Principles of AEoI-CRS

Abstract

This chapter deals with the legal basis, structure, operational issues and cyber security problems associated with both AEoI and CRS. The authors discuss the bilateral and multi-lateral components of AEoI and similarities to FATCA. The chapter outlines the basis for due diligence under CRS as the part opf AEoI that applies to financial institutions as well as the AEoI itself that handles, predominantly, the data exchange between partner competent authorities. The main impact of the principles is seen to be the issues caused by the voluntary nature of the framework, the variability built into each level of structural compliance and the risks associated with the value of such data to cyber criminals driven in turn by the number of risk points in the process. The chapter highlights the additional complexities involved with multilateral CAAs particularly given that some jurisdictions have yet to implement FATCA secondary legislation even after seven years. Practical issues discussed include (i) understanding, (ii) consultation, (iii) legislation and (iii) implementation, IT, training and administration.