Canadian Financial Institution, that otherwise meets the requirements described in paragraph 1 of this Article or is described in paragraph 3 or 4 of this Article, has a Related Entity or branch that operates in a jurisdiction that prevents such Related Entity or branch from fulfilling the requirements of a participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has a Related Entity or branch that is treated as a Nonparticipating Financial Institution solely due to the expiration of the transitional rule for limited FFIs and limited branches under relevant U.S. Treasury Regulations, such Canadian Financial Institution shall continue to be in compliance with the terms of this Agreement and shall continue to be treated as a deemed-compliant FFI or exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code, provided that:

  • a) the Canadian Financial Institution treats each such Related Entity or branch as a separate Nonparticipating Financial Institution for purposes of all the reporting and withholding requirements of this Agreement and each such Related Entity or branch identifies itself to withholding agents as a Nonparticipating Financial Institution;

  • b) each such Related Entity or branch identifies its U.S. accounts and reports the information with respect to those accounts as required under section 1471 of the U.S. Internal Revenue Code to the extent permitted under the relevant laws pertaining to the Related Entity or branch; and

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