| A. | The following rules and administrative procedures apply to ensure effective implementation of, and compliance with, the reporting and due diligence procedures set out above. |
| (i) | a person enters into any Arrangement or Structure as defined in subparagraph A(1) or (2) of Section XI; and |
| (ii) | the main purpose, or one of the main purposes, of the person in entering into the Arrangement or Structure as defined in subparagraph A(1) or (2) of Section XI is to avoid any obligation under the Common Reporting Standard, |
these Regulations are to have effect as if the Arrangement or Structure as defined in subparagraph A(1) or (2) of Section XI had not been entered into.
| (b) | If a Non-Reporting Financial Institution is no longer a Non-Reporting Financial Institution as it no longer complies with the requirements for a Non-Reporting Financial Institution under paragraph B of Section VIII or Annex II, it becomes a Reportable Financial Institution from the moment that it no longer complies with such requirements. |
| (c) | If an Excluded Account is no longer an Excluded Account as it no longer complies with the requirements for an Excluded Account under subparagraph C(17) of Section VIII or Annex II, it becomes a Reportable Account from the moment that it no longer complies with such requirements. |
| (2) | Sanctions for non-compliance in providing information to a Reporting Financial Institution |
Non-compliance with any obligation under these Regulations includes non-compliance as referred to in section 26(4) of the Act by:
| (a) | a Reportable Person that is an Account Holder, |
| (b) | if the Reportable Person is an entity, any Controlling Person(s) of that entity; or |
from whom a Reporting Financial Institution requires information, a document or thing in order in order to obtain and report the information required under Section I and to comply with any other requirement of these Regulations.
| B. | Suspension or closure of Financial Account for failure to provide a self-certification |
| (1) | If a self-certification that is to be obtained or is otherwise required under any provision of these Regulations, is not provided by an Account Holder or Controlling Person or if the self-certification provided does not meet the reasonableness test for a valid self-certification, a Reporting Financial Institution must— |
| (a) | not complete the account opening procedure, if it is unable to obtain a valid self-certification on day one of the account opening and the Day Two Process is not permitted; |
| (b) | suspend transactions on the Financial Account, where the Day Two Procedure is permitted and the self-certification is not provided within the 90-day period from the date on which it is to be obtained or the date that it is established that a self-certification is required, or if the self-certification does not meet the reasonableness test for validation by the Reporting Financial Institution during this period; and |
| (c) | report the Financial Account in accordance with subparagraph (Abis) of Section VII if the Reporting Financial Institution has not yet done so, in respect of each Reporting Period that such self-certification remains outstanding and continue to take all reasonable steps to obtain and validate the self-certification. |
| (2) | A Reporting Financial Institution may close the Financial Account if, despite all reasonable efforts by the Reporting Financial Institution, no self-certification is received or meets the reasonable test and the account presents a risk of being used to evade tax, avoid reporting of the account in accordance with the CRS or otherwise frustrate the purposes of the CRS. |
| (3) | For purposes of this subparagraph, “suspension” means steps taken by the Reporting Financial Institution to limit transactions and may, where applicable, result in increasingly restrictive limitations. |
| (4) | If a self-certification in respect of a Financial Account is outstanding on 31 May 2021, the 90 day period referred to in subparagraph B(1) commences on 1 June 2021. |
