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Short news and ideas

Where does the signing of information exchange agreements currently stand?


25/09/2015

We introduced this topic in the previous issue of the LAVECO Newsletter, reporting on where the signing of information exchange agreements currently stands. The last quarter has seen further agreements signed between the 90 or so countries which have signed up, or agreed to sign up to the system. You can follow the exact list of countries on the dedicated blog dealing specifically with this topic on the laveco.com website.

A significant development since our last Newsletter has been the publication on the OECD website of the Handbook designed primarily to offer guidance to the banks on the principles which should be followed in adapting their internal regulations and developing the technical background to cope with the information exchange system. Having read through the entire handbook, we have been able to draw 2 important conclusions:

The guidelines set down in the handbook are not hard and fast rules. The banks have been given a significant level of independence, and in numerous cases it is left up to them to decide what conditions they place on, for example, client identification, and what documents they accept from clients and when in the case of such issues as determining tax residence status.

This is obviously designed to place the responsibility on the banks, who, presumably will interpret the regulations differently. “The more banks involved, the more interpretations there will be” is probably the best way to describe the situation. The banks’ lawyers are likely to apply the guidelines differently, so we should not be surprised if we come across different regulatory systems even when dealing with banks from the same country.

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