FATCA Reporting - AML On-Line by CubeIQ Limited

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FATCA Reporting

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Foreign Account Tax Compliance Act - FATCA was enacted in 2010 by U.S. Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

More information:
U.S. Internal Revenue Service



Impact on Individuals
U.S. individual taxpayers must report information about certain foreign financial accounts and offshore assets on Form 8938 and attach it to their income tax return, if the total asset value exceeds the appropriate reporting threshold. Form 8938 reporting is in addition to FBAR reporting.
Information on FATCA for US Citizens that live and/or doing business outside US.
The document describes how US Citizens living or doing business outside US are affected by FATCA.



Impact on Financial Institutions
Foreign Financila Institutions
To avoid being withheld upon, a foreign financial institution may register with the IRS, obtain a Global Intermediary Identification Number (GIIN) and report certain information on U.S. accounts to the IRS.
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U.S. Financila Institutions
U.S. financial institutions and other U.S withholding agents must both withhold 30% on certain payments to foreign entities that do not document their FATCA status and report information about certain non-financial foreign entities.
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Impact on Governments
If a jurisdiction enters into an Intergovernmental Agreement (IGA) to implement FATCA, the reporting and other compliance burdens on the financial institutions in the jurisdiction may be simplified. Such financial institutions will not be subject to withholding under FATCA.
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Foreign Account Tax Compliance Act Compliance Requirement Support
Prime® Compliance Suite makes Due Diligence Easier. We have subject matter expertise on the Foreign Account Tax Compliance Act (FATCA) and its requirements for both our U.S. and non-U.S. clients.

While FATCA is primarily a tax law, it intersects with Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations. According to the IRS, your institution’s Know Your Customer (KYC) and Customer Identification Programs (CIP) may comply with the identification and verification-of-customers portion of FATCA.

The common theme of due diligence data collection in regulatory rulings makes Prime® Compliance Suite the perfect tool to help you meet current and future requirements.

Prime® Compliance Suite enables you to:

  • Manage and monitor your KYC/CIP data

  • Store documentation

  • Facilitate required electronic searches through our searchable database

  • Create customer acceptance items and set up ongoing review periods

  • Avoid potential penalties and negative press by remaining in compliance


FATCA Reporting Application on Prime® Compliance Suite
CubeIQ’s FATCA reporting module is an add-on to PCS™ FATCA enhanced EDD Reporter™ module and it is a full web based application with multiple functions such as:

  • Search (Menu Search/Search Customers): In the search page operator selects the types of customers to be included in FATCA report. The operator can select from the available options which are:  (a) Individuals, (b) Beneficiaries (Business), (c) All and then click the submit button. The application executes the search and then redirects to the results page.

  • Results (Menu Search/Search Results): In results page, the database search output is presented in a list. Each list entry is accompanied by a selection box. Operators can select which of the list entries will be included in the FATCA report. From the available options which are: (a) One list entry, (b) Multiple list entries, (c) All entries and then clicks the submit button. The application executes the selection and then redirects to the report page.

  • Report (Menu Reports/Report Customers): In report page the operator can view the selected entries to be reported and generate the FATCA report for previously selected customers. When the operator clicks the submit button the application generates the FATCA report which is a set of XML type files based on FATCA XML specification.

  • Report History (Menu Reports/Report History): In report page the operator can view the generated FATCA reports with details on each report.


CubeIQ's FATCA Reporting Application

CubeIQ’s FATCA reporting application is available as add-on module on Prime Compliance Suite – PCS™ version 9.1.0 and will be available with newer PCS™ versions. However it will not be available with any version prior to 9.1.0.

FATCA 2015

CubeIQ’s FATCA Reporting module has been developed based IRS’ FATCA XML v1.1 User Guide, Publication 5124 (6-2014), Catalog Number 65544H, Department of the Treasury, Internal Revenue Service specification document.


FATCA 2017

Today CubeIQ's FATCA Reporting module has evolved to FATCA-2 which is based on IRS' FATCA XML Schema v2.0 User Guide, Publication 5124 (4-2017) Catalog Number 65544H Department of the Treasury, Internal Revenue Service specification document.


Important: Beginning January 16, 2017, all FATCA Reports (new, nil, corrected, void and amended) must be created using the FATCA XML Schema v2.0. The FATCA XML Schema v2.0 replaced v1.1 and the FATCA Notification XML Schema v2.3 replaced v2.2. All International Data Exchange Service (IDES) users are required to submit FATCA Reports using v2.0 because v1.1 is not supported.


CubeIQ's FATCA Reporting Application In Cooperation With Other Systems


CubeIQ's FATCA-2 Reporting Application is the evolution of FATCA 1.1 which from a PCS™ module evolved to an autonomous web based data management and reporting application capable to retrieve data from different sources such as Prime Compliance Suite - PCS™ database, customer flat data files and any other banking or financial software application database managing customer data, provided that the required data structure – table/fields are disclosure and read access is granted.


CubeIQ's FATCA-2 reporting features:
  1. Autonomous web based software application with its own database schema.
  2. Multiple users support. Uses can reside in different departments within the financial institution.
  3. Connection to different sources such as  Prime Compliance Suite - PCS™ database, flat files and any other software applications’ database provided that the required data structure – table/fields are disclosure and read access is granted for extraction of customers with US status (FATCA Status).
  4. Powerful search facility on the US citizens’ dataset. Users can search using the majority of personal data field (First Name, Family Name, Address, ID Type and ID Number and other) and customer ID. Additional search fields can be added as long as they are included in the database.
  5. Capability to review the data of the extracted customers with US status (FATCA Status).
  6. Users can choose to generate FATCA reports for all extracted customers or for one of the extracted customer or for a group of the extracted customers.
  7. Modern and intuitive user interface which guides the users how to use the system with a “Wizard” based mechanism.
  8. “What if” Operation: Users can operate the system up to the point to finalize FATCA reports. If the users do not finalize – generate the reports all generated data are deleted.
  9. Audit: FATCA reports that a generated are stored in two ways: (a) the actual XML files are stored in a system’s directory tagged with the creation date and (b) the data of the reports in a system’s database table tagged also with the creation date. This is a very powerful audit trail feature.
  10. A number of other features that enhance security, auditability and ease of use.

FATCA Reporting Module Menu Items
FATCA Report Generation Process


For more information about FATCA-2 Reporting Application or Prime® Compliance Suite and how it covers FATCA compliance requirement contact us.

AML On-Line by CubeIQ Ltd. :: www.cubeiq.gr

 
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