AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF 

AMERICA AND THE GOVERNMENT OF THE BRITISH VIRGIN ISLANDS TO 

IMPROVE TAX COMPLIANCE AND TO IMPLEMENT FATCA

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

Virgin Islands (each, a “Party,” and together, the “Parties”) desire to conclude an agreement to 

improve tax compliance;

Noting that the Government of the United Kingdom of Great Britain and Northern Ireland (the 

“United Kingdom”) provided a copy of a Letter of Entrustment, via diplomatic note of May 28, 

2014, dated July 15, 2010, to the Government of the United States of America in which the 

United Kingdom entrusts the Government of the British Virgin Islands to negotiate and 

conclude Agreements relating to taxation that provide for exchange of information on tax 

matters to the OECD standard. In accordance with this entrustment letter, the United Kingdom 

via the Foreign and Commonwealth Office provided a copy of a letter dated March 24, 2014,

authorizing the Government of the British Virgin Islands to sign an agreement with the United 

States on information exchange to facilitate implementation of the Foreign Account Tax 

Compliance Act; 

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 British Virgin Islands is supportive of the underlying policy 

goal of FATCA to improve tax compliance;

Whereas, FATCA has raised a number of issues, including that British Virgin Islands financial 

institutions may not be able to comply with certain aspects of FATCA due to domestic legal 

impediments; 

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 British 

Virgin Islands financial institutions to avoid duplicative reporting;
2

Whereas, an intergovernmental approach to FATCA implementation would address legal 

impediments and reduce burdens for British Virgin Islands financial institutions;

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

for the implementation of FATCA based on domestic reporting and automatic exchange, subject 

to the confidentiality and other protections provided for herein, including the provisions 

limiting the use of the information exchanged;

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 “British Virgin Islands” means the United Kingdom and Northern 

Ireland’s territory of the Virgin Islands.

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
3

(2) in the case of the British Virgin Islands, the Financial Secretary or a 

person or authority designated by him in writing.

g) The term “Financial Institution” means a Custodial Institution, a Depository 

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

h) The term “Custodial Institution” means any Entity that holds, as a substantial 

portion of its business, financial assets for the account of others. An entity holds 

financial assets for the account of others as a substantial portion of its business if 

the entity’s gross income attributable to the holding of financial assets and 

related financial services equals or exceeds 20 percent of the entity’s gross 

income during the shorter of: (i) the three-year period that ends on December 31 

(or the final day of a non-calendar year accounting period) prior to the year in 

which the determination is being made; or (ii) the period during which the entity 

has been in existence.

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

the ordinary course of a banking or similar business. 

j) The term “Investment Entity” means any Entity that conducts as a business (or 

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

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

(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.
4

l) The term “British Virgin Islands Financial Institution” means (i) any 

Financial Institution organized under the laws of the British Virgin Islands, but 

excluding any branch of such Financial Institution that is located outside the 

British Virgin Islands, and (ii) any branch of a Financial Institution not 

organized under the laws of the British Virgin Islands, if such branch is located 

in the British Virgin Islands. 

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 British Virgin Islands Financial Institution” means any 

British Virgin Islands Financial Institution that is not a Non-Reporting British 

Virgin Islands Financial Institution.

o) The term “Non-Reporting British Virgin Islands Financial Institution”

means any British Virgin Islands Financial Institution, or other Entity organized 

under the laws of the British Virgin Islands, that is described in Annex II as a 

Non-Reporting British Virgin Islands Financial Institution or that otherwise 

qualifies as a deemed-compliant FFI or an exempt beneficial owner under 

relevant U.S. Treasury Regulations.

p) 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 British Virgin Islands 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.

q) 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(q)(1) of this Article, any equity or debt interest in the Financial 

Institution (other than interests that are regularly traded on an established 
5

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 

exchange. For purposes of this subparagraph 1(q), 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.

r) 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.

s) 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 
6

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

instrument).

t) 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. 

u) 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.

v) 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. 

w) 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.

x) 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 
7

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.

y) The term “U.S. Reportable Account” means a Financial Account maintained 

by a Reporting British Virgin Islands 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.

z) The term “Account Holder” means the person listed or identified as the holder 

of a Financial Account by the Financial Institution that maintains the account. A 

person, other than a Financial Institution, holding a Financial Account for the 

benefit or account of another person as agent, custodian, nominee, signatory, 

investment advisor, or intermediary, is not treated as holding the account for 

purposes of this Agreement, and such other person is treated as holding the 

account. For purposes of the immediately preceding sentence, the term 

“Financial Institution” does not include a Financial Institution organized or

incorporated in a U.S. Territory. In the case of a Cash Value Insurance Contract 

or an Annuity Contract, the Account Holder is any person entitled to access the 

Cash Value or change the beneficiary of the 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.

aa) 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(aa) shall be interpreted in accordance with the U.S. 

Internal Revenue Code.
8

bb) 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 

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(b) of the U.S. Internal 

Revenue Code. 

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

 

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

ee) 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.

ff) 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 
9

or value in an Entity. Notwithstanding the foregoing, the British Virgin Islands 

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.

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

hh) 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 

U.S. REPORTABLE ACCOUNTS

1. Subject to the provisions of Article 3 of this Agreement, the British Virgin Islands shall 

obtain the information specified in paragraph 2 of this Article with respect to all U.S. 

Reportable Accounts and shall annually exchange this information with the United States on an 

automatic basis.

2. The information to be obtained and exchanged with respect to each U.S. Reportable 

Account of each Reporting British Virgin Islands Financial Institution is:

a) 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;

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

number); 
10

c) the name and identifying number of the Reporting British Virgin Islands 

Financial Institution;

d) 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; 

e) in the case of any Custodial Account: 

(1) 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 

(2) 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 British Virgin 

Islands Financial Institution acted as a custodian, broker, nominee, or 

otherwise as an agent for the Account Holder; 

f) 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

g) in the case of any account not described in subparagraph 2(e) or 2(f) of this 

Article, the total gross amount paid or credited to the Account Holder with 

respect to the account during the calendar year or other appropriate reporting 

period with respect to which the Reporting British Virgin Islands 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.

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 laws of the British Virgin Islands. 
11

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

information described in subparagraphs 2(a) through 2(d) of Article 2 of this 

Agreement; 

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

information described in subparagraphs 2(a) through 2(g) of Article 2 of this 

Agreement, except for gross proceeds described in subparagraph 2(e)(2) of 

Article 2 of this Agreement; and

c) the information to be obtained and exchanged with respect to 2016 and 

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

2(g) of Article 2 of this Agreement;

4. Notwithstanding paragraph 3 of this Article, with respect to each U.S. Reportable 

Account maintained by a Reporting British Virgin Islands Financial Institution as of June 30, 

2014, and subject to paragraph 2 of Article 6 of this Agreement, the British Virgin Islands is not 

required to obtain and include in the exchanged information the U.S. TIN of any relevant 

person if such U.S. TIN is not in the records of the Reporting British Virgin Islands Financial 

Institution. In such a case, the British Virgin Islands shall obtain and include in the exchanged 

information the date of birth of the relevant person, if the Reporting British Virgin Islands 

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 the British Virgin Islands and the United States shall 

enter into an agreement or arrangement under the mutual agreement procedure provided for in 

Article 8 of this Agreement, 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
12

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 Article 9 of this Agreement, including the provisions limiting the use of the 

information exchanged.

ARTICLE 4

APPLICATION OF FATCA TO BRITISH VIRGIN ISLANDS FINANCIAL 

INSTITUTIONS

1. Treatment of Reporting British Virgin Islands Financial Institutions. Each 

Reporting British Virgin Islands Financial Institution shall be treated as complying with, and 

not subject to withholding under, section 1471 of the U.S. Internal Revenue Code if the British 

Virgin Islands complies with its obligations under Articles 2 and 3 of this Agreement with 

respect to such Reporting British Virgin Islands Financial Institution, and the Reporting British 

Virgin Islands Financial Institution:

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

Islands Competent Authority the information required to be reported in 

paragraph 2 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 British Virgin Islands 

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 applicable registration requirements on the IRS FATCA 

registration website;

d) to the extent that a Reporting British Virgin Islands 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 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 British Virgin Islands Financial Institution that is not 

described in subparagraph 1(d) of this Article and that makes a payment of, or 
13

acts as an intermediary with respect to, a U.S. Source Withholdable Payment to 

any Nonparticipating Financial Institution, the Reporting British Virgin Islands 

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 British Virgin Islands 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 

British Virgin Islands 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 British Virgin Islands 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 paragraph 2 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 British Virgin Islands 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, British Virgin Islands retirement 

plans described in Annex II. For this purpose, a British Virgin Islands retirement plan includes 

an Entity established or located in, and regulated by, the British Virgin Islands, 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 the British Virgin Islands 

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 British Virgin Islands 

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 British Virgin Islands 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 deemedcompliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has a Related 

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

expiration of the transitional rule for limited FFIs and limited branches under relevant U.S. 

Treasury Regulations, such British Virgin Islands Financial Institution shall continue to be in 
14

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

U.S. Internal Revenue Code, provided that:

a) the British Virgin Islands 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 British Virgin 

Islands 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) the British Virgin Islands 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; and

b) the British Virgin Islands 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.

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

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

implementing this Agreement, the British Virgin Islands may use, and may permit the British 

Virgin Islands 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.
15

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, the U.S. Competent Authority may make an inquiry directly to a Reporting British 

Virgin Islands Financial Institution where it 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 U.S. Competent Authority shall notify the British 

Virgin Islands Competent Authority when the U.S. Competent Authority makes such an inquiry 

of a Reporting British Virgin Islands Financial Institution regarding the Reporting British 

Virgin Islands Financial Institution’s compliance with the conditions set forth in this 

Agreement.

2. Significant Non-Compliance. 

a) The U.S. Competent Authority shall notify the British Virgin Islands Competent 

Authority when the U.S. Competent Authority has determined that there is 

significant non-compliance with the obligations under this Agreement with 

respect to a Reporting British Virgin Islands Financial Institution. The British 

Virgin Islands Competent Authority shall apply its domestic law (including 

applicable penalties) to address the significant non-compliance described in the 

notice. 

b) If such enforcement actions do not resolve the non-compliance within a period 

of 18 months after notification of significant non-compliance is first provided by 

the U.S. Competent Authority, the United States shall treat the Reporting British 

Virgin Islands Financial Institution as a Nonparticipating Financial Institution 

pursuant to this subparagraph 2(b). 

3. Reliance on Third Party Service Providers. The British Virgin Islands may allow 

Reporting British Virgin Islands Financial Institutions to use third party service providers to 

fulfill the obligations imposed on such Reporting British Virgin Islands Financial Institutions 

by the British Virgin Islands, as contemplated in this Agreement, but these obligations shall 

remain the responsibility of the Reporting British Virgin Islands Financial Institutions.

4. Prevention of Avoidance. The British Virgin Islands shall implement as it deems

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

work together to develop a practical and effective alternative approach to achieve the policy 

objectives of foreign passthru payment and gross proceeds withholding that minimizes burden. 

2. Documentation of Accounts Maintained as of June 30, 2014. With respect to U.S. 

Reportable Accounts maintained by a Reporting British Virgin Islands Financial Institution as 

of June 30, 2014, the British Virgin Islands commits to establish, by January 1, 2017, for 

reporting with respect to 2017 and subsequent years, rules requiring Reporting British Virgin 

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

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

ARTICLE 7

CONSISTENCY IN THE APPLICATION OF FATCA TO PARTNER JURISDICTIONS 

1. The British Virgin Islands 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 British 

Virgin Islands 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 the British Virgin Islands described in Articles 2 and 3 of this Agreement, 

and subject to the same terms and conditions as described therein and in Articles 5, 6, 7, 10 and 

11 of this Agreement. 

2. The United States shall notify the British Virgin Islands 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 the British Virgin Islands declines in 

writing the application thereof.

ARTICLE 8

MUTUAL AGREEMENT PROCEDURE

1. Where difficulties or doubts arise between the Parties regarding the implementation, 

application, or interpretation of this Agreement, the Competent Authorities shall endeavor to 

resolve the matter by mutual agreement.

2. The Competent Authorities may adopt and implement procedures to facilitate the 

implementation of this Agreement.

3. The Competent Authorities may communicate with each other directly for purposes of 

reaching a mutual agreement under this Article.

ARTICLE 9

CONFIDENTIALITY
17

1. The British Virgin Islands Competent Authority shall treat any information received 

from the United States pursuant to Article 5 of this Agreement as confidential and shall only 

disclose such information as may be necessary to carry out its obligations under this 

Agreement. Such information may be disclosed in connection with court proceedings or 

administrative actions related to the performance of the obligations of the British Virgin Islands 

under this Agreement.

2. Information provided to the U.S. Competent Authority pursuant Articles 2 and 5 of this 

Agreement shall be treated as confidential and may be disclosed only to persons or authorities 

(including courts and administrative bodies) of the Government of the United States concerned 

with the assessment, collection, or administration of, the enforcement or prosecution in respect 

of, or the determination of appeals in relation to, U.S. federal taxes, or the oversight of such 

functions. Such persons or authorities shall use such information only for such purposes. Such 

persons may disclose the information in public court proceedings or in judicial decisions. The 

information may not be disclosed to any other person, entity, authority, or jurisdiction. 

Notwithstanding the foregoing, where the British Virgin Islands provides prior, written consent, 

the information may be used for purposes permitted under the provisions of a mutual legal 

assistance treaty in force between the Parties that allows for the exchange of tax information.

ARTICLE 10

CONSULTATIONS AND AMENDMENTS

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

independently of the mutual agreement procedure described in paragraph 1 of Article 8 of this 

Agreement, 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 12 of this Agreement.

ARTICLE 11

ANNEXES

The Annexes form an integral part of this Agreement.

ARTICLE 12

TERM OF AGREEMENT

1. This Agreement shall enter into force on the date of the British Virgin Islands’ written 

notification to the United States that the British Virgin Islands has completed its necessary 

internal procedures for entry into force of this Agreement. 
18

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. 

4. If this Agreement is terminated, both Parties shall remain bound by the provisions of 

Article 9 of this Agreement with respect to any information obtained under this Agreement.
19

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

Governments, have signed this Agreement. 

Done at Washington, in duplicate, in the English language, this thirtieth day of June, 2014.

FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF THE 

BRITISH VIRGIN ISLANDS:
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. The British Virgin Islands shall require that Reporting British Virgin Islands

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 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, the 

British Virgin Islands may permit Reporting British Virgin Islands Financial Institutions 

to rely on the procedures described in relevant U.S. Treasury Regulations to establish 
2

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

Nonparticipating Financial Institution. The British Virgin Islands may permit 

Reporting British Virgin Islands Financial Institutions to make such election separately 

for each section of this Annex I either with respect to all relevant Financial Accounts or, 

separately, with respect to any clearly identified group of such accounts (such as by line 

of business or the location of where the account is maintained). 

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

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

by individuals (“Preexisting Individual Accounts”).

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

Reporting British Virgin Islands 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 the British Virgin 

Islands 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 the British Virgin 

Islands 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 the British Virgin Islands requires reporting or withholding with 

respect to insurance products held by residents of the British Virgin Islands).

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 British Virgin Islands

Financial Institution must review electronically searchable data maintained by 
3

the Reporting British Virgin Islands 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 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial Institution is not 

required to treat an account as a U.S. Reportable Account if:
4

a) Where the Account Holder information unambiguously indicates 

a U.S. place of birth, the Reporting British Virgin Islands Financial 

Institution obtains, or has previously reviewed and maintains a record of:

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

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

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

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

identification evidencing the Account Holder’s citizenship or 

nationality in a country other than the United States; and

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

Nationality of the United States or a reasonable explanation of: 

(a) The reason the Account Holder does not have such 

a certificate despite relinquishing U.S. citizenship; or

(b) The reason the Account Holder did not obtain U.S. 

citizenship at birth.

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

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

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

Reporting British Virgin Islands 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 

non-U.S. status.

c) Where the Account Holder information contains standing 

instructions to transfer funds to an account maintained in the United 

States, the Reporting British Virgin Islands 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
5

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

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

non-U.S. status.

d) Where the Account Holder information contains a currently 

effective power of attorney or signatory authority granted to a person 

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

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

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

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

Virgin Islands 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 

non-U.S. status.

C. Additional Procedures Applicable to Preexisting Individual Accounts That 

Are Lower Value Accounts.

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 British Virgin Islands 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.
6

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 British Virgin Islands

Financial Institution must review electronically searchable data maintained by 

the Reporting British Virgin Islands Financial Institution for any of the U.S. 

indicia described in subparagraph B(1) of this section.

2. Paper Record Search. If the Reporting British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British 

Virgin Islands Financial Institution pursuant to AML/KYC Procedures or 

for other regulatory purposes;

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

effect; and

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

3. Exception Where Databases Contain Sufficient Information. A 

Reporting British Virgin Islands Financial Institution is not required to perform 

the paper record search described in subparagraph D(2) of this section if the 

Reporting British Virgin Islands Financial Institution’s electronically searchable 

information includes the following:

a) The Account Holder’s nationality or residence status;
7

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

currently on file with the Reporting British Virgin Islands Financial 

Institution;

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

any, with the Reporting British Virgin Islands 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 British Virgin Islands 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 British 

Virgin Islands 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 Reporting British Virgin Islands 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.
8

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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial Institution applies the 

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

Value Account, the Reporting British Virgin Islands 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) 
9

of this section being associated with the account, then the Reporting British 

Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 the British Virgin 

Islands 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. 
10

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 British Virgin Islands Financial Institution must obtain a 

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

the Reporting British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial 

Institution must treat the account as a U.S. Reportable Account and obtain a selfcertification 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 British Virgin Islands Financial Institution to 

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

unreliable, the Reporting British Virgin Islands Financial Institution cannot rely 

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

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

purposes. If the Reporting British Virgin Islands Financial Institution is unable 

to obtain a valid self-certification, the Reporting British Virgin Islands 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 British Virgin Islands 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 the British Virgin 

Islands 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.

 
11

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 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial Institution must 

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

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

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

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

2. Determine Whether a Non-U.S. Entity Is a Financial Institution.
12

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 British Virgin Islands 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.

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

Reporting British Virgin Islands Financial Institution may determine that 

the Account Holder is a British Virgin Islands Financial Institution or 

other Partner Jurisdiction Financial Institution if the Reporting British 

Virgin Islands 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 British Virgin Islands 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 a British Virgin Islands 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 British Virgin Islands Financial 

Institution or other Partner Jurisdiction Financial Institution, then the 

Reporting British Virgin Islands 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 British Virgin Islands Financial 

Institution:
13

(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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial Institution 

may rely on information collected and maintained pursuant to 

AML/KYC Procedures.

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

Passive NFFE, the Reporting British Virgin Islands 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 British Virgin Islands 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
14

(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 British Virgin Islands 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 British 

Virgin Islands Financial Institution must redetermine the status of the account in 

accordance with the procedures set forth in paragraph D of this section.

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 British Virgin Islands 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 the British Virgin 

Islands 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 British Virgin Islands Financial Institution maintaining such 

account implements policies and procedures to prevent an account balance owed to the 

Account Holder that exceeds $50,000.
15

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

described in paragraph A of this section, the Reporting British Virgin Islands Financial 

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

(ii) a British Virgin Islands 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 British Virgin 

Islands Financial Institution may determine that the Account Holder is an Active 

NFFE, a British Virgin Islands Financial Institution, or other Partner Jurisdiction 

Financial Institution if the Reporting British Virgin Islands 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 British Virgin Islands Financial Institution, as applicable. 

2. If the Account Holder is a British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial Institution must treat the 

account as a U.S. Reportable Account.

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

Virgin Islands 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 the Account Holder or such person. If any such 

person is a U.S. citizen or resident, the Reporting British Virgin Islands

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 British 

Virgin Islands Financial Institution or other Partner Jurisdiction Financial 
16

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 a British Virgin Islands 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 British Virgin Islands Financial Institution may not rely on a self-certification 

or documentary evidence if the Reporting British Virgin Islands 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 British Virgin Islands Financial 

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

the British Virgin Islands to which such Reporting British Virgin Islands

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 the British Virgin Islands 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:
17

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 regularly 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;
18

h) The NFFE primarily engages in financing and hedging transactions 

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

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

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

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

Financial Institution;

i) The NFFE is an “excepted NFFE” as described in relevant U.S. 

Treasury Regulations; or

j) The NFFE meets all of the following requirements:

i. It is established and operated in its jurisdiction of residence 

exclusively for religious, charitable, scientific, artistic, cultural, 

athletic, or educational purposes; or it is established and 

operated in its jurisdiction of residence and it is a professional 

organization, business league, chamber of commerce, labor 

organization, agricultural or horticultural organization, civic 

league or an organization operated exclusively for the 

promotion of social welfare;

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.
19

5. Preexisting Account. A “Preexisting Account” means a Financial Account 

maintained by a Reporting British Virgin Islands 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 British Virgin Islands Financial Institution is required to aggregate all 

Financial Accounts maintained by the Reporting British Virgin Islands Financial 

Institution, or by a Related Entity, but only to the extent that the 

Reporting British Virgin Islands Financial Institution’s computerized systems 

link the Financial Accounts by reference to a data element such as client number 

or taxpayer identification number, and allow account balances or values to be 

aggregated. Each holder of a jointly held Financial Account shall be attributed 

the entire balance or value of the jointly held Financial Account for purposes of 

applying the aggregation requirements described in this paragraph 1.

2. Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a 

Reporting British Virgin Islands Financial Institution is required to take into 

account all Financial Accounts that are maintained by the Reporting British 

Virgin Islands Financial Institution, or by a Related Entity, but only to the extent 

that the Reporting British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial Institution is 

determining the balance or value.
20

D. Documentary Evidence. For purposes of this Annex I, acceptable documentary 

evidence includes any of the following:

1. A certificate of residence issued by an authorized government body (for 

example, a government or agency thereof, or a municipality) of the jurisdiction 

in which the payee claims to be a resident.

2. With respect to an individual, any valid identification issued by an 

authorized government body (for example, a government or agency thereof, or a 

municipality), that includes the individual’s name and is typically used for 

identification purposes.

3. With respect to an Entity, any official documentation issued by an 

authorized government body (for example, a government or agency thereof, or a 

municipality) that includes the name of the Entity and either the address of its 

principal office in the jurisdiction (or U.S. Territory) in which it claims to be a 

resident or the jurisdiction (or U.S. Territory) in which the Entity was 

incorporated or organized.

4. With respect to a Financial Account maintained in a jurisdiction with 

anti-money laundering rules that have been approved by the IRS in connection 

with a QI agreement (as described in relevant U.S. Treasury Regulations), any of 

the documents, other than a Form W-8 or W-9, referenced in the jurisdiction’s 

attachment to the QI agreement for identifying individuals or Entities.

5. Any financial statement, third-party credit report, bankruptcy filing, or 

U.S. Securities and Exchange Commission report.

E. Alternative Procedures for Financial Accounts Held by Individual 

Beneficiaries of a Cash Value Insurance Contract. A Reporting British Virgin 

Islands 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 British Virgin Islands Financial Institution has actual 

knowledge, or reason to know, that the beneficiary is a Specified U.S. Person. A 

Reporting British Virgin Islands 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 British Virgin Islands 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 British Virgin Islands Financial 

Institution has actual knowledge, or reason to know, that the beneficiary is a Specified 
21

U.S. Person, the Reporting British Virgin Islands 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, the British Virgin Islands may permit 

Reporting British Virgin Islands Financial Institutions to rely on due diligence 

procedures performed by third parties, to the extent provided in relevant U.S. Treasury 

Regulations.

G. Alternative Procedures for New Accounts Opened Prior to Entry Into 

Force of this Agreement.

1. Applicability. If the British Virgin Islands has provided a written notice 

to the United States prior to entry into force of this Agreement that, as of July 1, 

2014, the British Virgin Islands lacked the legal authority to require Reporting 

British Virgin Islands Financial Institutions either: (i) to require Account 

Holders of New Individual Accounts to provide the self-certification specified in 

section III of this Annex I, or (ii) to perform all the due diligence procedures 

related to New Entity Accounts specified in section V of this Annex I, then 

Reporting British Virgin Islands Financial Institutions may apply the alternative 

procedures described in subparagraph G(2) of this section, as applicable, to such 

New Accounts, in lieu of the procedures otherwise required under this Annex 

I. The alternative procedures described in subparagraph G(2) of this section 

shall be available only for those New Individual Accounts or New Entity 

Accounts, as applicable, opened prior to the earlier of: (i) the date the British 

Virgin Islands has the ability to compel Reporting British Virgin Islands

Financial Institutions to comply with the due diligence procedures described in 

section III or section V of this Annex I, as applicable, which date the British 

Virgin Islands shall inform the United States of in writing by the date of entry 

into force of this Agreement, or (ii) the date of entry into force of this 

Agreement. If the alternative procedures for New Entity Accounts opened on or 

after July 1, 2014, and before January 1, 2015, described in paragraph H of this 

section are applied with respect to all New Entity Accounts or a clearly 

identified group of such accounts, the alternative procedures described in this 

paragraph G may not be applied with respect to such New Entity Accounts. For 

all other New Accounts, Reporting British Virgin Islands Financial Institutions 

must apply the due diligence procedures described in section III or section V of 

this Annex I, as applicable, to determine if the account is a U.S. Reportable 

Account or an account held by a Nonparticipating Financial Institution.

2. Alternative Procedures. 
22

a) Within one year after the date of entry into force of this 

Agreement, Reporting British Virgin Islands Financial Institutions must: 

(i) with respect to a New Individual Account described in subparagraph 

G(1) of this section, request the self-certification specified in section III 

of this Annex I and confirm the reasonableness of such self-certification 

consistent with the procedures described in section III of this Annex I, 

and (ii) with respect to a New Entity Account described in subparagraph 

G(1) of this section, perform the due diligence procedures specified in 

section V of this Annex I and request information as necessary to 

document the account, including any self-certification, required by 

section V of this Annex I. 

b) The British Virgin Islands must report on any New Account that 

is identified pursuant to subparagraph G(2)(a) of this section as a U.S. 

Reportable Account or as an account held by a Nonparticipating 

Financial Institution, as applicable, by the date that is the later of: (i) 

September 30 next following the date that the account is identified as a 

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

Financial Institution, as applicable, or (ii) 90 days after the account is 

identified as a U.S. Reportable Account or as an account held by a 

Nonparticipating Financial Institution, as applicable. The information 

required to be reported with respect to such a New Account is any 

information that would have been reportable under this Agreement if the 

New Account had been identified as a U.S. Reportable Account or as an 

account held by a Nonparticipating Financial Institution, as applicable, 

as of the date the account was opened.

c) By the date that is one year after the date of entry into force of 

this Agreement, Reporting British Virgin Islands Financial Institutions 

must close any New Account described in subparagraph G(1) of this 

section for which it was unable to collect the required self-certification 

or other documentation pursuant to the procedures described in 

subparagraph G(2)(a) of this section. In addition, by the date that is one 

year after the date of entry into force of this Agreement, Reporting 

British Virgin Islands Financial Institutions must: (i) with respect to such 

closed accounts that prior to such closure were New Individual Accounts 

(without regard to whether such accounts were High Value Accounts), 

perform the due diligence procedures specified in paragraph D of section 

II of this Annex I, or (ii) with respect to such closed accounts that prior 

to such closure were New Entity Accounts, perform the due diligence 

procedures specified in section IV of this Annex I.
23

d) The British Virgin Islands must report on any closed account that 

is identified pursuant to subparagraph G(2)(c) of this section as a U.S. 

Reportable Account or as an account held by a Nonparticipating 

Financial Institution, as applicable, by the date that is the later of: (i) 

September 30 next following the date that the account is identified as a 

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

Financial Institution, as applicable, or (ii) 90 days after the account is 

identified as a U.S. Reportable Account or as an account held by a 

Nonparticipating Financial Institution, as applicable. The information 

required to be reported for such a closed account is any information that 

would have been reportable under this Agreement if the account had 

been identified as a U.S. Reportable Account or as an account held by a 

Nonparticipating Financial Institution, as applicable, as of the date the 

account was opened.

H. Alternative Procedures for New Entity Accounts Opened on or after July 1, 

2014, and before January 1, 2015. For New Entity Accounts opened on or after July 

1, 2014, and before January 1, 2015, either with respect to all New Entity Accounts or, 

separately, with respect to any clearly identified group of such accounts, the British 

Virgin Islands may permit Reporting British Virgin Islands Financial Institutions to 

treat such accounts as Preexisting Entity Accounts and apply the due diligence 

procedures related to Preexisting Entity Accounts specified in section IV of this Annex 

I in lieu of the due diligence procedures specified in section V of this Annex I. In this 

case, the due diligence procedures of section IV of this Annex I must be applied without 

regard to the account balance or value threshold specified in paragraph A of section IV 

of this Annex I.
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 are 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 the British Virgin Islands 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 British Virgin Islands 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 the British Virgin Islands, any political 

subdivision of the British Virgin Islands (which, for the avoidance of doubt, includes a 

state, province, county, or municipality), or any wholly owned agency or 

instrumentality of the British Virgin Islands or any one or more of the foregoing (each, 

a “British Virgin Islands Governmental Entity”). This category is comprised of the 

integral parts, controlled entities, and political subdivisions of the British Virgin Islands. 

1. An integral part of the British Virgin Islands means any person, organization, 

agency, bureau, fund, instrumentality, or other body, however designated, that 

constitutes a governing authority of the British Virgin Islands. The net earnings of 

the governing authority must be credited to its own account or to other accounts 

of the British Virgin Islands, 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 the British Virgin 

Islands or that otherwise constitutes a separate juridical entity, provided that:
2

a) The Entity is wholly owned and controlled by one or more British Virgin Islands

Governmental Entities directly or through one or more controlled entities; 

b) The Entity’s net earnings are credited to its own account or to the accounts of 

one or more British Virgin Islands 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 British Virgin Islands Governmental 

Entities upon dissolution. 

3. Income does not inure to the benefit of private personsif 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 the British Virgin 

Islands; 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 the British Virgin Islands itself, issuing 

instruments intended to circulate as currency. Such an institution may include an 

instrumentality that is separate from the government of the British Virgin Islands, 

whether or not owned in whole or in part by the British Virgin Islands.

II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be 

treated as Non-Reporting British Virgin Islands Financial Institutions and as exempt 

beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue 

Code.

A. Broad Participation Retirement Fund. A fund established in the British Virgin 

Islands 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:
3

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 the British Virgin Islands; and 

3. Satisfies at least one of the following requirements: 

a) The fund is generally exempt from tax in the British Virgin Islands on 

investment income under the laws of the British Virgin Islands 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 C 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 C 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.

B. Narrow Participation Retirement Fund. A fund established in the British Virgin 

Islands 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 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

4. Participants that are not residents of the British Virgin Islands 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 the British Virgin 

Islands.

C. Pension Fund of an Exempt Beneficial Owner. A fund established in the British 

Virgin Islands by an exempt beneficial owner to provide retirement, disability, or death 

benefits to beneficiaries or participants that are current or former employees of the 

exempt beneficial owner (or persons designated by such employees), or that are not 

current or former employees, if the benefits provided to such beneficiaries or 

participants are in consideration of personal services performed for the exempt 

beneficial owner.

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

a British Virgin Islands 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 British Virgin Islands

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 the British Virgin Islands; 

2. The Financial Institution must have no fixed place of business outside of the British 

Virgin Islands. 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 the 

British Virgin Islands. For this purpose, a Financial Institution shall not be 

considered to have solicited customers or Account Holders outside the British 

Virgin Islands merely because the Financial Institution (a) operates a website, 
5

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 the 

British Virgin Islands 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 the British Virgin 

Islands 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 the British Virgin Islands’ AML due diligence 

requirements; 

5. At least 98 percent of the Financial Accounts by value maintained by the Financial 

Institution must be held by residents (including residents that are Entities) of the 

British Virgin Islands; 

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 the British 

Virgin Islands (including a U.S. Person that was a resident of the British Virgin 

Islands when the Financial Account was opened but subsequently ceases to be a 

resident of the British Virgin Islands) or any Passive NFFE with Controlling 

Persons who are U.S. residents or U.S. citizens who are not residents of the British 

Virgin Islands; 

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 the British Virgin Islands or by a 

Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who 

are not residents of the British Virgin Islands is identified, the Financial Institution 

must report such Financial Account as would be required if the Financial Institution 

were a Reporting British Virgin Islands Financial Institution (including by following 

the applicable registration requirements on the IRS FATCA registration website) or 

close such Financial Account;

8. With respect to a Preexisting Account held by an individual who is not a resident 

of the British Virgin Islands 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 
6

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 British Virgin Islands Financial Institution (including by following the 

applicable registration requirements on the IRS FATCA registration website) or 

close such Financial Account;

9. Each Related Entity of the Financial Institution that is a Financial Institution must 

be incorporated or organized in the British Virgin Islands and, with the exception 

of any Related Entity that is a retirement fund described in paragraphs A through C

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 the British Virgin Islands.

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 the British Virgin Islands as) (a) a bank or (b) a credit union or similar 

cooperative credit organization that is operated without profit;

2. The Financial Institution’s business consists primarily of receiving deposits from 

and making loans to, with respect to a bank, unrelated retail customers and, with 

respect to a credit union or similar cooperative credit organization, members, 

provided that no member has a greater than five percent interest in such credit union 

or cooperative credit organization;

3. The Financial Institution satisfies the requirements set forth in subparagraphs A(2) 

and A(3) of this section, provided that, in addition to the limitations on the website 

described in subparagraph A(3) of this section, the website does not permit the 

opening of a Financial Account;

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 the British Virgin Islands, 

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 C of 

section II of this Annex II or a Financial Institution with only low-value accounts 
7

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. A British Virgin Islands

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. A British Virgin Islands Financial Institution satisfying 

the following requirements:

1. The Financial Institution is a Financial Institution solely because it is an issuer of 

credit cards that accepts deposits only when a customer makes a payment in excess 

of a balance due with respect to the card and the overpayment is not immediately 

returned to the customer; and

2. Beginning on or before July 1, 2014, the Financial Institution implements policies 

and procedures to either prevent a customer deposit in excess of $50,000, or to 

ensure that any customer deposit in excess of $50,000, in each case applying the 

rules set forth in Annex I for account aggregation and currency translation, is 

refunded to the customer within 60 days. For this purpose, a customer deposit does 

not refer to credit balances to the extent of disputed charges but does include credit 

balances resulting from merchandise returns.

IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special Rules. 

The Financial Institutions described in paragraphs A through E of this section are NonReporting British Virgin Islands Financial Institutions that shall be treated as deemedcompliant 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 the British Virgin 

Islands 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 to the British Virgin Islands all 
8

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 the British Virgin Islands 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

the British Virgin Islands that is not a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust pursuant to relevant U.S. Treasury 

Regulations; (b) the Financial Institution is wholly owned, directly or indirectly, by 

a Reporting U.S. Financial Institution that agrees to act, or requires an affiliate of 

the Financial Institution to act, as a sponsoring entity for the Financial Institution; 

and (c) the Financial Institution shares a common electronic account system with the 

sponsoring entity that enables the sponsoring entity to identify all Account Holders 

and payees of the Financial Institution and to access all account and customer 

information maintained by the Financial Institution including, but not limited to, 

customer identification information, customer documentation, account balance, and 

all payments made to the Account Holder or payee. 

3. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity is authorized to act on behalf of the Financial Institution 

(such as a fund manager, trustee, a licensed registered agent, corporate director, 

or managing partner) to fulfill applicable registration requirements on the IRS 

FATCA registration website; 

b) The sponsoring entity has registered as a sponsoring entity with the IRS on the 

IRS FATCA registration website; 

 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 “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.
9

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 the IRS FATCA registration 

website 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 British Virgin Islands 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 on the IRS FATCA registration website) 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. A British Virgin Islands 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, licensed registered agent, corporate 

director, 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 British Virgin Islands Financial Institution; 

3. The Financial Institution does not hold itself out as an investment vehicle for 

unrelated parties; 

4. Twenty or fewer individuals own all of the debt interests and Equity Interests in the 

Financial Institution (disregarding debt interests owned by Participating FFIs and 

deemed-compliant FFIs and Equity Interests owned by an Entity if that Entity owns 

100 percent of the Equity Interests in the Financial Institution and is itself a 

sponsored Financial Institution described in this paragraph C); and

5. The sponsoring entity complies with the following requirements: 
10

a) The sponsoring entity has registered as a sponsoring entity with the IRS on the 

IRS FATCA registration website; 

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 British Virgin Islands 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 the British Virgin Islands 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 the British Virgin 

Islands 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 
11

of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial 

Institutions that are not Nonparticipating Financial Institutions; or

b) An Investment Entity that is a qualified collective investment vehicle under 

relevant U.S. Treasury Regulations; 

the reporting obligations of any Investment Entity that is a British Virgin Islands

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 the British Virgin 

Islands 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 the British Virgin Islands that satisfies the following requirements.

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 the British Virgin Islands 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 the British 

Virgin Islands 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
12

e) Either (i) annual contributions are limited to $50,000 or less, or (ii) there is a 

maximum lifetime contribution limit to the account of $1,000,000 or less, in 

each case applying the rules set forth in Annex I for account aggregation and 

currency translation. 

2. Non-Retirement Savings Accounts. An account maintained in the British Virgin 

Islands (other than an insurance or Annuity Contract) that satisfies the following 

requirements.

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 the British Virgin Islands 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.

B. Certain Term Life Insurance Contracts. A life insurance contract maintained in the 

British Virgin Islands 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
13

4. The contract is not held by a transferee for value.

C. Account Held By an Estate. An account maintained in the British Virgin Islands 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 the British Virgin Islands 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, or a construction or 

engineering contract entered into between the account holder and a counterparty, 

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, the lessor or lessee to pay for any damages relating to the 

leased property as agreed under the lease, or to secure payment by the account 

holder to the counterparty of costs incurred under the contract or amounts paid 

in settlement of disputes under the contract;

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, lessee or 

counterparty (including to satisfy such person’s obligation) when the property is 

sold, exchanged, or surrendered, the lease terminates, or the specified terms in 

the contract have been satisfied, and in the case of a construction or engineering 

contract, deposits to the account cannot be withdrawn except upon satisfaction 

of the specified terms in the contract;

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. 
14

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 the British Virgin Islands

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 shall apply to the descriptions above:

A. Reporting Model 1 FFI. The term Reporting Model 1 FFI means a Financial 

Institution with respect to which a non-U.S. government or agency thereof agrees to 

obtain and exchange information pursuant to a Model 1 IGA, other than a Financial 

Institution treated as a Nonparticipating Financial Institution under the Model 1 IGA. 

For purposes of this 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.