Financial Institutions Must Review Customer Data for Indicia of Foreign Residency

The Tax Information Authority (International Tax Compliance) has introduced a new regulation to ensure that financial institutions accurately identify customers who are residents in foreign jurisdictions.

Enhanced Review of Customer Data

Under the new rules, financial institutions must conduct an enhanced review of their customer data to identify any indicia of foreign residency. This includes:

• Checking for addresses
• Verifying phone numbers
• Reviewing other information that may indicate a customer’s residence status

Frequency of Review

The regulation requires financial institutions to review their customer data every five years, or whenever there is a change in circumstances that could affect a customer’s residency status.

Documentation Requirements

In addition to the enhanced review, financial institutions must also obtain documentation from customers that confirms their residency status. This includes:

• Passports
• ID cards
• Proof of address

Purpose of the Regulation

The regulation aims to prevent financial institutions from failing to report foreign accounts held by residents in other jurisdictions. This is essential for ensuring compliance with international tax laws and regulations.

“We are committed to ensuring that our customers’ information is accurate and up-to-date,” said a spokesperson for the Tax Information Authority. “This new regulation will help us to better identify and report foreign accounts, which is essential for maintaining compliance with international tax laws.”

Scope of the Regulation

The regulation applies to all financial institutions, including:

• Banks
• Insurance companies
• Other financial institutions that provide services to customers

Conclusion

In conclusion, financial institutions must conduct an enhanced review of their customer data to identify any indicia of foreign residency. This includes reviewing addresses, phone numbers, and other information that may indicate a customer’s residence status. Financial institutions must also obtain documentation from customers that confirms their residency status.