FATCA Regulatory Help Desk — Guidance on FFI Counterparty Relationships

Several FFIs inquired about their relationships with counterparties such as a "Remitter," a "Correspondent," or a "Provider" through which transactions impacted by FATCA are completed. Foodman provided the following guidance through the Regulatory Help Desk:

• It is only necessary to implement FATCA diligence, documentation and reporting when a Remitter, Correspondent or Provider has a "Liability" account.
• Remitters can be participating FFIs in FATCA (with their GIIN) or they can be exempt from being considered Financial Institutions for not maintaining "Liability" accounts for third parties.
• In FATCA, you only have to document those who physically have an account with the FFI.
• If you have an account with the bank, it is the Remitter, which must complete the W8BEN-E (if not North American) and the W9 (if incorporated in the U.S.).
• If not North American and classified as a participating FFI, include the GIIN. It is recommended that the Bank validate this GIIN every six months against the IRS list.
• If not North American and claiming to be exempt from being considered an FFI, the entity must choose its FATCA classification—most likely "Active NFFE." The bank's salesperson should ask for an explanation of the exemption upon account opening and document the reason in the Remitter's file.
• For a correspondent bank account, the W9 is requested if it is a North American Bank, reported only if the W9 is not exempted. If not American, document via W8BEN-E. As with Remitters, the GIIN must be validated every 6 months.
• Suppliers are treated under FATCA only when they have an account with the Bank. Documented the same way—W9 (if American) and W8BEN-E (if non-American). Providers are typically classified as "Active NFFE."
• In all cases, not having to be documented and reported under FATCA does not mean AML regulation on these relationships is not required.