Financial Crime World

Netherlands Antilles: Revised Financial Crime Reporting and Disclosure Requirements Take Effect

Changes to FATCA and CRS Guidance Effective June 23rd

The Dutch Ministry of Finance has published amendments to the country’s guidance on the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). These changes, which are effective retroactively as of June 23rd, were based on recommendations from the OECD Global Forum.

Key Changes for Non-Profit Organizations

  • Classification change: Non-profit organizations that were previously classified as Active Non-Financial Entities (NFEs) will now be considered Professionally Managed Investment Entity FIs.
  • Registration and reporting obligations: These entities must register with the IRS, incorporate customer due diligence processes, and update their reporting obligations.

Changes for Family-Owned Entities

  • Classification review: Family-owned entities that were previously classified as Passive NFEs for both FATCA and CRS should review their entity classification to see if they require any adjustments under the new guidance.
  • Registration and reporting obligations: If they now classify as FIs, they will need to register with the IRS, incorporate customer due diligence processes, and update their reporting obligations.

Changes for STAKs

  • No longer considered NFEs by default: STAKs (Stichting Administratiekantoor), which were previously classified as NFEs by default for CRS purposes, will no longer be automatically considered as such.
  • FI qualification criteria: STAKs resident in the Netherlands will only qualify as FIs if they administer financial assets on behalf of certificate holders and execute voting rights.

Clarification on Dual Tax Residency Status

The revised guidance also clarifies that an FI’s dual tax residency status should not affect its reporting obligations under CRS.

Financial Institutions’ Requirements

Financial institutions in the Netherlands Antilles must be prepared to receive updated self-certifications from non-profit organizations, family-owned entities, and STAKs as a result of these changes. While the additional reporting is expected to be minimal, financial institutions must ensure they have adequate procedures in place to comply with the revised requirements.