TREATIES AND OTHER INTERNATIONAL ACTS SERIES 14-709

________________________________________________________________________

TAXATION

Foreign Account Tax Compliance 

Agreement Between the 

UNITED STATES OF AMERICA

and ESTONIA

Signed at Tallinn April 11, 2014 

with

Annexes
 NOTE BY THE DEPARTMENT OF STATE

 Pursuant to Public Law 89—497, approved July 8, 1966

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent

evidence . . . of the treaties, international agreements other than

treaties, and proclamations by the President of such treaties and

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime

jurisdiction, and in all the tribunals and public offices of the

United States, and of the several States, without any further proof

or authentication thereof.”
 ESTONIA 

 

 Taxation: Foreign Account Tax Compliance 

 Agreement signed at Tallinn April 11, 2014;

 Entered into force July 9, 2014.

 With annexes.
Agreement between the Government of the United States of America and the 

Government of the Republic of Estonia to Improve International Tax Compliance and 

to Implement FATCA 

Whereas, the Government of the United States of America and the Government of the 

Republic of Estonia (each, a "Party," and together, the "Parties") desire to conclude an 

agreement to improve international tax compliance through mutual assistance in tax matters 

based on an effective infrastructure for the automatic exchange of information; 

Whereas, Article 26 of the Convention between the United States of America and the 

Republic of Estonia for the Avoidance of Double Taxation and the Prevention of Fiscal 

Evasion with respect to Taxes on Income, done at Washington on January 15, 1998 (the 

"Convention") authorizes the exchange of information for tax purposes, including on an 

automatic basis; 

Whereas, the United States of America enacted provisions commonly known as the Foreign 

Account Tax Compliance Act ("FATCA"), which introduce a reporting regime for financial 

institutions with respect to certain accounts; 

Whereas, the Government of the Republic of Estonia is supportive of the underlying policy 

goal ofFATCA to improve tax compliance; 

Whereas, FATCA has raised a number of issues, including that Estonian financial institutions 

may not be able to comply with certain aspects ofFATCA due to domestic legal impediments; 

Whereas, the Government of the United States of America collects information regarding 

certain accounts maintained by U.S. financial institutions held by residents of the Republic of 

Estonia and is committed to exchanging such information with the Government of the 

Republic ofEstonia and pursuing equivalent levels of exchange, provided that the appropriate 

safeguards and infrastructure for an effective exchange relationship are in place; 

Whereas, the Parties are committed to working together over the longer term towards 

achieving common reporting and due diligence standards for financial institutions; 

Whereas, the Government of the United States of America acknowledges the need to 

coordinate the reporting obligations under FATCA with other U.S. tax reporting obligations 

of Estonian Financial institutions to avoid duplicative reporting; 

Whereas, an intergovernmental approach to F ATCA implementation would address legal 

impediments and reduce burdens for Estonian financial institutions; 

Whereas, the Parties desire to conclude an agreement to improve international tax compliance 

and provide for the implementation of FATCA based on domestic reporting and reciprocal 

automatic exchange pursuant to the Convention, and subject to the confidentiality and other 

protections provided for therein, including the provisions limiting the use of the information 

exchanged under the Convention; 

Now, therefore, the Parties have agreed as follows: 
Article 1 

Definitions 

1. For purposes of this agreement and any annexes thereto ("Agreement") the following 

terms shall have the meanings set forth below: ' 

a) The term "United States" means the United States of America, including the 

States thereof, but does not include the U.S. Territories. Any reference to a 

"State" ofthe United States includes the District of Columbia. 

b) The term "U.S. Territory" means American Samoa, the Commonwealth of 

the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or 

the U.S. Virgin Islands. 

c) The term "IRS" means the U.S. Internal Revenue Service. 

d) The term "Estonia" means the Republic of Estonia. 

e) The term "Partner Jurisdiction" means a jurisdiction that has in effect an 

agreement with the United States to facilitate the implementation of FATCA. 

The IRS shall publish a list identifying all Partner Jurisdictions. 

f) The term "Competent Authority" means: 

(1) in the case of the United States, the Secretary of the Treasury or his 

delegate; and 

(2) in the case of Estonia, the Minister of Finance or his delegate. 

g) The term "Financial Institution" means a Custodial Institution, a Depository 

Institution, an Investment Entity, or a Specified Insurance Company. 

h) The term "Custodial Institution" means any Entity that holds, as a 

substantial portion of its business, financial assets for the account of others. 

An entity holds financial assets for the account of others as a substantial 

portion of its business if the entity's gross income attributable to the holding of 

financial assets and related financial services equals or exceeds 20 percent of 

the entity's gross income during the shorter of: (i) the three-year period that 

ends on December 31 (or the final day of a non-calendar year accounting 

period) prior to the year in which the determination is being made; or (ii) the 

period during which the entity has been in existence. 

i) The term "Depository Institution" means any Entity that accepts deposits in 

the ordinary course of a banking or similar business. 

j) The term "Investment Entity" means any Entity that conducts as a business 

(or is managed by an entity that conducts as a business) one or more of the 

following activities or operations for or on behalf of a customer: 

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- - ----------

(1) trading in money market instruments (cheques, bills, certificates of 

deposit, derivatives, etc.); foreign exchange; exchange, interest rate 

and index instruments; transferable securities; or commodity futures 

trading; 

(2) individual and collective portfolio management; or 

(3) otherwise investing, administering, or managing funds or money on 

behalf of other persons. 

This subparagraph l(j) shall be interpreted in a manner consistent with similar 

language set forth in the definition of "financial institution" in the Financial 

Action Task Force Recommendations. 

k) The term "Specified Insurance Company" means any Entity that is an 

insurance company (or the holding company of an insurance company) that 

issues, or is obligated to make payments with respect to, a Cash Value 

Insurance Contract or an Annuity Contract. 

I) The term "Estonian Financial Institution" means (i) any Financial 

Institution organized under the laws of Estonia, but excluding any branch of 

such Financial Institution that is located outside Estonia, and (ii) any branch of 

a Financial Institution not organized under the laws of Estonia, if such branch 

is located in Estonia. 

m) The term "Partner Jurisdiction Financial Institution" means (i) any 

Financial Institution established in a Partner Jurisdiction, but excluding any 

branch of such Financial Institution that is located outside the Partner 

Jurisdiction, and (ii) any branch of a Financial Institution not established in the 

Partner Jurisdiction, if such branch is located in the Partner Jurisdiction. 

n) The term "Reporting Financial Institution" means a Reporting Estonian 

Financial Institution or a Reporting U.S. Financial Institution, as the context 

requires. 

o) The term "Reporting Estonian Financial Institution" means any Estonian 

Financial Institution that is not a Non-Reporting Estonian Financial Institution. 

p) The term "Reporting U.S. Financial Institution" means (i) any Financial 

Institution that is resident in the United States, but excluding any branch of 

such Financial Institution that is located outside the United States, and (ii) any 

branch of a Financial Institution not resident in the United States, if such 

branch is located in the United States, provided that the Financial Institution or 

branch has control, receipt, or custody of income with respect to which 

information is required to be exchanged under subparagraph (2)(b) of Article 2 

of this Agreement. · 

q) The term "Non-Reporting Estonian Financial Institution" means any 

Estonian Financial Institution, or other Entity resident in Estonia, that is 

described in Annex II as a Non-Reporting Estonian Financial Institution or 

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that otherwise qualifies as a deemed-compliant FFI or an exempt beneficial 

owner under relevant U.S. Treasury Regulations. 

r) The term "Nonparticipating Financial Institution" means a nonparticipating 

~FI, as that term is defined in relevant U.S. Treasury Regulations, but does not 

mclude a Estonian Financial Institution or other Partner Jurisdiction Financial 

Institution other than a Financial Institution treated as a Nonparticipating 

Financial Institution pursuant to subparagraph 2(b) of Article 5 of this 

Agreement or the corresponding provision in an agreement between the 

United States and a Partner Jurisdiction. 

s) The term "Financial Account" means an account maintained by a Financial 

Institution, and includes: 

(1) in the case of an Entity that is a Financial Institution solely because it 

is an Investment Entity, any equity or debt interest (other than interests 

that are regularly traded on an established securities market) in the 

Financial Institution; 

(2) in the case of a Financial Institution not described in subparagraph 

l(s)(l) of this Article, any equity or debt interest in the Financial 

Institution (other than interests that are regularly traded on an 

established securities market), if (i) the value of the debt or equity 

interest is determined, directly or indirectly, primarily by reference to 

assets that give rise to U.S. Source Withholdable Payments, and (ii) the 

class of interests was established with a purpose of avoiding reporting 

in accordance with this Agreement; and 

(3) any Cash Value Insurance Contract and any Annuity Contract issued or 

maintained by a Financial Institution, other than a noninvestmentIinked, nontransferable immediate life annuity that is issued to an 

individual and monetizes a pension or disability benefit provided under 

an account that is excluded from the definition of Financial Account in 

Annex II. 

Notwithstanding the foregoing, the term "Financial Account" does not include 

any account that is excluded from the definition of Financial Account in 

Annex II. For purposes of this Agreement, interests are "regularly traded" if 

there is a meaningful volume of trading with respect to the interests on an 

ongoing basis, and an "established securities market" means an exchange that 

is officially recognized and supervised by a governmental authority in which 

the market is located and that has a meaningful annual value of shares traded 

on the exchange. For purposes of this subparagraph l(s), an interest in a 

Financial Institution is not "regularly traded" and shall be treated as a 

Financial Account if the holder of the interest (other than a Financial 

Institution acting as an intermediary) is registered on the books of such 

Financial Institution. The preceding sentence will not apply to interests first 

registered on the books of such Financial Institution prior to July 1, 2014, and 

with respect to interests first registered on the books of such Financial 

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Institution on or after July I, 20I4, a Financial Institution is not required to 

apply the preceding sentence prior to January I, 20I6. 

t) The term "Depository Account" includes any commercial, checking, savings, 

time, or thrift account, or an account that is evidenced by a certificate of 

deposit, thrift certificate, investment certificate, certificate of indebtedness, or 

other similar instrument maintained by a Financial Institution in the ordinary 

course of a banking or similar business. A Depository Account also includes 

an amount held by an insurance company pursuant to a guaranteed investment 

contract or similar agreement to pay or credit interest thereon. 

u) The term "Custodial Account" means an account (other than an Insurance 

Contract or Annuity Contract) for the benefit of another person that holds any 

financial instrument or contract held for investment (including, but not limited 

to, a share or stock in a corporation, a note, bond, debenture, or other evidence 

of indebtedness, a currency or commodity transaction, a credit default swap, a 

swap based upon a nonfmancial index, a notional principal contract, an 

Insurance Contract or Annuity Contract, and any option or other derivative 

instrument). 

v) The term "Equity Interest" means, in the case of a partnership that is a 

Financial Institution, either a capital or profits interest in the partnership. In 

the case of a trust that is a Financial Institution, an Equity Interest is 

considered to be held by any person treated as a settlor or beneficiary of all or 

a portion of the trust, or any other natural person exercising ultimate effective 

control over the trust. A Specified U.S. Person shall be treated as being a 

beneficiary of a foreign trust if such Specified U.S. Person has the right to 

receive directly or indirectly (for example, through a nominee) a mandatory 

distribution or may receive, directly or indirectly, a discretionary distribution 

from the trust. 

w) The term "Insurance Contract" means a contract (other than an Annuity 

Contract) under which the issuer agrees to pay an amount upon the occurrence 

of a specified contingency involving mortality, morbidity, accident, liability, or 

property risk. 

x) The term "Annuity Contract" means a contract under which the issuer agrees 

to make payments for a period of time determined in whole or in part by 

reference to the life expectancy of one or more individuals. The term also 

includes a contract that is considered to be an Annuity Contract in accordance 

with the law, regulation, or practice of the jurisdiction in which the contract 

was issued, and under which the issuer agrees to make payments for a term of 

years. 

y) 

z) 

The term "Cash Value Insurance Contract" means an Insurance Contract 

(other than an indemnity reinsurance contract between two insurance 

companies) that has a Cash Value greater than $50,000. 

The term "Cash Value" means the greater of (i) the amount that the 

policyholder is entitled to receive upon surrender or termination of the 

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contract ( d~~ermined without re?uction for any surrender charge or policy 

loan), and (n) the amount the policyholder can borrow under or with regard to 

the contract. Notwithstanding the foregoing, the term "Cash Value" does not 

include an amount payable under an Insurance Contract as: 

(I) a personal injury or sickness benefit or other benefit providing 

indemnification of an economic loss incurred upon the occurrence of 

the event insured against; 

(2) a refund to the policyholder of a previously paid premium under an 

Insurance Contract (other than under a life insurance contract) due to 

policy cancellation or termination, decrease in risk exposure during the 

effective period of the Insurance Contract, or arising from a 

redetermination of the premium due to correction of posting or other 

similar error; or 

(3) a policyholder dividend based upon the underwriting experience of the 

contract or group involved. 

aa) The term "Reportable Account" means a U.S. Reportable Account or an 

Estonian Reportable Account, as the context requires. 

bb) The term "Estonian Reportable Account" means a Financial Account 

maintained by a Reporting U.S. Financial Institution if: (i) in the case of a 

Depository Account, the account is held by an individual resident in Estonia 

and more than $10 of interest is paid to such account in any given calendar 

year; or (ii) in the case of a Financial Account other than a Depository 

Account, the Account Holder is a resident of Estonia, including an Entity that 

certifies that it is resident in Estonia for tax purposes, with respect to which 

U.S. source income that is subject to reporting under chapter 3 of subtitle A or 

chapter 61 of subtitle F ofthe U.S. Internal Revenue Code is paid or credited. 

cc) The term "U.S. Reportable Account" means a Financial Account maintained 

by a Reporting Estonian Financial Institution and held by one or more 

Specified U.S. Persons or by a Non-U.S. Entity with one or more Controlling 

Persons that is a Specified U.S. Person. Notwithstanding the foregoing, an 

account shall not be treated as a U.S. Reportable Account if such account is 

not identified as a U.S. Reportable Account after application of the due 

diligence procedures in Annex I. 

dd) The term "Account Holder" means the person listed or identified as the 

holder of a Financial Account by the Financial Institution that maintains the 

account. A person, other than a Financial Institution, holding a Financial 

Account for the benefit or account of another person as agent, custodian, 

nominee, signatory, investment advisor, or intermediary, is not treated as 

holding the account for purposes of this Agreement, and such other person is 

treated as holding the account. For purposes of the immediately preceding 

sentence, the term "Financial Institution" does not include a Financial 

Institution organized or incorporated in a U.S. Territory. In the case of a Cash 

Value Insurance Contract or an Annuity Contract, the Account Holder is any 

person entitled to access the Cash Value or change the beneficiary of the 

6 

wages, premiums, annuities, compensations, remunerations, emoluments, and 

other fixed or determinable annual or periodical gains, profits, and income, if 

such payment is from sources within the United States. Notwithstanding the 

foreg?ing, a U.S. Source Withholdable Payment does not include any payment 

that IS not treated as a withholdable payment in relevant U.S. Treasury 

Regulations. 

jj) An Entity is a "Related Entity" of another Entity if either Entity controls the 

other Entity, or the two Entities are under common control. For this purpose 

control includes direct or indirect ownership of more than 50 percent of the 

vote or value in an Entity. Notwithstanding the foregoing, Estonia may treat 

an Entity as not a Related Entity of another Entity if the two Entities are not 

members of the same expanded affiliated group as defined in section 

1471(e)(2) ofthe U.S. Internal Revenue Code. 

kk) The term "U.S. TIN" means a U.S. federal taxpayer identifying number. 

II) The term "Estonian TIN" means an Estonian taxpayer identifying number. 

mm) The term "Controlling Persons" means the natural persons who exercise 

control over an Entity. In the case of a trust, such term means the settlor, the 

trustees, the protector (if any), the beneficiaries or class of beneficiaries, and 

any other natural person exercising ultimate effective control over the trust, 

and in the case of a legal arrangement other than a trust, such term means 

persons in equivalent or similar positions. The term "Controlling Persons" 

shall be interpreted in a manner consistent with the Financial Action Task 

Force Recommendations. 

2. Any term not otherwise defined in this Agreement shall, unless the context otherwise 

requires or the Competent Authorities agree to a common meaning (as permitted by domestic 

law), have the meaning that it has at that time under the law of the Party applying this 

Agreement, any meaning under the applicable tax laws of that Party prevailing over a 

meaning given to the term under other laws of that Party. 

Article2 

Obligations to Obtain and Exchange Information with Respect to Reportable Accounts 

1. Subject to the provisions of Article 3 of this Agreement, each Party shall obtain the 

information specified in paragraph 2 of this Article with respect to all Reportable Accounts 

and shall annually exchange this information with the other Party on an automatic basis 

pursuant to the provisions of Article 26 of the Convention. 

2. The information to be obtained and exchanged is: 

a) In the case of Estonia with respect to each U.S. Reportable Account of each 

Reporting Estonian Financial Institution: 

(1) the name, address, and U.S. TIN of each Specified U.S. Person that is 

an Account Holder of such account and, in the case of a Non-U.S. 

Entity that, after application of the due diligence procedures set forth in 

8 
Annex I, is identified as having one or more Controlling Persons that is 

a Specified U.S. Person, the name, address, and U.S. TIN (if any) of 

such entity and each such Specified U.S. Person; 

(2) the account number (or functional equivalent in the absence of an 

account number); 

(3) the name and identifYing number of the Reporting Estonian Financial 

Institution; 

(4) the account balance or value (including, in the case of a Cash Value 

Insurance Contract or Annuity Contract, the Cash Value or surrender 

value) as of the end of the relevant calendar year or other appropriate 

reporting period or, if the account was closed during such year, 

immediately before closure; 

(5) in the case of any Custodial Account: 

(A) the total gross amount of interest, the total gross amount of 

dividends, and the total gross amount of other income 

generated with respect to the assets held in the account, in each 

case paid or credited to the account (or with respect to the 

account) during the calendar year or other appropriate reporting 

period; and 

(B) the total gross proceeds from the sale or redemption of property 

paid or credited to the account during the calendar year or other 

appropriate reporting period with respect to which the 

Reporting Estonian Financial Institution acted as a custodian, 

broker, nominee, or otherwise as an agent for the Account 

Holder; 

( 6) in the case of any Depository Account, the total gross amount of 

interest paid or credited to the account during the calendar year or 

other appropriate reporting period; and 

(7) in the case of any account not described in subparagraph 2(a)(5) or 

2(a)(6) of this Article, the total gross amount paid or credited to the 

Account Holder with respect to the account during the calendar year or 

other appropriate reporting period with respect to which the Reporting 

Estonian Financial Institution is the obligor or debtor, including the 

aggregate amount of any redemption payments made to the Account 

Holder during the calendar year or other appropriate reporting period. 

b) In the case of the United States, with respect to each Estonian Reportable 

Account of each Reporting U.S. Financial Institution: 

(1) the name, address, and Estonian TIN of any person that is a resident of 

Estonia and is an Account Holder of the account; 

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(2) the account number (or the functional equivalent in the absence of an 

account number); 

(3) the name and identifying number of the Reporting U.S. Financial 

Institution; 

(4) the gross amount of interest paid on a Depository Account; 

(5) the gross amount of U.S. source dividends paid or credited to the 

account; and 

(6) the gross amount of other U.S. source income paid or credited to the 

account, to the extent subject to reporting under chapter 3 of subtitle A 

or chapter 61 of subtitle F of the U.S. Internal Revenue Code. 

Article 3 

Time and Manner of Exchange of Information 

I. For purposes of the exchange obligation in Article 2 of this Agreement, the amount 

and characterization of payments made with respect to a U.S. Reportable Account may be 

determined in accordance with the principles of the tax laws of Estonia, and the amount and 

characterization of payments made with respect to an Estonian Reportable Account may be 

determined in accordance with principles of U.S. federal income tax law. 

2. For purposes of the exchange obligation in Article 2 of this Agreement, the 

information exchanged shall identify the currency in which each relevant amount is 

denominated. 

3. With respect to paragraph 2 of Article 2 of this Agreement, information is to be 

obtained and exchanged with respect to 2014 and all subsequent years, except that: 

a) In the case ofEstonia: 

(1) the information to be obtained and exchanged with respect to 2014 is 

only the information described in subparagraphs 2(a)(l) through 

2(a)(4) of Article 2 ofthisAgreement; 

(2) the information to be obtained and exchanged with respect to 2015 is 

the information described in subparagraphs 2(a)(l) through 2(a)(7) of 

Article 2 of this Agreement, except for gross proceeds described in 

subparagraph 2(a)(5)(B) of Article 2 of this Agreement; and 

(3) the information to be obtained and exchanged with respect to 2016 and 

subsequent years is the information described in subparagraphs 2(a)(l) 

through 2(a)(7) of Article 2 of this Agreement; 

b) In the case of the United States, the information to be obtained and exchanged 

with respect to 2014 and subsequent years is all of the information identified 

in subparagraph 2(b) of Article 2 of this Agreement. 

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4. . No~it.hstanding paragraph 3 of this Article, with respect to each Reportable Account 

that IS mamtamed .by a Rep~rting Financial Institution as of June 30, 2014, and subject to 

~aragraph 4 of Article 6 of this Agreement, the Parties are not required to obtain and include 

m the e~changed information the Estonian TIN or the U.S. TIN, as applicable, of any relevant 

per~on .If such taxpayer identifying number is not in the records of the Reporting Financial 

InstitutiOn. In such a case, the Parties shall obtain and include in the exchanged information 

the date of birth ofthe relevant person, ifthe Reporting Financial Institution has such date of 

birth in its records. 

5. Subject to paragraphs 3 and 4 of this Article, the information described in Article 2 of 

this Agreement shall be exchanged within nine months after the end of the calendar year to 

which the information relates. 

6. The Competent Authorities of Estonia and the United States shall enter into an 

agreement or arrangement under the mutual agreement procedure provided for in Article 25 

ofthe Convention, which shall: 

a) establish the procedures for the automatic exchange obligations described in 

Article 2 of this Agreement; 

b) prescribe rules and procedures as may be necessary to implement Article 5 of 

this Agreement; and 

c) establish as necessary procedures for the exchange of the information reported 

under subparagraph 1 (b) of Article 4 of this Agreement. 

7. All information exchanged shall be subject to the confidentiality and other protections 

provided for in the Convention, including the provisions limiting the use of the information 

exchanged. 

8. Following entry into force of this Agreement, each Competent Authority shall provide 

written notification to the other Competent Authority when it is satisfied that the jurisdiction 

of the other Competent Authority has in place (i) appropriate safeguards to ensure that the 

information received pursuant to this Agreement shall remain confidential and be used solely 

for tax purposes, and (ii) the infrastructure for an effective exchange relationship (including 

established processes for ensuring timely, accurate, and confidential information exchanges, 

effective and reliable communications, and demonstrated capabilities to promptly resolve 

questions and concerns about exchanges or requests for exchanges and to administer the 

provisions of Article 5 of this Agreement). The Competent Authorities shall endeavor in 

good faith to meet, prior to September 2015, to establish that each jurisdiction has such 

safeguards and infrastructure in place. 

9. The obligations of the Parties to obtain and exchange information under Article 2 of 

this Agreement shall take effect on the date of the later of the written notifications described 

in paragraph 8 of this Article. Notwithstanding the foregoing, if the Estonian Competent 

Authority is satisfied that the United States has the safeguards and infrastructure described in 

paragraph 8 of this Article in place, but additional time is necessary for the U.S. Competent 

Authority to establish that Estonia has such safeguards and infrastructure in place, the 

obligation of Estonia to obtain and exchange information under Article 2 of this Agreement 

II 
shall take effect on the date of the written notification provided by the Estonian Competent 

Authority to the U.S. Competent Authority pursuant to paragraph 8 of this Article. 

I 0. This Agreement shall terminate on September 30, 20 I5, if Article 2 of this Agreement 

is not in effect for either Party pursuant to paragraph 9 of this Article by that date. 

Article 4 

Application of FATCA to Estonian Financial Institutions 

I. Treatment of Reporting Estonian Financial Institutions. Each Reporting Estonian 

Financial Institution shall be treated as complying with, and not subject to withholding under, 

section I471 ofthe U.S. Internal Revenue Code ifEstonia complies with its obligations under 

Articles 2 and 3 of this Agreement with respect to such Reporting Estonian Financial 

Institution, and the Reporting Estonian Financial Institution: 

a) identifies U.S. Reportable Accounts and reports annually to the Estonian 

Competent Authority the information required to be reported in subparagraph 

2(a) of Article 2 of this Agreement in the time and manner described in Article 

3 of this Agreement; 

b) for each of 2015 and 2016, reports annually to the Estonian Competent 

Authority the name of each Nonparticipating Financial Institution to which it 

has made payments and the aggregate amount of such payments; 

c) complies with the registration requirements applicable to Financial Institutions 

in Partner Jurisdictions; 

d) to the extent that a Reporting Estonian Financial Institution is (i) acting as a 

qualified intermediary (for purposes of section I441 of the U.S. Internal 

Revenue Code) that has elected to assume primary withholding responsibility 

under chapter 3 of subtitle A of the U.S. Internal Revenue Code, (ii) a foreign 

partnership that has elected to act as a withholding foreign partnership (for 

purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code), 

or (iii) a foreign trust that has elected .to act as a withholding foreign trust (for 

purposes of both sections 1441 and l471 ofthe U.S. Internal Revenue Code), 

withholds 30 percent of any U.S. Source Withholdable Payment to any 

Nonparticipating Financial Institution; and 

e) in the case of a Reporting Estonian Financial Institution that is not described 

in subparagraph 1 (d) of this Article and that makes a payment of, or acts as an 

intermediary with respect to, a U.S. Source Withholdable Payment to any 

Nonparticipating Financial Institution, the Reporting Estonian Financial 

Institution provides to any immediate payor of such U.S. Source Withholdable 

Payment the information required for withholding and reporting to occur with 

respect to such payment. 

Notwithstanding the foregoing, a Reporting Estonian Financial Institution with respect to 

which the conditions of this paragraph 1 are not satisfied shall not be subject to withholding 

under section 1471 of the U.S. Internal Revenue Code unless such Reporting Estonian 

Financial Institution is treated by the IRS as a Nonparticipating Financial Institution pursuant 

to subparagraph 2(b) of Article 5 of this Agreement. 

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2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall 

not require a Reporting Estonian Financial Institution to withhold tax under section 1471 or 

1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant 

account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to 

close such account, if the U.S. Competent Authority receives the information set forth in 

subparagraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 of this 

Agreement, with respect to such account. 

3. Specific Treatment of Estonian Retirement Plans. The United States shall treat as 

deemed-compliant FFis or exempt beneficial owners, as appropriate, for purposes of sections 

1471 and 1472 of the U.S. Internal Revenue Code, Estonian retirement plans described in 

Annex II. For this purpose, an Estonian retirement plan includes an Entity established or 

located in, and regulated by, Estonia, or a predetermined contractual or legal arrangement, 

operated to provide pension or retirement benefits or earn income for providing such benefits 

under the laws of Estonia and regulated with respect to contributions, distributions, reporting, 

sponsorship, and taxation. 

4. Identification and Treatment of Other Deemed-Compliant FFis and Exempt 

Beneficial Owners. The United States shall treat each Non-Reporting Estonian Financial 

Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for 

purposes of section 1471 ofthe U.S. Internal Revenue Code. 

5. Special Rules Regarding Related Entities and Branches That Are 

Nonparticipating Financial Institutions. If a Estonian Financial Institution, that otherwise 

meets the requirements described in paragraph 1 of this Article or is described in paragraph 3 

or 4 of this Article, has a Related Entity or branch that operates in a jurisdiction that prevents 

such Related Entity or branch from fulfilling the requirements of a participating FFI or 

deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has 

a Related Entity or branch that is treated as a Nonparticipating Financial Institution solely due 

to the expiration of the transitional rule for limited FFis and limited branches under relevant 

U.S. Treasury Regulations, such Estonian Financial Institution shall continue to be in 

compliance with the terms of this Agreement and shall continue to be treated as a deemedcompliant FFI or exempt beneficial owner, as appropriate, for purposes of section 1471 ofthe 

U.S. Intemal Revenue Code, provided that: 

a) the Estonian Financial Institution treats each such Related Entity or branch as 

a separate Nonparticipating Financial Institution for purposes of all the 

reporting and withholding requirements of this Agreement and each such 

Related Entity or branch identifies itself to withholding agents as a 

Nonparticipating Financial Institution; 

b) each such Related Entity or branch identifies its U.S. accounts and reports the 

information with respect to those accounts as required under section 1471 of 

the U.S. Internal Revenue Code to the extent permitted under the relevant laws 

pertaining to the Related Entity or branch; and 

c) such Related Entity or branch does not specifically solicit U.S. accounts held 

by persons that are not resident in the jurisdiction where such Related Entity 

or branch is located or accounts held by Nonparticipating Financial 

Institutions that are not established in the jurisdiction where such Related 

13 
Entity or branch is located, and such Related Entity or branch is not used by 

the Estonian Financial Institution or any other Related Entity to circumvent 

the obligations under this Agreement or under section 1471 of the U.S. 

Internal Revenue Code, as appropriate. 

6. Coordination of Timing. Notwithstanding paragraphs 3 and 5 of Article 3 of this 

Agreement: 

a) Estonia shall not be obligated to obtain and exchange information with respect 

to a calendar year that is prior to the calendar year with respect to which 

similar information is required to be reported to the IRS by participating FFis 

pursuant to relevant U.S. Treasury Regulations; 

b) Estonia shall not be obligated to begin exchanging information prior to the 

date by which participating FFis are required to report similar information to 

the IRS under relevant U.S. Treasury Regulations; 

c) the United States shall not be obligated to obtain and exchange information 

with respect to a calendar year that is prior to the first calendar year with 

respect to which Estonia is required to obtain and exchange information; and 

d) the United States shall not be obligated to begin exchanging information prior 

to the date by which Estonia is required to begin exchanging information. 

7. Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding 

Article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, in 

implementing this Agreement, Estonia may use, and may permit Estonian Financial 

Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a 

corresponding definition in this Agreement, provided that such application would not 

frustrate the purposes of this Agreement. 

Article 5 

Collaboration on Compliance and Enforcement 

1. Minor and Administrative Errors. Subject to any further terms set forth in a 

competent authority agreement concluded pursuant to paragraph 6 of Article 3 of this 

Agreement, a Competent Authority shall notify the Competent Authority of the other Party 

when the first-mentioned Competent Authority has reason to believe that administrative 

errors or other minor errors may have led to incorrect or incomplete information reporting or 

resulted in other infringements of this Agreement. The Competent Authority of such other 

Party shall apply its domestic law (including applicable penalties) to obtain corrected and/or 

complete information or to resolve other infringements of this Agreement. 

2. Significant Non-Compliance. 

a) A Competent Authority shall notify the Competent Authority of the other Party 

when the first-mentioned Competent Authority has determined that there is 

significant non-compliance with the obligations under this Agreement with 

respect to a Reporting Financial Institution in the other jurisdiction. The 

14 
Competent Authority of such other Party shall apply its domestic law 

(including applicable penalties) to address the significant non-compliance 

described in the notice. 

b) If, in the case of a Reporting Estonian Financial Institution, such enforcement 

actions do not resolve the non-compliance within a period of 18 months after 

notification of significant non-compliance is first provided, the United States 

shall treat the Reporting Estonian Financial Institution as a Nonparticipating 

Financial Institution pursuant to this subparagraph 2(b ). 

3. Reliance on Third Partv Service Providers. Each Party may allow Reporting 

Financial Institutions to use third party service providers to fulfill the obligations imposed on 

such Reporting Financial Institutions by a Party, as contemplated in this Agreement, but these 

obligations shall remain the responsibility of the Reporting Financial Institutions. 

4. Prevention of Avoidance. The Parties shall implement as necessary requirements to 

prevent Financial Institutions from adopting practices intended to circumvent the reporting 

required under this Agreement. 

Article 6 

Mutual Commitment to Continue to Enhance the Effectiveness of Information 

Exchange and Transparency 

1. Reciprocity. The Government of the United States acknowledges the need to achieve 

equivalent levels of reciprocal automatic information exchange with Estonia. The 

Government of the United States is committed to further improve transparency and enhance 

the exchange relationship with Estonia by pursuing the adoption of regulations and 

advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal 

automatic information exchange. 

2. Treatment of Passthru Payments and Gross Proceeds. The Parties are committed 

to work together, along with Partner Jurisdictions, to develop a practical and effective 

alternative approach to achieve the policy objectives of foreign passthru payment and gross 

proceeds withholding that minimizes burden. 

3. Development of Common Reporting and Exchange Model. The Parties are 

committed to working with Partner Jurisdictions, the Organisation for Economic Cooperation and Development, and the European Union, on adapting the terms of this 

Agreement and other agreements between the United States and Partner Jurisdictions to a 

common model for automatic exchange of information, including the development of 

reporting and due diligence standards for financial institutions. 

4. Documentation of Accounts Maintained as of June 30, 2014. With respect to 

Reportable Accounts maintained by a Reporting Financial Institution as of June 30, 2014: 

a) The United States commits to establish, by January 1, 2017, for reporting with 

respect to 2017 and subsequent years, rules requiring Reporting U.S. Financial 

Institutions to obtain and report the Estonian TIN of each Account Holder of 

an Estonian Reportable Account as required pursuant to subparagraph 2(b)(1) 

of Article 2 of this Agreement; and 

15 
b) Estonia commits to establish, by January 1, 2017, for reporting with respect to 

2017 and subsequent years, rules requiring Reporting Estonian Financial 

Institutions to obtain the U.S. TIN of each Specified U.S. Person as required 

pursuant to subparagraph 2(a)(1) of Article 2 of this Agreement. 

Article 7 

Consistency in the Application ofFATCA to Partner Jurisdictions 

1. Estonia shall be granted the benefit of any more favorable terms under Article 4 or 

Annex I of this Agreement relating to the application of FA TCA to Estonian Financial 

Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement 

pursuant to which the other Partner Jurisdiction commits to undertake the same obligations as 

Estonia described in Articles 2 and 3 of this Agreement, and subject to the same terms and 

conditions as described therein and in Articles 5 through 9 of this Agreement. 

2. The United States shall notify Estonia of any such more favorable terms, and such 

more favorable terms shall apply automatically under this Agreement as if such terms were 

specified in this Agreement and effective as of the date of the signing of the agreement 

incorporating the more favorable terms, unless Estonia declines in writing the application 

thereof. 

Article 8 

Consultations and Amendments 

1. In case any difficulties in the implementation of this Agreement arise, either Party may 

request consultations to develop appropriate measures to ensure the fulfillment of this 

Agreement. 

2. This Agreement may be amended by written mutual agreement of the Parties. Unless 

otherwise agreed upon, such an amendment shall enter into force through the same 

procedures as set forth in paragraph 1 of Article 10 of this Agreement. 

Article 9 

Annexes 

The Annexes form an integral part of this Agreement. 

Article 10 

Term of Agreement 

1. This Agreement shall enter into force on the date of Estonia's written notification to 

the United States that Estonia has completed its necessary internal procedures for entry into 

force of this Agreement. 

2. Either Party may terminate this Agreement by giving notice of termination in writing 

to the other Party. Such termination shall become effective on the first day of the month 

following the expiration of a period of 12 months after the date of the notice of termination. 

16 
3. The Parties shall, prior to December 31, 2016, consult in good faith to amend this 

Agreement as necessary to reflect progress on the commitments set forth in Article 6 of this 

Agreement. 

In witness whereof, the undersigned, being duly authorized thereto by their respective 

Governments, have signed this Agreement. 

Done at--foJI'"',""in duplicate, in the English language, this11.._day ofA_._~~" 

FO~~ F GOVERNMENT OF 

THE UNITED STATES OF AMERICA: THE REPUBLIC OF ESTONIA: 

17 
ANNEX I 

DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S. 

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN 

NONPARTICIPATING FINANCIAL INSTITUTIONS 

I. General. 

A. Estonia shall require that Reporting Estonian Financial Institutions apply the 

due diligence procedures contained in this Annex I to identify U.S. Reportable 

Accounts and accounts held by Nonparticipating Financial Institutions. 

B. For purposes of the Agreement, 

1. All dollar amounts are in U.S. dollars and shall be read to include the 

equivalent in other currencies. 

2. Except as otherwise provided herein, the balance or value of an 

account shall be determined as of the last day of the calendar year or other 

appropriate reporting period. 

3. Where a balance or value threshold is to be determined as of June 30, 

2014, under this Annex I, the relevant balance or value shall be determined as 

of that day or the last day of the reporting period ending immediately before 

June 30, 2014, and where a balance or value threshold is to be determined as 

of the last day of a calendar year under this Annex I, the relevant balance or 

value shall be determined as of the last day of the calendar year or other 

appropriate reporting period. 

4. Subject to subparagraph E(1) of section II of this Annex I, an account 

shall be treated as a U.S. Reportable Account beginning as of the date it is 

identified as such pursuant to the due diligence procedures in this Annex I. 

5. Unless otherwise provided, information with respect to a U.S. 

Reportable Account shall be reported annually in the calendar year following 

the year to which the information relates. 

C. As an alternative to the procedures described in each section of this Annex I, 

Estonia may permit Reporting Estonian Financial Institutions to rely on the 

procedures described in relevant U.S. Treasury Regulations to establish whether an 

account is a U.S. Reportable Account or an account held by a Nonparticipating 

Financial Institution. Estonia may permit Reporting Estonian Financial Institutions to 

make such election separately for each section of this Annex I either with respect to 

all relevant Financial Accounts or, separately, with respect to any clearly identified 

group of such accounts (such as by line of business or the location of where the 

account is maintained). 

II. Preexisting Individual Accounts. The following rules and procedures apply for 

purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by 

individuals ("Preexisting Individual Accounts"). 

1 

g) An "in-care-of' or "hold mail" address that is the sole address 

the Reporting Estonian Financial Institution has on file for the Account 

Holder. In the case of a Preexisting Individual Account that is a Lower 

Value Account, an "in-care-of' address outside the United States or 

"hold mail" address shall not be treated as U.S. indicia. 

2. If none of the U.S. indicia listed in subparagraph B(l) of this section 

are discovered in the electronic search, then no further action is required until 

there is a change in circumstances that results in one or more U.S. indicia 

being associated with the account, or the account becomes a High Value 

Account described in paragraph D of this section. 

3. If any ofthe U.S. indicia listed in subparagraph B(l) ofthis section are 

discovered in the electronic search, or if there is a change in circumstances 

that results in one or more U.S. indicia being associated with the account, then 

the Reporting Estonian Financial Institution must treat the account as a U.S. 

Reportable Account unless it elects to apply subparagraph B(4) of this section 

and one of the exceptions in such subparagraph applies with respect to that 

account. 

4. Notwithstanding a finding of U.S. indicia under subparagraph B(l) of 

this section, a Reporting Estonian Financial Institution is not required to treat 

an account as a U.S. Reportable Account if: 

a) Where the Account Holder information unambiguously 

indicates a U.S. place of birth, the Reporting Estonian Financial 

Institution obtains, or has previously reviewed and maintains a record 

of: 

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); 

(2) A non-U.S. passport or other government-issued 

identification evidencing the Account Holder's citizenship or 

nationality in a country other than the United States; and 

(3) A copy of the Account Holder's Certificate of Loss of 

Nationality of the United States or a reasonable explanation of: 

(a) The reason the Account Holder does not have 

such a certificate despite relinquishing U.S. citizenship; 

or 

(b) The reason the Account Holder did not obtain 

U.S. citizenship at birth. 

b) Where the Account Holder information contains a current U.S. 

mailing or residence address, or one or more U.S. telephone numbers 

3 
that are the only telephone numbers associated with the account the 

Reporting Estonian Financial Institution obtains, or has previ;usly 

reviewed and maintains a record of: 

(I) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); and 

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder's 

non-U.S. status.· 

c) Where the Account Holder information contains standing 

instructions to transfer funds to an account maintained in the United 

States, the Reporting Estonian Financial Institution obtains, or has 

previously reviewed and maintains a record of: 

(I) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); and 

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder's 

non-U.S. status. 

d) Where the Account Holder information contains a currently 

effective power of attorney or signatory authority granted to a person 

with a U.S. address, has an "in-care-of' address or "hold mail" 

address that is the sole address identified for the Account Holder, or 

has one or more U.S. telephone numbers (if a non-U.S. telephone 

number is also associated with the account), the Reporting Estonian 

Financial Institution obtains, or has previously reviewed and maintains 

a record of: 

(I) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); or 

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder's 

non-U.S. status. 

C. Additional Procedures Applicable to Preexisting Individual Accounts 

That Are Lower Value Accounts. 

I. Review of Preexisting Individual Accounts that are Lower Value 

Accounts for U.S. indicia must be completed by June 30, 20I6. 

2. If there is a change of circumstances with respect to a Preexisting 

Individual Account that is a Lower Value Account that results in one or more 

4 
U.S. indicia described in subparagraph B(l) ofthis section being associated 

with the account, then the Reporting Estonian Financial Institution must treat 

the account as a U.S. Reportable Account unless subparagraph B( 4) of this 

section applies. 

3. Except for Depository Accounts described in subparagraph A(4) of this 

section, any Preexisting Individual Account that has been identified as a U.S. 

Reportable Account under this section shall be treated as a U.S. Reportable 

Account in all subsequent years, unless the Account Holder ceases to be a 

Specified U.S. Person. 

D. Enhanced Review Procedures for Preexisting Individual Accounts With a 

Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 31 of 

2015 or Any Subsequent Year ("High Value Accounts"). 

1. Electronic Record Search. The Reporting Estonian Financial 

Institution must review electronically searchable data maintained by the 

Reporting Estonian Financial Institution for any of the U.S. indicia described 

in subparagraph B(l) of this section. 

2. Paper Record Search. If the Reporting Estonian Financial 

Institution's electronically searchable databases include fields for, and capture 

all of the information described in, subparagraph D(3) ofthis section, then no 

further paper record search is required. If the electronic databases do not 

capture all of this information, then with respect to a High Value Account, the 

Reporting Estonian Financial Institution must also review the current customer 

master file and, to the extent not contained in the current customer master file, 

the following documents associated with the account and obtained by the 

Reporting Estonian Financial Institution within the last five years for any of 

the U.S. indicia described in subparagraph B(l) of this section: 

a) The most recent documentary evidence collected with respect 

to the account; 

b) The most recent account opening contract or documentation; 

c) The most recent documentation obtained by the Reporting 

Estonian Financial Institution pursuant to AML/KYC Procedures or for 

other regulatory purposes; 

d) Any power of attorney or signature authority forms currently in 

effect; and 

e) Any standing instructions to transfer funds currently in effect. 

3. Exception Where Databases Contain Sufficient Information. A 

Reporting Estonian Financial Institution is not required to perform the paper 

record search described in subparagraph 0(2) of this section if the Reporting 

Estonian Financial Institution's electronically searchable information includes 

the following: 

5 
a) The Account Holder's nationality or residence status; 

b) The Account Holder's residence address and mailing address 

currently on file with the Reporting Estonian Financial Institution; 

c) The Account Holder's telephone number(s) currently on file, if 

any, with the Reporting Estonian Financial Institution; 

d) Whether there are standing instructions to transfer funds in the 

account to another account (including an account at another branch of 

the Reporting Estonian Financial Institution or another Financial 

Institution); 

e) Whether there is a current "in-care-of' address or "hold mail" 

address for the Account Holder; and 

f) Whether there is any power of attorney or signatory authority 

for the account. 

4. Relationship Manager Inquiry for Actual Knowledge. In addition 

to the electronic and paper record searches described above, the Reporting 

Estonian Financial Institution must treat as a U.S. Reportable Account any 

High Value Account assigned to a relationship manager (including any 

Financial Accounts aggregated with such High Value Account) if the 

relationship manager has actual knowledge that the Account Holder is a 

Specified U.S. Person. 

5. Effect of Finding U.S. Indicia. 

a) If none of the U.S. indicia listed in subparagraph B(l) of this 

section are discovered in the enhanced review of High Value Accounts 

described above, and the account is not identified as held by a 

Specified U.S. Person in subparagraph D(4) of this section, then no 

further action is required until there is a change in circumstances that 

results in one or more U.S. indicia being associated with the account. 

b) If any of the U.S. indicia listed in subparagraph B(l) of this 

section are discovered in the enhanced review of High Value Accounts 

described above, or if there is a subsequent change in circumstances 

that results in one or more U.S. indicia being associated with the 

account, then the Reporting Estonian Financial Institution must treat 

the account as a U.S. Reportable Account unless it elects to apply 

subparagraph B(4) of this section and one of the exceptions in such 

subparagraph applies with respect to that account. 

c) Except for Depository Accounts described in subparagraph 

A( 4) of this section, any Preexisting Individual Account that has been 

identified as a U.S. Reportable Account under this section shall be 

6 
treated as a U.S. Reportable Account in all subsequent years, unless the 

Account Holder ceases to be a Specified U.S. Person. 

E. Additional Procedures Applicable to High Value Accounts. 

1. If a Preexisting Individual Account is a High Value Account as of June 

30, 2014, the Reporting Estonian Financial Institution must complete the 

enhanced review procedures described in paragraph D of this section with 

respect to such account by June 30, 2015. If based on this review such 

account is identified as a U.S. Reportable Account on or before December 31, 

20 14, the Reporting Estonian Financial Institution must report the required 

information about such account with respect to 2014 in the first report on the 

account and on an annual basis thereafter. In the case of an account identified 

as a U.S. Reportable Account after December 31,2014, and on or before June 

30, 2015, the Reporting Estonian Financial Institution is not required to report 

information about such account with respect to 2014, but must report 

information about the account on an annual basis thereafter. 

2. If a Preexisting Individual Account is not a High Value Account as of 

June 30,2014, but becomes a High Value Account as of the last day of2015 or 

any subsequent calendar year, the Reporting Estonian Financial Institution 

must complete the enhanced review procedures described in paragraph D of 

this section with respect to such account within six months after the last day of 

the calendar year in which the account becomes a High Value Account. If 

based on this review such account is identified as a U.S. Reportable Account, 

the Reporting Estonian Financial Institution must report the required 

information about such account with respect to the year in which it is 

identified as a U.S. Reportable Account and subsequent years on an annual 

basis, unless the Account Holder ceases to be a Specified U.S. Person. 

3. Once a Reporting Estonian Financial Institution applies the enhanced 

review procedures described in paragraph D of this section to a High Value 

Account, the Reporting Estonian Financial Institution is not required to reapply such procedures, other than the relationship manager inquiry described 

in subparagraph D(4) of this section, to the same High Value Account in any 

subsequent year. 

4. If there is a change of circumstances with respect to a High Value 

Account that results in one or more U.S. indicia described in subparagraph 

B(l) of this section being associated with the account, then the Reporting 

Estonian Financial Institution must treat the account as a U.S. Reportable 

Account unless it elects to apply subparagraph B(4) of this section and one of 

the exceptions in such subparagraph applies with respect to that account. 

5. A Reporting Estonian Financial Institution must implement procedures 

to ensure that a relationship manager identifies any change in circumstances of 

an account. For example, if a relationship manager is notified that the 

Account Holder has a new mailing address in the United States, the Reporting 

7 
Estonian Financial Institution is required to treat the new address as a change 

in circumstances and, if it elects to apply subparagraph B( 4) of this section, is 

required to obtain the appropriate documentation from the Account Holder. 

F. Preexisting Individual Accounts That Have Been Documented for Certain 

Other Purposes. A Reporting Estonian Financial Institution that has previously 

obtained documentation from an Account Holder to establish the Account Holder's 

status as neither a U.S. citizen nor a U.S. resident in order to meet its obligations 

under a qualified intermediary, withholding foreign partnership, or withholding 

foreign trust agreement with the IRS, or to fulfill its obligations under chapter 61 of 

Title 26 of the United States Code, is not required to perform the procedures described 

in subparagraph B(l) of this section with respect to Lower Value Accounts or 

subparagraphs D(1) through D(3) of this section with respect to High Value Accounts. 

III. New Individual Accounts. The following rules and procedures apply for purposes 

of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and 

opened on or after July 1, 2014 ("New Individual Accounts"). 

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless 

the Reporting Estonian Financial Institution elects otherwise, either with respect to all 

New Individual Accounts or, separately, with respect to any clearly identified group of 

such accounts, where the implementing rules in Estonia provide for such an election, 

the following New Individual Accounts are not required to be reviewed, identified, or 

reported as U.S. Reportable Accounts: 

1. A Depository Account unless the account balance exceeds $50,000 at 

the end of any calendar year or other appropriate reporting period. 

2. A Cash Value Insurance Contract unless the Cash Value exceeds 

$50,000 at the end of any calendar year or other appropriate reporting period. 

B. Other New Individual Accounts. With respect to New Individual Accounts 

not described in paragraph A of this section, upon account opening (or within 90 days 

after the end of the calendar year in which the account ceases to be described in 

paragraph A of this section), the Reporting Estonian Financial Institution must obtain 

a self-certification, which may be part of the account opening documentation, that 

allows the Reporting Estonian Financial Institution to determine whether the Account 

Holder is resident in the United States for tax purposes (for this purpose, a U.S. 

citizen is considered to be resident in the United States for tax purposes, even if the 

Account Holder is also a tax resident of another jurisdiction) and confirm the 

reasonableness of such self-certification based on the information obtained by the 

Reporting Estonian Financial Institution in connection with the opening of the 

account, including any documentation collected pursuant to AML/KYC Procedures. 

1. If the self-certification establishes that the Account Holder is resident 

in the United States for tax purposes, the Reporting Estonian Financial 

Institution must treat the account as a U.S. Reportable Account and obtain a 

self-certification that includes the Account Holder's U.S. TIN (which may be 

an IRS Form W-9 or other similar agreed form). 

8 
2. If there is a change of circumstances with respect to a New Individual 

Account that causes the Reporting Estonian Financial Institution to know, or 

have reason to know, that the original self-certification is incorrect or 

unreliable, the Reporting Estonian Financial Institution cannot rely on the 

original self-certification and must obtain a valid self-certification that 

establishes whether the Account Holder is a U.S. citizen or resident for U.S. 

tax purposes. If the Reporting Estonian Financial Institution is unable to 

obtain a valid self-certification, the Reporting Estonian Financial Institution 

must treat the account as a U.S. Reportable Account. 

IV. Preexisting Entity Accounts. The following rules and procedures apply for purposes 

of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Preexisting Accounts held by Entities ("Preexisting Entity Accounts"). 

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Estonian Financial Institution elects otherwise, either with 

respect to all Preexisting Entity Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Estonia provide 

for such an election, a Preexisting Entity Account with an account balance or value 

that does not exceed $250,000 as of June 30, 2014, is not required to be reviewed, 

identified, or reported as a U.S. Reportable Account until the account balance or value 

exceeds $1,000,000. 

B. Entitv Accounts Subject to Review. A Preexisting Entity Account that has 

an account balance or value that exceeds $250,000 as of June 30, 2014, and a 

Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014, but the 

account balance or value of which exceeds $1,000,000 as of the last day of 2015 or 

any subsequent calendar year, must be reviewed in accordance with the procedures set 

forth in paragraph D of this section. 

C. Entity Accounts With Respect to Which Reporting Is Required. With 

respect to Preexisting Entity Accounts described in paragraph B of this section, only 

accounts that are held by one or more Entities that are Specified U.S. Persons, or by 

Passive NFFEs with one or more Controlling Persons who are U.S. citizens or 

residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held by 

Nonparticipating Financial Institutions shall be treated as accounts for which 

aggregate payments as described in subparagraph 1 (b) of Article 4 of the Agreement 

are reported to the Estonian Competent Authority. 

D. Review Procedures for Identifying Entity Accounts With Respect to 

Which Reporting Is Required. For Preexisting Entity Accounts described in 

paragraph B of this section, the Reporting Estonian Financial Institution must apply 

the following review procedures to determine whether the account is held by one or 

more Specified U.S. Persons, by Passive NFFEs with one or more Controlling 

Persons who are U.S. citizens or residents, or by Nonparticipating Financial 

Institutions: 

1. Determine Whether the Entity Is a Specified U.S. Person. 

9 
a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a U.S. Person. For this purpose, 

information indicating that the Account Holder is a U.S. Person 

includes a U.S. place of incorporation or organization, or a U.S. 

address. 

b) If the information indicates that the Account Holder is a U.S. 

Person, the Reporting Estonian Financial Institution must treat the 

account as a U.S. Reportable Account unless it obtains a selfcertification from the Account Holder (which may be on an IRS Form 

W-8 or W-9, or a similar agreed form), or reasonably determines based 

on information in its possession or that is publicly available, that the 

Account Holder is not a Specified U.S. Person. 

2. Determine Whether a Non-U.S. Entity Is a Financial Institution. 

a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a Financial Institution. 

b) If the information indicates that the Account Holder is a 

Financial Institution, or the Reporting Estonian Financial Institution 

verifies the Account Holder's Global Intermediary Identification 

Number on the published IRS FFI list, then the account is not a U.S. 

Reportable Account. 

3. Determine Whether a Financial Institution Is a Nonparticipating 

Financial Institution Payments to Which Are Subject to Aggregate 

Reporting Under Subparagraph l(b) of Article 4 of the Agreement. 

a) Subject to subparagraph D(3)(b) of this section, a Reporting 

Estonian Financial Institution may determine that the Account Holder 

is a Estonian Financial Institution or other Partner Jurisdiction 

Financial Institution if the Reporting Estonian Financial Institution 

reasonably determines that the Account Holder has such status on the 

basis of the Account Holder's Global Intermediary Identification 

Number on the published IRS FFI list or other information that is 

publicly available or in the possession of the Reporting Estonian 

Financial Institution, as applicable. In such case, no further review, 

identification, or reporting is required with respect to the account. 

b) If the Account Holder is an Estonian Financial Institution or 

other Partner Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution, then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be 

reported as contemplated in subparagraph 1 (b) of Article 4 of the 

Agreement. 

10 
c) If the Account Holder is not a Estonian Financial Institution or 

other Partner Jurisdiction Financial Institution, then the Reporting 

Estonian Financial Institution must treat the Account Holder as a 

Nonparticipating Financial Institution payments to which are 

reportable under subparagraph l(b) of Article 4 of the Agreement, 

unless the Reporting Estonian Financial Institution: 

(1) Obtains a self-certification (which may be on an IRS 

Form W-8 or similar agreed form) from the Account Holder 

that it is a certified deemed-compliant FFI, or an exempt 

beneficial owner, as those terms are defined in relevant U.S. 

Treasury Regulations; or 

(2) In the case of a participating FFI or registered deemedcompliant FFI, verifies the Account Holder's Global 

Intermediary Identification Number on the published IRS FFI 

list. 

4. Determine Whether an Account Held by an NFFE Is a U.S. 

Reportable Account. With respect to an Account Holder of a Preexisting 

Entity Account that is not identified as either a U.S. Person or a Financial 

Institution, the Reporting Estonian Financial Institution must identify (i) 

whether the Account Holder has Controlling Persons, (ii) whether the Account 

Holder is a Passive NFFE, and (iii) whether any of the Controlling Persons of 

the Account Holder is a U.S. citizen or resident. In making these 

determinations the Reporting Estonian Financial Institution must follow the 

guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the order 

most appropriate under the circumstances. 

a) For purposes of determining the Controlling Persons of an 

Account Holder, a Reporting Estonian Financial Institution may rely 

on information collected and maintained pursuant to AML/KYC 

Procedures. 

b) For purposes of determining whether the Account Holder is a 

Passive NFFE, the Reporting Estonian Financial Institution must 

obtain a self-certification (which may be on an IRS Form W-8 or W-9, 

or on a similar agreed form) from the Account Holder to establish its 

status, unless it has information in its possession or that is publicly 

available, based on which it can reasonably determine that the Account 

Holder is an Active NFFE. 

c) For purposes of determining whether a Controlling Person of a 

Passive NFFE is a U.S. citizen or resident for tax purposes, a 

Reporting Estonian Financial Institution may rely on: 

(1) Information collected and maintained pursuant to 

AML/KYC Procedures in the case of a Preexisting Entity 

11 
Account held by one or more NFFEs with an account balance 

or value that does not exceed $1,000,000; or 

(2) A self-certification (which may be on an IRS Form W-8 

or W-9, or on a similar agreed form) from the Account Holder 

or such Controlling Person in the case of a Preexisting Entity 

Account held by one or more NFFEs with an account balance 

or value that exceeds $1,000,000. 

d) If any Controlling Person of a Passive NFFE is a U.S. citizen or 

resident, the account shall be treated as a U.S. Reportable Account. 

E. Timing of Review and Additional Procedures Applicable to Preexisting 

Entity Accounts. 

1. Review of Preexisting Entity Accounts with an account balance or 

value that exceeds $250,000 as of June 30, 2014, must be completed by June 

30,2016. 

2. Review of Preexisting Entity Accounts with an account balance or 

value that does not exceed $250,000 as of June 30, 2014, but exceeds 

$1,000,000 as of December 31 of 2015 or any subsequent year, must be 

completed within six months after the last day of the calendar year in which 

the account balance or value exceeds $1,000,000. 

3. If there is a change of circumstances with respect to a Preexisting 

Entity Account that causes the Reporting Estonian Financial Institution to 

know, or have reason to know, that the self-certification or other 

documentation associated with an account is incorrect or unreliable, the 

Reporting Estonian Financial Institution must redetermine the status of the 

account in accordance with the procedures set forth in paragraph D of this 

section. 

V. New Entitv Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 

("New Entity Accounts"). 

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Estonian Financial Institution elects otherwise, either with 

respect to all New Entity Accounts or, separately, with respect to any clearly identified 

group of such accounts, where the implementing rules in Estonia provide for such 

election, a credit card account or a revolving credit facility treated as a New Entity 

Account is not required to be reviewed, identified, or reported, provided that the 

Reporting Estonian Financial Institution maintaining such account implements 

policies and procedures to prevent an account balance owed to the Account Holder 

that exceeds $50,000. 

B. Other New Entitv Accounts. With respect to New Entity Accounts not 

described in paragraph A of this section, the Reporting Estonian Financial Institution 

12 
must determine whether the Account Holder is: (i) a Specified U.S. Person; (ii) a 

Estonian Financial Institution or other Partner Jurisdiction Financial Institution; (iii) a 

participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those 

terms are defined in relevant U.S. Treasury Regulations; or (iv) an Active NFFE or 

Passive NFFE. 

1. Subject to subparagraph B(2) of this section, a Reporting Estonian 

Financial Institution may determine that the Account Holder is an Active 

NFFE, a Estonian Financial Institution, or other Partner Jurisdiction Financial 

Institution if the Reporting Estonian Financial Institution reasonably 

determines that the Account Holder has such status on the basis of the Account 

Holder's Global Intermediary Identification Number or other information that 

is publicly available or in the possession of the Reporting Estonian Financial 

Institution, as applicable. 

2. If the Account Holder is an Estonian Financial Institution or other 

Partner Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution, then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be reported as 

contemplated in subparagraph 1 (b) of Article 4 of the Agreement. 

3. In all other cases, a Reporting Estonian Financial Institution must 

obtain a self-certification from the Account Holder to establish the Account 

Holder's status. Based on the self-certification, the following rules apply: 

a) If the Account Holder is a Specifzed U.S. Person, the Reporting 

Estonian Financial Institution must treat the account as a U.S. 

Reportable Account. 

b) If the Account Holder is a Passive NFFE, the Reporting 

Estonian Financial Institution must identify the Controlling Persons as 

determined under AML/KYC Procedures, and must determine whether 

any such person is a U.S. citizen or resident on the basis of a selfcertification from the Account Holder or such person. If any such 

person is a U.S. citizen or resident, the Reporting Estonian Financial 

Institution must treat the account as a U.S. Reportable Account. 

c) If the Account Holder is: (i) a U.S. Person that is not a 

Specified U.S. Person; (ii) subject to subparagraph B(3)(d) of this 

section, a Estonian Financial Institution or other Partner Jurisdiction 

Financial Institution; (iii) a participating FFI, a deemed-compliant FFI, 

or an exempt beneficial owner, as those terms are defined in relevant 

U.S. Treasury Regulations; (iv) an Active NFFE; or (v) a Passive 

NFFE none of the Controlling Persons of which is a U.S. citizen or 

resident, then the account is not a U.S. Reportable Account, and no 

reporting is required with respect to the account. 

d) If the Account Holder is a Nonparticipating Financial 

Institution (including an Estonian Financial Institution or other Partner 

Jurisdiction Financial Institution treated by the IRS as a 

13 
Nonparticipating Financial Institution), then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be 

reported as contemplated in subparagraph l(b) of Article 4 of the 

Agreement. 

VI. Special Rules and Definitions. The following additional rules and definitions apply 

in implementing the due diligence procedures described above: 

A. Reliance on Self-Certifications and Documentary Evidence. A Reporting 

Estonian Financial Institution may not rely on a self-certification or documentary 

evidence if the Reporting Estonian Financial Institution knows or has reason to know 

that the self-certification or documentary evidence is incorrect or unreliable. 

B. Definitions. The following definitions apply for purposes of this Annex I. 

1. AML/KYC Procedures. "AML/KYC Procedures" means the customer 

due diligence procedures of a Reporting Estonian Financial Institution 

pursuant to the anti-money laundering or similar requirements of Estonia 

to which such Reporting Estonian Financial Institution is subject. 

2. NFFE. An "NFFE" means any Non-U.S. Entity that is not an FFI as 

defined in relevant U.S. Treasury Regulations or is an Entity described in 

subparagraph B(4)G) of this section, and also includes any Non-U.S. 

Entity that is established in Estonia or another Partner Jurisdiction and that 

is not a Financial Institution. 

3. Passive NFFE. A "Passive NFFE" means any NFFE that is not (i) an 

Active NFFE, or (ii) a withholding foreign partnership or withholding 

foreign trust pursuant to relevant U.S. Treasury Regulations. 

4. Active NFFE. An "Active NFFE" means any NFFE that meets any of the 

following criteria: 

a) Less than 50 percent of the NFFE's gross income for the preceding 

calendar year or other appropriate reporting period is passive 

income and less than 50 percent of the assets held by the NFFE 

during the preceding calendar year or other appropriate reporting 

period are assets that produce or are held for the production of 

passive income; 

b) The stock of the NFFE is regularly traded on an established 

securities market or the NFFE is a Related Entity of an Entity the 

stock of which is traded on an established securities market; 

c) The NFFE is organized in a U.S. Territory and all ofthe owners of 

the payee are bona fide residents of that U.S. Territory; 

d) The NFFE is a government (other than the U.S. government), a 

political subdivision of such government (which, for the avoidance 

of doubt, includes a state, province, county, or municipality), or a 

public body performing a function of such government or a 

14 
political subdivision thereof, a government of a U.S. Territory, an 

international organization, a non-U.S. central bank of issue, or an 

Entity wholly owned by one or more of the foregoing; 

e) Substantially all of the activities ofthe NFFE consist ofholding (in 

whole or in part) the outstanding stock of, or providing financing 

and services to, one or more subsidiaries that engage in trades or 

businesses other than the business of a Financial Institution, except 

that an entity shall not qualify for NFFE status if the entity 

functions (or holds itself out) as an investment fund, such as a 

private equity fund, venture capital fund, leveraged buyout fund, or 

any investment vehicle whose purpose is to acquire or fund 

companies and then hold interests in those companies as capital 

assets for investment purposes; 

f) The NFFE is not yet operating a business and has no prior 

operating history, but is investing capital into assets with the intent 

to operate a business other than that of a Financial Institution, 

provided that the NFFE shall not qualify for this exception after the 

date that is 24 months after the date of the initial organization of 

theNFFE; 

g) The NFFE was not a Financial Institution in the past five years, and 

is in the process of liquidating its assets or is reorganizing with the 

intent to continue or recommence operations in a business other 

than that of a Financial Institution; 

h) The NFFE primarily engages in financing and hedging transactions 

with, or for, Related Entities that are not Financial Institutions, and 

does not provide financing or hedging services to any Entity that is 

not a Related Entity, provided that the group of any such Related 

Entities is primarily engaged in a business other than that of a 

Financial Institution; 

i) The NFFE is an "excepted NFFE" as described in relevant U.S. 

Treasury Regulations; or 

j) The NFFE meets all of the following requirements: 

i. It is established and operated in its jurisdiction of residence 

exclusively for religious, charitable, scientific, artistic, 

cultural, athletic, or educational purposes; or it is established 

and operated in its jurisdiction of residence and it is a 

professional organization, business league, chamber of 

commerce, labor organization, agricultural or horticultural 

organization, civic league or an organization operated 

exclusively for the promotion of social welfare; 

n. It is exempt from income tax in its jurisdiction of residence; 

m. It has no shareholders or members who have a proprietary or 

beneficial interest in its income or assets; 

15 
iv. The applicable laws of the NFFE's jurisdiction of residence 

or the NFFE's formation documents do not permit any 

income or assets of the NFFE to be distributed to, or applied 

for the benefit of, a private person or non-charitable Entity 

other than pursuant to the conduct of the NFFE's charitable 

activities, or as payment of reasonable compensation for 

services rendered, or as payment representing the fair market 

value of property which the NFFE has purchased; and 

v. The applicable laws of the NFFE's jurisdiction of residence 

or the NFFE's formation documents require that, upon the 

NFFE's liquidation or dissolution, all of its assets be 

distributed to a governmental entity or other non-profit 

organization, or escheat to the government of the NFFE' s 

jurisdiction of residence or any political subdivision thereof. 

5. Preexisting Account. A "Preexisting Account" means a financial account 

maintained by a Reporting Financial Institution as of June 30, 2014. 

C. Account Balance Aggregation and Currency Translation Rules. 

1. Aggregation of Individual Accounts. For purposes of determining 

the aggregate balance or value of Financial Accounts held by an individual, a 

Reporting Estonian Financial Institution is required to aggregate all Financial 

Accounts maintained by the Reporting Estonian Financial Institution, or by a 

Related Entity, but only to the extent that the Reporting Estonian Financial 

Institution's computerized systems link the Financial Accounts by reference to 

a data element such as client number or taxpayer identification number, and 

allow account balances or values to be aggregated. Each holder of a jointly 

held Financial Account shall be attributed the entire balance or value of the 

jointly held Financial Account for purposes of applying the aggregation 

requirements described in this paragraph 1. 

2. Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a 

Reporting Estonian Financial Institution is required to take into account all 

Financial Accounts that are maintained by the Reporting Estonian Financial 

Institution, or by a Related Entity, but only to the extent that the Reporting 

Estonian Financial Institution's computerized systems link the Financial 

Accounts by reference to a data element such as client number or taxpayer 

identification number, and allow account balances or values to be aggregated. 

3. Special Aggregation Rule Applicable to Relationship Managers. 

For purposes of determining the aggregate balance or value of Financial 

Accounts held by a person to determine whether a Financial Account is a High 

Value Account, a Reporting Estonian Financial Institution is also required, in 

the case of any Financial Accounts that a relationship manager knows, or has 

reason to know, are directly or indirectly owned, controlled, or established 

(other than in a fiduciary capacity) by the same person, to aggregate all such 

accounts. 

16 
4. Currency Translation Rule. For purposes of determining the balance 

or value of Financial Accounts denominated in a currency other than the U.S. 

dollar, a Reporting Estonian Financial Institution must convert the U.S. dollar 

threshold amounts described in this Annex I into such currency using a 

published spot rate determined as of the last day of the calendar year 

preceding the year in which the Reporting Estonian Financial Institution is 

determining the balance or value. 

D. Documentary Evidence. For purposes of this Annex I, acceptable 

documentary evidence includes any of the following: 

1. A certificate of residence issued by an authorized government body 

(for example, a government or agency thereof: or a municipality) of the 

jurisdiction in which the payee claims to be a resident. 

2. With respect to an individual, any valid identification issued by an 

authorized government body (for example, a government or agency thereof: or 

a municipality), that includes the individual's name and is typically used for 

identification purposes. 

3. With respect to an Entity, any official documentation issued by an 

authorized government body (for example, a government or agency thereof: or 

a municipality) that includes the name of the Entity and either the address of 

its principal office in the jurisdiction (or U.S. Territory) in which it claims to 

be a resident or the jurisdiction (or U.S. Territory) in which the Entity was 

incorporated or organized. 

4. With respect to a Financial Account maintained in a jurisdiction with 

anti-money laundering rules that have been approved by the IRS in connection 

with a QI agreement (as described in relevant U.S. Treasury Regulations), any 

of the documents, other than a Form W-8 or W-9, referenced in the 

jurisdiction's attachment to the QI agreement for identifying individuals or 

Entities. 

5. Any financial statement, third-party credit report, bankruptcy filing, or 

U.S. Securities and Exchange Commission report. 

E. Alternative Procedures for Financial Accounts Held by Individual 

Beneficiaries of a Cash Value Insurance Contract. A Reporting Estonian Financial 

Institution may presume that an individual beneficiary (other than the owner) of a 

Cash Value Insurance Contract receiving a death benefit is not a Specified U.S. 

Person and may treat such Financial Account as other than a U.S. Reportable Account 

unless the Reporting Estonian Financial Institution has actual knowledge, or reason to 

know, that the beneficiary is a Specified U.S. Person. A Reporting Estonian Financial 

Institution has reason to know that a beneficiary of a Cash Value Insurance Contract 

is a Specified U.S. Person if the information collected by the Reporting Estonian 

Financial Institution and associated with the beneficiary contains U.S. indicia as 

described in subparagraph (B)(1) of section II of this Annex I. If a Reporting 

Estonian Financial Institution has actual knowledge, or reason to know, that the 

17 
-----~~--~ 

beneficiary is a Specified U.S. Person, the Reporting Estonian Financial Institution 

must follow the procedures in subparagraph B(3) of section II ofthis Annex I. 

F. Reliance on Third Parties. Regardless of whether an election is made under 

paragraph C of section I of this Annex I, Estonia may permit Reporting Estonian 

Financial Institutions to rely on due diligence procedures performed by third parties, 

to the extent provided in relevant U.S. Treasury Regulations. 

18 
ANNEX II 

The following Entities shall be treated as exempt beneficial owners or deemed-compliant 

FFis, as the case may be, and the following accounts shall be excluded from the definition of 

Financial Accounts. 

This Annex II may be modified by a mutual written decision entered into between the 

Competent Authorities ofEstonia and the United States: (I) to include additional Entities and 

accounts that present a low risk of being used by U.S. Persons to evade U.S. tax and that have 

similar characteristics to the Entities and accounts described in this Annex II as of the date of 

signature of the Agreement; or (2) to remove Entities and accounts that, due to changes in 

circumstances, no longer present a low risk of being used by U.S. Persons to evade U.S. tax. 

Any such addition or removal shall be effective on the date of signature of the mutual 

decision, unless otherwise provided therein. Procedures for reaching such a mutual decision 

may be included in the mutual agreement or arrangement described in paragraph 6 of Article 

3 of the Agreement. 

I. Exempt Beneficial Owners other than Funds. The following Entities shall be treated 

as Non-Reporting Estonian Financial Institutions and as exempt beneficial owners for 

purposes of sections I47I and 1472 of the U.S. Internal Revenue Code, other than with 

respect to a payment that is derived from an obligation held in connection with a 

commercial financial activity of a type engaged in by a Specified Insurance Company, 

Custodial Institution, or Depository Institution. 

A. Governmental Entity. The government of Estonia, any political subdivision of 

Estonia (which, for the avoidance of doubt, includes a state, province, county, or 

municipality), or any wholly owned agency or instrumentality of Estonia or any one 

or more of the foregoing (each, an "Estonian Governmental Entity"). This category is 

comprised of the integral parts, controlled entities, and political subdivisions of 

Estonia. 

I. An integral part of Estonia means any person, organization, agency, bureau, fund, 

instrumentality, or other body, however designated, that constitutes a governing 

authority of Estonia. The net earnings of the governing authority must be credited 

to its own account or to other accounts of Estonia, with no portion inuring to the 

benefit of any private person. An integral part does not include any individual 

who is a sovereign, official, or administrator acting in a private or personal 

capacity. 

2. A controlled entity means an Entity that is separate in form from Estonia or that 

otherwise constitutes a separate juridical entity, provided that: 

a) The Entity is wholly owned and controlled by one or more Estonian 

Governmental Entities directly or through one or more controlled entities or 

the Entity has been incorporated by Governmental Entities in the public 

interest pursuant to a legislative act specifically governing that Entity; 

b) The Entity's net earnings are credited to its own account or to the accounts of 

one or more Estonian Governmental Entities, with no portion of its income 

inuring to the benefit of any private person; and 

1 
c) The Entity's assets vest in one or more Estonian Governmental Entities upon 

dissolution. 

3. Income does not inure to the benefit of private persons if such persons are the 

intended beneficiaries of a governmental program, and the program activities are 

performed for the general public with respect to the common welfare or relate to 

the administration of some phase of government. Notwithstanding the foregoing, 

however, income is considered to inure to the benefit of private persons if the 

income is derived from the use of a governmental entity to conduct a commercial 

business, such as a commercial banking business, that provides financial services 

to private persons. 

B. International Organization. Any international organization or wholly owned 

agency or instrumentality thereof. This category includes any intergovernmental 

organization (including a supranational organization) (1) that is comprised primarily 

of non-U.S. governments; (2) that has in effect a headquarters agreement with 

Estonia; and (3) the income of which does not inure to the benefit of private persons. 

C. Central Bank. An institution that is by law or government sanction the principal 

authority, other than the government of Estonia itself, issuing instruments intended to 

circulate as currency. Such an institution may include an instrumentality that is 

separate from the government of Estonia, whether or not owned in whole or in part by 

Estonia. 

II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be 

treated as Non-Reporting Estonian Financial Institutions and as exempt beneficial owners 

for purposes of sections 1471 and 1472 ofthe U.S. Internal Revenue Code. 

A. Treaty-Qualified Retirement Fund. A fund established in Estonia, provided that the 

fund is entitled to benefits under an income tax treaty between Estonia and the United 

States on income that it derives from sources within the United States (or would be 

entitled to such benefits if it derived any such income) as a resident of Estonia that 

satisfies any applicable limitation on benefits requirement, and is operated principally 

to administer or provide pension or retirement benefits. 

B. Broad Participation Retirement Fund. A fund established in Estonia to provide 

retirement, disability, or death benefits, or any combination thereof, to beneficiaries 

that are current or former employees (or persons designated by such employees) of 

one or more employers in consideration for services rendered, provided that the fund: 

1. Does not have a single beneficiary with a right to more than five percent of the 

fund's assets; 

2. Is subject to government regulation and provides annual information reporting 

about its beneficiaries to the relevant tax authorities in Estonia; and 

3. Satisfies at least one of the following requirements: 

a) The fund is generally exempt from tax in Estonia on investment income under 

the laws of Estonia due to its status as a retirement or pension plan; 

2 
b) The fund receives at least 50 percent of its total contributions (other than 

tr~nsfers ?f assets from oth~r plans described in paragraphs A through D of 

this section or from retirement and pension accounts described in 

subparagraph A( 1) of section V of this Annex II) from the sponsoring 

employers; 

c) Distributions or withdrawals from the fund are allowed only upon the 

occurrence of specified events related to retirement, disability, or death (except 

rollover distributions to other retirement funds described in paragraphs A 

through D of this section or retirement and pension accounts described in 

subparagraph A(l) of section V of this Annex II), or penalties apply to 

distributions or withdrawals made before such specified events; or 

d) Contributions (other than certain permitted make-up contributions) by 

employees to the fund are limited by reference to earned income of the 

employee or may not exceed $50,000 annually, applying the rules set forth in 

Annex I for account aggregation and currency translation. 

C. Narrow Participation Retirement Fund. A fund established in Estonia to provide 

retirement, disability, or death benefits to beneficiaries that are current or former 

employees (or persons designated by such employees) of one or more employers in 

consideration for services rendered, provided that: 

1. The fund has fewer than 50 participants; 

2. The fund is sponsored by one or more employers that are not Investment Entities 

or Passive NFFEs; 

3. The employee and employer contributions to the fund (other than transfers of 

assets from treaty-qualified retirement funds described in paragraph A of this 

section or retirement and pension accounts described in subparagraph A(l) of 

section V of this Annex II) are limited by reference to earned income and 

compensation of the employee, respectively; 

4. Participants that are not residents of Estonia are not entitled to more than 20 

percent ofthe fund's assets; and 

5. The fund is subject to government regulation and provides annual information 

reporting about its beneficiaries to the relevant tax authorities in Estonia. 

D. Pension Fund of an Exempt Beneficial Owner. A fund established in Estonia by an 

exempt beneficial owner to provide retirement, disability, or death benefits to 

beneficiaries or participants that are current or former employees of the exempt 

beneficial owner (or persons designated by such employees), or that are not current or 

former employees, if the benefits provided to such beneficiaries or participants are in 

consideration of personal services performed for the exempt beneficial owner. 

E. Mandatory Pension Funds (as defined under the Funded Pensions Act§ 3). 

F. Voluntary Pension Funds (as defined under the Funded Pensions Act§ 3). 

3 
G. Investm~nt E~tity _Whollr O~ned by Exempt Beneficial Owners. An Entity that is 

an Estoman. Fmanc1al InstitutiOn solely because it is an Investment Entity, provided 

that each direct holder of an Equity Interest in the Entity is an exempt beneficial 

ow~er, . and e~ch direct holder of a debt interest in such Entity is either a Depository 

Institution (with respect to a loan made to such Entity) or an exempt beneficial owner. 

III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Compliant 

FFis. The following Financial Institutions are Non-Reporting Estonian Financial 

Institutions that shall be treated as deemed-compliant FFis for purposes of section 1471 

of the U.S. Internal Revenue Code. 

A. Financial Institution with a Local Client Base. A Financial Institution satisfying 

the following requirements: 

1. The Financial Institution must be licensed and regulated as a financial institution 

under the laws of Estonia; 

2. The Financial Institution must have no fixed place of business outside of Estonia. 

For this purpose, a fixed place of business does not include a location that is not 

advertised to the public and from which the Financial Institution performs solely 

administrative support functions; 

3. The Financial Institution must not solicit customers or Account Holders outside 

Estonia. For this purpose, a Financial Institution shall not be considered to have 

solicited customers or Account Holders outside Estonia merely because the 

Financial Institution (a) operates a website, provided that the website does not 

specifically indicate that the Financial Institution provides Financial Accounts or 

services to nonresidents, and does not otherwise target or solicit U.S. customers or 

Account Holders, or (b) advertises in print media or on a radio or television 

station that is distributed or aired primarily within Estonia but is also incidentally 

distributed or aired in other countries, provided that the advertisement does not 

specifically indicate that the Financial Institution provides Financial Accounts or 

services to nonresidents, and does not otherwise target or solicit U.S. customers or 

Account Holders; 

4. The Financial Institution must be required under the laws of Estonia to identify 

resident Account Holders for purposes of either information reporting or 

withholding of tax with respect to Financial Accounts held by residents· or for 

purposes of satisfying Estonia's AML due diligence requirements; 

5. At least 98 percent of the Financial Accounts by value maintained by the Financial 

Institution must be held by residents (including residents that are Entities) of 

Estonia or a Member State of the European Union; 

6. Beginning on or before July 1, 2014, the Financial Institution must have policies 

and procedures, consistent with those set forth in Annex I, to prevent the Financial 

Institution from providing a Financial Account to any Nonparticipating Financial 

Institution and to monitor whether the Financial Institution opens or maintains a 

Financial Account for any Specified U.S. Person who is not a resident of Estonia 

(including a U.S. Person that was a resident of Estonia when the Financial 

4 
Account was opened but subsequently ceases to be a resident of Estonia) or any 

Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens 

who are not residents of Estonia; 

7. Such policies and procedures must provide that if any Financial Account held by a 

Specified U.S. Person who is not a resident of Estonia or by a Passive NFFE with 

Controlling Persons who are U.S. residents or U.S. citizens who are not residents 

of Estonia is identified, the Financial Institution must report such Financial 

Account as would be required if the Financial Institution were a Reporting 

Estonian Financial Institution (including by following the registration 

requirements applicable to Reporting Estonian Financial Institutions) or close 

such Financial Account; 

8. With respect to a Preexisting Account held by an individual who is not a resident 

of Estonia or by an Entity, the Financial Institution must review those Preexisting 

Accounts in accordance with the procedures set forth in Annex I applicable to 

Preexisting Accounts to identify any U.S. Reportable Account or Financial 

Account held by a Nonparticipating Financial Institution, and must report such 

Financial Account as would be required if the Financial Institution were a 

Reporting Estonian Financial Institution (including by following the registration 

requirements applicable to Reporting Estonian Financial Institutions) or close 

such Financial Account; 

9. Each Related Entity of the Financial Institution that is a Financial Institution 

must be incorporated or organized in Estonia and, with the exception of any 

Related Entity that is a retirement fund described in paragraphs A through D of 

section II of this Annex II, satisfy the requirements set forth in this paragraph A; 

and 

10. The Financial Institution must not have policies or practices that discriminate 

against opening or maintaining Financial Accounts for individuals who are 

Specified U.S. Persons and residents of Estonia. 

B. Local Bank. A Financial Institution satisfying the following requirements: 

1. The Financial Institution operates solely as (and is licensed and regulated under 

the laws ofEstonia as) (a) a bank or (b) a credit union or similar cooperative credit 

organization that is operated without profit; 

2. The Financial Institution's business consists primarily of receiving deposits from 

and making loans to, with respect to a bank, unrelated retail customers and, with 

respect to a credit union or similar cooperative credit organization, members, 

provided that no member has a greater than five percent interest in such credit 

union or cooperative credit organization; 

3. The Financial Institution satisfies the requirements set forth in subparagraphs A(2) 

and A(3) of this section, provided that, in addition to the limitations on the website 

described in subparagraph A(3) of this section, the website does not permit the 

opening of a Financial Account; 

5 
4. The Financial Institution does not have more than $175 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken 

together, do not have more than $500 million in total assets on their consolidated 

or combined balance sheets; and 

5. Any Related Entity must be incorporated or organized in Estonia, and any 

Related Entity that is a Financial Institution, with the exception of any Related 

Entity that is a retirement fund described in paragraphs A through D of section II 

of this Annex II or a Financial Institution with only low-value accounts described 

in paragraph C of this section, must satisfy the requirements set forth in this 

paragraph B. 

C. Financial Institution with Only Low-Value Accounts. An Estonian Financial 

Institution satisfying the following requirements: 

1. The Financial Institution is not an Investment Entity; 

2. No Financial Account maintained by the Financial Institution or any Related 

Entity has a balance or value in excess of $50,000, applying the rules set forth in 

Annex I for account aggregation and currency translation; and 

3. The Financial Institution does not have more than $50 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken 

together, do not have more than $50 million in total assets on their consolidated or 

combined balance sheets. 

D. Qualified Credit Card Issuer. An Estonian Financial Institution satisfying the 

following requirements: 

1. The Financial Institution is a Financial Institution solely because it is an issuer of 

credit cards that accepts deposits only when a customer makes a payment in 

excess of a balance due with respect to the card and the overpayment is not 

immediately returned to the customer; and 

2. Beginning on or before July 1, 2014, the Financial Institution implements policies 

and procedures to either prevent a customer deposit in excess of $50,000, or to 

ensure that any customer deposit in excess of $50,000, in each case applying the 

rules set forth in Annex I for account aggregation and currency translation, is 

refunded to the customer within 60 days. For this purpose, a customer deposit 

does not refer to credit balances to the extent of disputed charges but does include 

credit balances resulting from merchandise returns. 

IV. Investment Entities that Qualify as Deemed-Compliant FFis and Other Special 

Rules. The Financial Institutions described in paragraphs A through E of this section are 

Non-Reporting Estonian Financial Institutions that shall be treated as deemed-compliant 

FFis for purposes of section 1471 of the U.S. Internal Revenue Code. In addition, 

paragraph F of this section provides special rules applicable to an Investment Entity. 

A. Trustee-Documented Trust. A trust established under the laws of Estonia to the 

extent that the trustee of the trust is a Reporting U.S. Financial Institution, Reporting 

6 
Model 1 FFI, or Participating FFI and reports all information required to be reported 

pursuant to the Agreement with respect to all U.S. Reportable Accounts of the trust. 

B. Sponsored Investment Entity and Controlled Foreign Corporation. A Financial 

Institution described in subparagraph B(l) or B(2) of this section having a sponsoring 

entity that complies with the requirements of subparagraph B(3) ofthis section. 

1. A Financial Institution is a sponsored investment entity if (a) it is an Investment 

Entity established in Estonia that is not a qualified intermediary, withholding 

foreign partnership, or withholding foreign trust pursuant to relevant U.S. 

Treasury Regulations; and (b) an Entity has agreed with the Financial Institution 

to act as a sponsoring entity for the Financial Institution. 

2. A Financial Institution is a sponsored controlled foreign corporation if (a) the 

Financial Institution is a controlled foreign corporation' organized under the laws 

of Estonia that is not a qualified intermediary, withholding foreign partnership, or 

withholding foreign trust pursuant to relevant U.S. Treasury Regulations; (b) the 

Financial Institution is wholly owned, directly or indirectly, by a Reporting U.S. 

Financial Institution that agrees to act, or requires an affiliate of the Financial 

Institution to act, as a sponsoring entity for the Financial Institution; and (c) the 

Financial Institution shares a common electronic account system with the 

sponsoring entity that enables the sponsoring entity to identify all Account 

Holders and payees of the Financial Institution and to access all account and 

customer information maintained by the Financial Institution including, but not 

limited to, customer identification information, customer documentation, account 

balance, and all payments made to the Account Holder or payee. 

3. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity is authorized to act on behalf of the Financial Institution 

(such as a fund manager, trustee, corporate director, or managing partner) to 

fulfill applicable registration requirements; 

b) The sponsoring entity has registered as a sponsoring entity pursuant to 

applicable registration requirements; 

c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect 

to the Financial Institution, the sponsoring entity registers the Financial 

Institution pursuant to applicable registration requirements on or before the 

later of December 31, 2015 and the date that is 90 days after such a U.S. 

Reportable Account is first identified; 

1 A "controlled foreign corporation" means any foreign corporation if more than 50 percent of the total 

combined voting power of all classes of stock of such corporation entitled to vote, or the total value of the 

stock of such corporation, is owned, or is considered as owned, by "United States shareholders" on an~ day 

during the taxable year of such foreign corporation. The term a "United States shareholder" means, With 

respect to any foreign corporation, a United States person who owns, or is considered as owning, 10 percent 

or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation. 

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d) The sponsoring entity agrees to perform, on behalf of the Financial Institution 

a~l du~ dilige?ce: withholding, reporting, and other requirements that th~ 

Fmanctal Institution would have been required to perform if it were a 

Reporting Estonian Financial Institution; 

e) The sponsoring entity identifies the Financial Institution and includes the 

identifying number of the Financial Institution (obtained by following 

applicable registration requirements) in all reporting completed on the 

Financial Institution's behalf; and 

f) The sponsoring entity has not had its status as a sponsor revoked. 

C. Sponsored, Closely Held Investment Vehicle. An Estonian Financial Institution 

satisfying the following requirements: 

1. The Financial Institution is a Financial Institution solely because it is an 

Investment Entity and is not a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust pursuant to relevant U.S. Treasury 

Regulations; 

2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Modell 

FFI, or Participating FFI, is authorized to act on behalf of the Financial Institution 

(such as a professional manager, trustee, or managing partner), and agrees to 

perform, on behalf of the Financial Institution, all due diligence, withholding, 

reporting, and other requirements that the Financial Institution would have been 

required to perform if it were a Reporting Estonian Financial Institution; 

3. The Financial Institution does not hold itself out as an investment vehicle for 

unrelated parties; 

4. Twenty or fewer individuals own all of the debt interests and Equity Interests in 

the Financial Institution (disregarding debt interests owned by Participating FFis 

and deemed-compliant FFis and Equity Interests owned by an Entity if that Entity 

owns 100 percent of the Equity Interests in the Financial Institution and is itself a 

sponsored Financial Institution described in this paragraph C); and 

5. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity has registered as a sponsoring entity pursuant to 

applicable registration requirements; 

b) The sponsoring entity agrees to perform, on behalf of the Financial Institution, 

all due diligence, withholding, reporting, and other requirements that the 

Financial Institution would have been required to perform if it were a 

Reporting Estonian Financial Institution and retains documentation collected 

with respect to the Financial Institution for a period of six years; 

c) The sponsoring entity identifies the Financial Institution m all reporting 

completed on the Financial Institution's behalf; and 

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d) The sponsoring entity has not had its status as a sponsor revoked. 

D. Investment Advisors and Investment Managers. An Investment Entity established 

in Estonia that is a financial institution solely because it (1) renders investment advice 

to, and acts on behalf of, or (2) manages portfolios for, and acts on behalf of, a 

customer for the purposes of investing, managing, or administering funds deposited in 

the name of the customer with a Financial Institution other than a Nonparticipating 

Financial Institution. 

E. Collective Investment Vehicle. An Investment Entity established in Estonia that is 

regulated as a collective investment vehicle, provided that all of the interests in the 

collective investment vehicle (including debt interests in excess of $50,000) are held 

by or through one or more exempt beneficial owners, Active NFFEs described in 

subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. 

Persons, or Financial Institutions that are not Nonparticipating Financial Institutions. 

F. Special Rules. The following rules apply to an Investment Entity: 

1. With respect to interests in an Investment Entity that is a collective investment 

vehicle described in paragraph E of this section, the reporting obligations of any 

Investment Entity (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled. 

2. With respect to interests in: 

a) An Investment Entity established in a Partner Jurisdiction that is regulated as a 

collective investment vehicle, all of the interests in which (including debt 

interests in excess of $50,000) are held by or through one or more exempt 

beneficial owners, Active NFFEs described in subparagraph B(4) of section VI 

of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial 

Institutions that are not Nonparticipating Financial Institutions; or 

b) An Investment Entity that is a qualified collective investment vehicle under 

relevant U.S. Treasury Regulations; 

the reporting obligations of any Investment Entity that is an Estonian Financial 

Institution (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled. 

3. With respect to interests in an Investment Entity established in Estonia that is not 

described in paragraph E or subparagraph F(2) of this section, consistent with 

paragraph 3 of Article 5 of the Agreement, the reporting obligations of all other 

Investment Entities with respect to such interests shall be deemed fulfilled if the 

information required to be reported by the first-mentioned Investment Entity 

pursuant to the Agreement with respect to such interests is reported by such 

Investment Entity or another person. 

9 
V. Accounts Excluded from Financial Accounts. The following accounts are excluded 

from the definition of Financial Accounts and therefore shall not be treated as U.S. 

Reportable Accounts. 

A. Certain Savings Accounts. 

1. Retirement and Pension Account. A retirement or pension account maintained in 

Estonia that satisfies the following requirements under the laws of Estonia. 

a) The account is subject to regulation as a personal retirement account or is part 

of a registered or regulated retirement or pension plan for the provision of 

retirement or pension benefits (including disability or death benefits); 

b) The account is tax-favored (i.e., contributions to the account that would 

otherwise be subject to tax under the laws of Estonia are deductible or 

excluded from the gross income of the account holder or taxed at a reduced 

rate, or taxation of investment income from the account is deferred or taxed at 

a reduced rate); 

c) Annual information reporting is required to the tax authorities in Estonia with 

respect to the account; 

d) Withdrawals are conditioned on reaching a specified retirement age, disability, 

or death, or penalties apply to withdrawals made before such specified events; 

and 

e) Either (i) annual contributions are limited to $50,000 or less, or (ii) there is a 

maximum lifetime contribution limit to the account of $1,000,000 or less, in 

each case applying the rules set forth in Annex I for account aggregation and 

currency translation. 

2. Non-Retirement Savings Accounts. An account maintained in Estonia (other than 

an insurance or Annuity Contract) that satisfies the following requirements under 

the laws ofEstonia. 

a) The account is subject to regulation as a savings vehicle for purposes other 

than for retirement; 

b) The account is tax-favored (i.e., contributions to the account that would 

otherwise be subject to tax under the laws of Estonia are deductible or 

excluded from the gross income of the account holder or taxed at a reduced 

rate, or taxation of investment income from the account is deferred or taxed at 

a reduced rate); 

c) Withdrawals are conditioned on meeting specific criteria related to the purpose 

of the savings account (for example, the provision of educational or medical 

benefits), or penalties apply to withdrawals made before such criteria are met; 

and 

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d) Annual contributions are limited to $50,000 or less, applying the rules set 

forth in Annex I for account aggregation and currency translation. 

3. Certain Other Accounts. 

a) Pension contracts, provided by life assurance undertakings (defined under the 

Funded Pensions Act § 41 ); and 

b) Insurance contracts for a supplementary funded pension, provided by life 

assurance undertakings (defined under the Funded Pensions Act§ 62). 

B. Certain Term Life Insurance Contracts. A life insurance contract maintained in 

Estonia with a coverage period that will end before the insured individual attains age 

90, provided that the contract satisfies the following requirements: 

1. Periodic premiums, which do not decrease over time, are payable at least annually 

during the period the contract is in existence or until the insured attains age 90, 

whichever is shorter; 

2. The contract has no contract value that any person can access (by withdrawal, 

loan, or otherwise) without terminating the contract; 

3. The amount (other than a death benefit) payable upon cancellation or termination 

of the contract cannot exceed the aggregate premiums paid for the contract, less 

the sum of mortality, morbidity, and expense charges (whether or not actually 

imposed) for the period or periods of the contract's existence and any amounts 

paid prior to the cancellation or termination of the contract; and 

4. The contract is not held by a transferee for value. 

C. Account Held By an Estate. An account maintained in Estonia that is held solely by 

an estate if the documentation for such account includes a copy ofthe deceased's will 

or death certificate. 

D. Escrow Accounts. An account maintained in Estonia established in connection with 

any ofthe following: 

1. A court order or judgment. 

2. A sale, exchange, or lease of real or personal property, provided that the account 

satisfies the following requirements: 

a) The account is funded solely with a down payment, earnest money, deposit in 

an amount appropriate to secure an obligation directly related to the 

transaction, or a similar payment, or is funded with a financial asset that is 

deposited in the account in connection with the sale, exchange, or lease of the 

property; 

b) The account is established and used solely to secure the obligation of the 

purchaser to pay the purchase price for the property, the seller to pay any 

11 
contingent liability, or the lessor or lessee to pay for any damages relating to 

the leased property as agreed under the lease; 

c) The assets of the account, including the income earned thereon, will be paid or 

otherwise distributed for the benefit of the purchaser, seller, lessor, or lessee 

(including to satisfy such person's obligation) when the property is sold, 

exchanged, or surrendered, or the lease terminates; 

d) The account is not a margin or similar account established in connection with 

a sale or exchange of a financial asset; and 

e) The account is not associated with a credit card account. 

3. An obligation of a Financial Institution servicing a loan secured by real property 

to set aside a portion of a payment solely to facilitate the payment of taxes or 

insurance related to the real property at a later time. 

4. An obligation of a Financial Institution solely to facilitate the payment of taxes at 

a later time. 

E. Partner Jurisdiction Accounts. An account maintained in Estonia and excluded 

from the definition of Financial Account under an agreement between the United 

States and another Partner Jurisdiction to facilitate the implementation of FATCA, 

provided that such account is subject to the same requirements and oversight under 

the laws of such other Partner Jurisdiction as if such account were established in that 

Partner Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in 

that Partner Jurisdiction. 

VI. Definitions. The following additional definitions apply to the descriptions above: 

A. Reporting Model 1 FFI. The term Reporting Model 1 FFI means a Financial 

Institution with respect to which a non-U.S. government or agency thereof agrees to 

obtain and exchange information pursuant to a Model 1 IGA, other than a Financial 

Institution treated as a Nonparticipating Financial Institution under the Model 1 IGA. 

For purposes of this defmition, the term Model 1 IGA means an arrangement between 

the United States or the Treasury Department and a non-U.S. government or one or 

more agencies thereof to implement FATCA through reporting by Financial 

Institutions to such non-U.S. government or agency thereof, followed by automatic 

exchange of such reported information with the IRS. 

B. Participating FFI. The term Participating FFI means a Financial Institution that has 

agreed to comply with the requirements of an FFI Agreement, including a Financial 

Institution described in a Model 2 IGA that has agreed to comply with the 

requirements of an FFI Agreement. The term Participating FFI also includes a 

qualified intermediary branch of a Reporting U.S. Financial Institution, unless such 

branch is a Reporting Model 1 FFI. For purposes of this definition, the term FFI 

Agreement means an agreement that sets forth the requirements for a Financial 

Institution to be treated as complying with the requirements of section 14 71 (b) of the 

U.S. Internal Revenue Code. In addition, for purposes of this definition, the term 

Model 2 IGA means an arrangement between the United States or the Treasury 

12 
Department and a non-U.S. government or one or more agencies thereof to facilitate 

the implementation of FATCA through reporting by Financial Institutions directly to 

the IRS in accordance with the requirements of an FFI Agreement, supplemented by 

the exchange of information between such non-U.S. government or agency thereof 

and the IRS. 

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