On June 3, 2021, the Cayman DITC published an Updates Bulletin that includes details related to the Foreign Account Tax Compliance Act (FATCA), the Common Reporting Standard (CRS), and Economic Substance (ES) Reporting. In addition to minor reporting updates, the DITC stresses the importance of compliance in this area, as certain defenses previously accepted from FIs will not be allowed this year. FIs should strongly consider revisiting their FATCA and CRS classifications and processes for reporting – including seemingly simple specifics such as successful login information.
The DITC Portal is open for 2020 FATCA XML uploads. Although there are no changes to the schema itself, FIs should be using the IRS codes for populating the TIN field where they do not already have one on file. By now, FIs are aware that they must report a TIN and date of birth (for individuals or humans) for each Account Holder and Controlling Person. They cannot excuse new accounts from this process, because FIs are required to collect TINs and dates of birth in the self-certification. The only exception would be where a Reportable Jurisdiction does not issue TINs or does not require TINs to be collected.
The DITC has no plans to offer extensions to the 2020 reporting deadline. FIs should report as early as possible to meet the July 31 deadline for 2019 and 2020 CRS and FATCA Reporting. This year, FIs will not be able to use the inability to log into the DITC portal as a defense to submit reporting.
FIs must complete a CRS Filing Declaration and CRS Compliance Form if they have CRS reporting obligations. This includes Trustee Documented Trusts. If they do not submit these filings by their deadlines, then it is considered an offence under Part 2 of the Regulations. The deadlines remain July 31, 2021 for the 2019 and 2020 CRS Filing Declaration and September 15, 2021, for the 2019 and 2020 CRS Compliance Form.
With respect to the CRS Compliance Form, the DITC has published the bulk upload CSV template for large FI users as an alternative to the smartform version, which is better suited for small FI users. FIs using the CSV file should review the Explanatory Note that accompanies the template and Section 5.F. of the CRS Guidelines prior to preparing this file. There are certain changes from the smartform to the CSV file related to the ordering and length of data. Although the function to submit the CSV file to the Portal is not available, the DITC expects this to be ready soon and suggests that FIs check the Portal regularly for updates.
Confirm logins and DITC correspondences! As a reminder, FIs should confirm that all DITC email addresses and IP address (220.127.116.11) are whitelisted, so that they do not miss communications from any of the following: firstname.lastname@example.org, CaymanAEOIPortal@gov.ky, CaymanESPortal@gov.ky, DITC.Compliance@gov.ky. Also related to activation e-mails, IT Teams should review their e-mail connectivity logs to determine any delivery failures. FIs should use the recommended DITC supported browsers which include Google Chrome, Firefox. This is important, because FIs cannot use the inability to log in and submit reporting as a defense for a failure to submit reporting.
Confirm FI Classifications! The DITC has stated that each Cayman Islands company, partnership and trust, and its directors or equivalent fiduciaries, must have a correct classification for purposes of FATCA and CRS Regulations, whichever applies. The DITC intends to cross reference CRS and FATCA notification data with other data sources, such as Economic Substance notifications (“ESNs”), CIMA licenses and registrations, General Registry nature of business classifications, and the IRS GIIN registration list. FIs that do not comply will be deemed to have failed to notify the DITC of their correct classification under the Regulations. The DITC will consider appropriate compliance and enforcement action where mis- classification is discovered. Each FI and its directors, or equivalent fiduciaries, are responsible for compliance with the Regulations and may be liable to administrative penalties or other sanctions in the event of non-compliance.
For additional details regarding FATCA, CRS, and ES Reporting, please review the full DITC Update. https://www.ditc.ky/wp-content/uploads/news-updates.pdf