Financial Crime World

US Account Reporting Requirements Triggered for Saint Kitts and Nevis Entities

The government of Saint Kitts and Nevis has introduced a new requirement for reporting certain financial accounts held by entities. As of June 30, 2014, all Preexisting Entity Accounts with balances exceeding $250,000 must be reviewed in accordance with specific procedures.

Entity Accounts Subject to Reporting

Only the following types of accounts will be treated as US Reportable Accounts:

  • Accounts held by one or more Specified US Persons
  • Accounts held by Passive NFFEs with Controlling Persons who are US citizens or residents
  • Accounts held by Nonparticipating Financial Institutions

Additionally, accounts held by Nonparticipating Financial Institutions require aggregate payments reporting to the Saint Kitts and Nevis Competent Authority.

Review Procedures

To determine whether an account is held by one of these entities, Reporting Saint Kitts and Nevis Financial Institutions must follow these procedures:

Determine Whether the Entity Is a Specified US Person

  1. Review information maintained for regulatory or customer relationship purposes to determine if the account holder is a US person.
  2. If the information indicates that the account holder is a US person, treat the account as a US Reportable Account unless:
    • You obtain a self-certification from the account holder
    • Or reasonably determine based on publicly available information that the account holder is not a Specified US Person

Determine Whether a Non-US Entity Is a Financial Institution

  1. Review information maintained for regulatory or customer relationship purposes to determine if the account holder is a Financial Institution.
  2. If the information indicates that the account holder is a Financial Institution, or if you verify their Global Intermediary Identification Number on the published IRS FFI list, then the account is not a US Reportable Account.

Determine Whether a Financial Institution Is a Nonparticipating Financial Institution

  1. Determine whether an account held by a Financial Institution is reportable under subparagraph 1(b) of Article 4 of the Agreement.
  2. If the account holder is a Saint Kitts and Nevis Financial Institution or other Partner Jurisdiction Financial Institution, no further review, identification, or reporting is required.

Determine Whether an Account Held by an NFFE Is a US Reportable Account

  1. Identify whether the account holder has Controlling Persons.
  2. Identify whether the account holder is a Passive NFFE.
  3. Determine whether any of the Controlling Persons of the account holder is a US citizen or resident.

Conclusion

The new reporting requirements aim to ensure compliance with international standards for transparency and cooperation in tax matters. Financial institutions are advised to review their accounts and take necessary steps to comply with the new regulations.