CRS Enforcement Guidelines (Version 1.4, March 2023)

Summary

This is the Cayman Islands Tax Information Authority's (TIA/DITC) internal-but-published guidance on how it enforces the Common Reporting Standard (CRS) Regulations through administrative penalties. Version 1.4 (March 2023) replaces the August 2022 version and sets out the process the Authority follows when investigating non-compliance by Cayman Financial Institutions, deciding whether to impose penalties, issuing breach and penalty notices, and handling appeals and payment. The Guidelines are not legally binding but describe how the Authority will exercise its discretion under the CRS Regulations.

Penalty Framework (Regulation 24)

• Primary Penalty: Up to $50,000 for a body corporate or individuals forming part of an unincorporated Cayman Financial Institution, or up to $20,000 for other offenders.
• Continuing Penalty: $100 per day for ongoing contraventions.

Criteria for Deciding Penalties

• Seriousness of the contravention.
• Intent or negligence.
• Post-breach conduct.
• Compliance history.

These criteria are listed in order of importance and are weighed by the Authority when deciding whether to penalise and how much.

Process, Appeals and Payment

• Investigatory process: The Authority investigates suspected non-compliance by Cayman Financial Institutions.
• Breach notices: A breach notice may be issued requiring the party to remedy the breach.
• Representations: A party can contest a proposed penalty by making representations.
• Right of appeal: A party has the right of appeal to a court, with an automatic stay of the penalty pending appeal.
• Interest: Interest accrues on unpaid penalties.
• Payment instructions: Detailed payment instructions are provided, including wire transfer details and required compliance reference information.

The Guidelines apply to all persons within the scope of the Authority's CRS compliance and enforcement powers, principally Cayman Financial Institutions (both Reporting and Non-Reporting FIs) and their directors, managers, or other representatives, who may face imputed liability. The Guidelines do not cover criminal offences under the TIA Act, which are instead referred to the Director of Public Prosecutions.

Key obligations

• A party that receives a Breach Notice must remedy the identified breach as required under Part 4.2 of the Guidelines.
• A party wishing to contest a proposed penalty or its amount must submit a representation to the Authority in accordance with Part 5.1.
• A party may appeal to a court against imposition or amount of a penalty within 60 days of the date of the Penalty Notice (or a later period the court allows).
• A party against whom a penalty is imposed must pay the penalty (and any accrued interest) in accordance with the payment instructions in Appendix A, using the correct Compliance Reference.
• A party must confirm to DITC.Payment@gov.ky the amount paid, date paid, and provide evidence of successful payment (e.g., wire transfer confirmation).
• Cayman Financial Institutions must comply with the reporting and due diligence obligations of the CRS Regulations to avoid administrative penalties for contravention of Part 3 of those Regulations.

Applies to

Cayman Financial Institutions, Reporting Financial Institutions, Non-Reporting Financial Institutions, directors, managers and other representatives of Cayman Financial Institutions

Deadlines

• 60 days of the date of the primary Penalty Notice (or any later period the court allows): Deadline for an FI/party to appeal to a court against imposition of a penalty, its amount, or both, under Regulation 32.