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 

of FATCA 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 of FATCA 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 of 

Estonia 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 FATCA 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;
2

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” of the 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. 
3

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:

(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 1(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.

l) 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 
4

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 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 

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

include 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 1(s)(1) 

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 noninvestment-linked, 

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 
5

exchange. For purposes of this subparagraph 1(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 Institution on or after July 1, 2014, a 

Financial Institution is not required to apply the preceding sentence prior to 

January 1, 2016.

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 nonfinancial 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. 
6

y) 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.

z) The term “Cash Value” means the greater of (i) the amount that the policyholder 

is entitled to receive upon surrender or termination of the contract (determined 

without reduction for any surrender charge or policy loan), and (ii) 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: 

(1) 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 

of the 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 
7

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 contract. If no person can access the Cash Value or 

change the beneficiary, the Account Holder is any person named as the owner in 

the contract and any person with a vested entitlement to payment under the terms 

of the contract. Upon the maturity of a Cash Value Insurance Contract or an 

Annuity Contract, each person entitled to receive a payment under the contract is 

treated as an Account Holder.

ee) The term “U.S. Person” means a U.S. citizen or resident individual, a partnership 

or corporation organized in the United States or under the laws of the United 

States or any State thereof, a trust if (i) a court within the United States would 

have authority under applicable law to render orders or judgments concerning 

substantially all issues regarding administration of the trust, and (ii) one or more 

U.S. persons have the authority to control all substantial decisions of the trust, or 

an estate of a decedent that is a citizen or resident of the United States. This 

subparagraph 1(ee) shall be interpreted in accordance with the U.S. Internal 

Revenue Code.

ff) The term “Specified U.S. Person” means a U.S. Person, other than: (i) a 

corporation the stock of which is regularly traded on one or more established 

securities markets; (ii) any corporation that is a member of the same expanded 

affiliated group, as defined in section 1471(e)(2) of the U.S. Internal Revenue 

Code, as a corporation described in clause (i); (iii) the United States or any wholly 

owned agency or instrumentality thereof; (iv) any State of the United States, any 

U.S. Territory, any political subdivision of any of the foregoing, or any wholly 

owned agency or instrumentality of any one or more of the foregoing; (v) any 

organization exempt from taxation under section 501(a) of the U.S. Internal 

Revenue Code or an individual retirement plan as defined in section 7701(a)(37) 

of the U.S. Internal Revenue Code; (vi) any bank as defined in section 581 of the 

U.S. Internal Revenue Code; (vii) any real estate investment trust as defined in 

section 856 of the U.S. Internal Revenue Code; (viii) any regulated investment 

company as defined in section 851 of the U.S. Internal Revenue Code or any 

entity registered with the U.S. Securities and Exchange Commission under the 

Investment Company Act of 1940 (15 U.S.C. 80a-64); (ix) any common trust fund 

as defined in section 584(a) of the U.S. Internal Revenue Code; (x) any trust that 

is exempt from tax under section 664(c) of the U.S. Internal Revenue Code or that 

is described in section 4947(a)(1) of the U.S. Internal Revenue Code; (xi) a dealer 

in securities, commodities, or derivative financial instruments (including notional 

principal contracts, futures, forwards, and options) that is registered as such under 

the laws of the United States or any State; (xii) a broker as defined in section 
8

6045(c) of the U.S. Internal Revenue Code; or (xiii) any tax-exempt trust under a 

plan that is described in section 403(b) or section 457(g) of the U.S. Internal 

Revenue Code. 

gg) The term “Entity” means a legal person or a legal arrangement such as a trust. 

hh) The term “Non-U.S. Entity” means an Entity that is not a U.S. Person.

ii) The term “U.S. Source Withholdable Payment” means any payment of interest 

(including any original issue discount), dividends, rents, salaries, 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 foregoing, 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) of the U.S. 

Internal Revenue Code.

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

ll) 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.

Article 2

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 
9

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 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 
10

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; 

(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

1. 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 of Estonia:

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

the information described in subparagraphs 2(a)(1) through 2(a)(4) of 

Article 2 of this Agreement; 
11

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

information described in subparagraphs 2(a)(1) 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)(1) 

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. 

4. Notwithstanding paragraph 3 of this Article, with respect to each Reportable Account that 

is maintained by a Reporting Financial Institution as of June 30, 2014, and subject to paragraph 4 

of Article 6 of this Agreement, the Parties are not required to obtain and include in the exchanged 

information the Estonian TIN or the U.S. TIN, as applicable, of any relevant person 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 of the 

relevant person, if the 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 of the 

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 
12

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 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. 

10. This Agreement shall terminate on September 30, 2015, 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

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

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

section 1471 of the U.S. Internal Revenue Code if Estonia 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 1441 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 
13

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 1471 of the 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.

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 of the 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 
14

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 deemed-compliant FFI or exempt beneficial 

owner, as appropriate, for purposes of section 1471 of the U.S. Internal 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 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 
15

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 firstmentioned 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 

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 Party 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
16

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 Co-operation 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

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 of FATCA 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 FATCA 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.
17

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.

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 _____, in duplicate, in the English language, this __ day of _____, 20__.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

THE UNITED STATES OF AMERICA: THE REPUBLIC OF ESTONIA:
1

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 
2

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

individuals (“Preexisting 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 

Preexisting 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 Preexisting Individual Accounts are not required to be reviewed, 

identified, or reported as U.S. Reportable Accounts:

1. Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account with a balance or value that does not exceed $50,000 as of June 30, 

2014.

2. Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account that is a Cash Value Insurance Contract or an Annuity Contract with a 

balance or value of $250,000 or less as of June 30, 2014.

3. A Preexisting Individual Account that is a Cash Value Insurance Contract 

or an Annuity Contract, provided the law or regulations of Estonia or the United 

States effectively prevent the sale of such a Cash Value Insurance Contract or an 

Annuity Contract to U.S. residents (e.g., if the relevant Financial Institution does 

not have the required registration under U.S. law, and the law of Estonia requires 

reporting or withholding with respect to insurance products held by residents of 

Estonia).

4. A Depository Account with a balance of $50,000 or less.

B. Review Procedures for Preexisting Individual Accounts With a Balance or 

Value as of June 30, 2014, that Exceeds $50,000 ($250,000 for a Cash Value 

Insurance Contract or Annuity Contract), But Does Not Exceed $1,000,000 (“Lower 

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 following U.S. indicia:

a) Identification of the Account Holder as a U.S. citizen or resident;

b) Unambiguous indication of a U.S. place of birth;

c) Current U.S. mailing or residence address (including a U.S. post 

office box);

d) Current U.S. telephone number;

e) Standing instructions to transfer funds to an account maintained in 
3

the United States;

f) Currently effective power of attorney or signatory authority 

granted to a person with a U.S. address; or

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(1) 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 of the U.S. indicia listed in subparagraph B(1) of this 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(1) 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. 
4

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 

that are the only telephone numbers associated with the account, 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); and

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

section VI of this Annex I, establishing the Account Holder’s nonU.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:

(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); and

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

section VI of this Annex I, establishing the Account Holder’s nonU.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:

(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); or

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

section VI of this Annex I, establishing the Account Holder’s nonU.S. status.

C. Additional Procedures Applicable to Preexisting Individual Accounts That 

Are Lower Value Accounts.
5

1. Review of Preexisting Individual Accounts that are Lower Value Accounts 

for U.S. indicia must be completed by June 30, 2016. 

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 U.S. 

indicia described in subparagraph B(1) 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 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(1) 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) of this 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(1) 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
6

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 D(2) of this section if the Reporting 

Estonian Financial Institution’s electronically searchable information includes the 

following:

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(1) 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(1) 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 
7

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 

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, 2014, 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 of 2015 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 re-apply 

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(1) of this 
8

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 

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(1) 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, 
9

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).

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 selfcertification 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 selfcertification, 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. Entity 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 
10

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.

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 self-certification 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 1(b) of Article 4 of the Agreement.
11

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.

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 1(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.
12

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 

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.
13

V. New Entity 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 Entity Accounts. With respect to New Entity Accounts not described 

in paragraph A of this section, the Reporting Estonian Financial Institution 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 Specified 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 self-certification from 
14

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 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.

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)(j) 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:
15

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 of the 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 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 of the NFFE consist of holding (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 the NFFE;

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 
16

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;

ii. It is exempt from income tax in its jurisdiction of residence; 

iii. It has no shareholders or members who have a proprietary or 

beneficial interest in its income or assets;

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 
17

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.

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 
18

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 antimoney 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 beneficiary is a Specified U.S. Person, the 

Reporting Estonian Financial Institution must follow the procedures in subparagraph B(3) 

of section II of this 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.
1

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 of Estonia and the United States: (1) 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 1471 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. 

1. 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; 
2

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 

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 of the 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

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; 

b) The fund receives at least 50 percent of its total contributions (other than transfers 

of assets from other 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(1) 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(1) 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 

of the 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 
4

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).

G. Investment Entity Wholly Owned by Exempt Beneficial Owners. An Entity that is an 

Estonian Financial Institution solely because it is an Investment Entity, provided that 

each direct holder of an Equity Interest in the Entity is an exempt beneficial owner, and 

each 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

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 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 of Estonia as) (a) a bank or (b) a credit union or similar cooperative credit 

organization that is operated without profit;
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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;

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 
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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 NonReporting 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 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(1) or B(2) of this section having a sponsoring 

entity that complies with the requirements of subparagraph B(3) of this 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 corporation1 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. 

 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 any 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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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; 

d) 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; 

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 Model 1 

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 
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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 in all reporting 

completed on the Financial Institution’s behalf; and 

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, 
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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.

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. 
11

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 of Estonia.

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

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.
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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 of the deceased’s will or 

death certificate.

D. Escrow Accounts. An account maintained in Estonia established in connection with any 

of the 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 

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:
13

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 definition, 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 1471(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 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.