BVI and United Kingdom – Competent Authority Agreement

Summary

This is the Competent Authority Agreement between the British Virgin Islands and the United Kingdom, signed 29 September 2016, which implements the 2013 UK BVI FATCA-style intergovernmental agreement (IGA). It sets out the detailed procedures, timing, format and safeguards for the automatic exchange of financial account information between the two Competent Authorities, and includes an Appendix setting out the transition from IGA reporting to the OECD Common Reporting Standard (CRS).

• Scope: Applies to Reporting BVI Financial Institutions and to entities treated as Non-Reporting Financial Institutions under Annex II of the IGA, including trustee-documented trusts, sponsored investment entities, sponsored closely held investment vehicles, investment advisors/managers, and collective investment vehicles.
• Exchange timing: Information under Article 2 of the IGA is to be exchanged automatically within nine months of the end of the relevant calendar year (2014 data by 30 September 2016); Annex III(D)(1)-(2) information within one year and nine months after the Relevant Reporting Period, and Annex III(E)(1) information within nine months (2014 data by 30 September 2016).
• Format and transmission: Article 2(2) information uses the FATCA XML Schema V1.1; other information uses a format agreed between the Competent Authorities. Exchanges occur via encrypted email or other secure electronic transfer, considered received on the date sent.
• Validation notices: The UK Competent Authority should notify the BVI Competent Authority of successful file validation or validation failure within thirty days of receipt.
• Remediation and enforcement: The BVI Competent Authority must take appropriate domestic measures to address errors or non-compliance notified by the UK; 2014 and 2015 are treated as a good-faith transition period for enforcement.
• Confidentiality: All exchanged information remains subject to the confidentiality and use protections of the TIEA, with both Competent Authorities maintaining appropriate data safeguards and notifying each other promptly of any actual or potential breach.
• Costs: Each Competent Authority bears its own ordinary administration costs unless otherwise agreed in writing; extraordinary costs are subject to consultation.
• CRS transition (Appendix 1): 2014 and 2015 data continue to be exchanged under the IGA (by 30 September 2016); 2016 data uses whichever of the IGA or CRS requires more reporting (exchange by 30 September 2017); from 2017 onward exchange follows the CRS once both jurisdictions confirm they have implementing laws in place; the IGA remains in force until 31 December 2018 to resolve queries on 2014-2016 data.

The Agreement is operative from its signing date (or the date BVI notifies it has implementing laws in place) and applies to information for prior calendar years too. It is intended to be discontinued automatically if the underlying IGA is terminated, and the Competent Authorities intend to make the Agreement itself publicly available.

Key obligations

• Reporting BVI Financial Institutions and specified Non-Reporting Financial Institutions must have information identified and reported to the BVI Competent Authority in time for exchange under the agreed schedule
• BVI Competent Authority must exchange automatically the Article 2 IGA information within nine months of the end of the relevant calendar year (2014 data no later than 30 September 2016)
• BVI Competent Authority must exchange Annex III(D)(1) and (2) information within one year and nine months after the end of the Relevant Reporting Period, and Annex III(E)(1) information within nine months of year end (2014 data no later than 30 September 2016)
• UK Competent Authority should notify the BVI Competent Authority of successful or failed file validation within thirty days of receipt
• BVI Competent Authority must take all appropriate domestic measures to address errors or non-compliance notified by the UK Competent Authority
• Each Competent Authority must notify the other promptly of any actual or potential breach of confidentiality protections or data safeguards
• For 2016 data, use whichever of the IGA or CRS produces the greater reporting requirement, with exchange no later than 30 September 2017
• From 2017 data onward, exchange must follow the CRS once each Competent Authority has notified the other that necessary implementing laws are in place

Applies to

Reporting British Virgin Islands Financial Institutions, Trustee-Documented Trusts, Sponsored Investment Entities, Sponsored Closely Held Investment Vehicles, Investment Advisors or Investment Managers, Collective Investment Vehicles, BVI Competent Authority (International Tax Authority), UK Competent Authority (HMRC)

Deadlines

• 30 September 2016: Deadline for exchange of 2014 calendar year information under Article 2 and Annex III(E)(1) of the IGA
• within nine months of the end of the calendar year: General deadline for automatic exchange of information under Article 2 of the IGA and Annex III(E)(1)
• one year and nine months after the end of the Relevant Reporting Period: Deadline for exchange of Annex III(D)(1) and (2) information
• within thirty days of receipt: UK Competent Authority should notify BVI of file validation success or failure
• within thirty days of a consultation request: Consultations on implementation, interpretation, application or modification of the Agreement should take place
• 30 September 2017: Deadline for exchange of 2016 data using the maximum of IGA or CRS requirements
• 2017 onward: Exchange to be made in accordance with the CRS once each Competent Authority has notified the other it has necessary implementing laws in place
• 31 December 2018: IGA to remain in force until this date to allow queries on 2014-2016 information to be resolved