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Agreement between the Government of the United States of America and the 

Government of the Kingdom of Saudi Arabia to Improve International Tax Compliance 

and to Implement FATCA

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

Kingdom of Saudi Arabia (each, a “Party,” and together, the “Parties”) desire to conclude an 

agreement to improve international tax compliance;

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 Kingdom of Saudi Arabia is supportive of the underlying 

policy goal of FATCA to improve tax compliance;

Whereas, FATCA has raised a number of issues, including that the Kingdom of Saudi

Arabia’s 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, an intergovernmental approach to FATCA implementation would address legal 

impediments and reduce burdens for the Kingdom of Saudi Arabia’s financial institutions;

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

and provide for the implementation of FATCA based on domestic reporting and 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, and, when used in a geographical sense, means the territory of 

the United States of America, including inland waters, the air space, the 

territorial sea thereof and any maritime area beyond the territorial sea within 

which the United States may exercise sovereign rights or jurisdiction in 

accordance with international law; the term, however, does not include the 

U.S. Territories. Any reference to a “State” of the United States includes the 

District of Columbia.
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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 “the Kingdom of Saudi Arabia” means the Kingdom of Saudi 

Arabia, and, when used in a geographical sense, means the territory of the 

Kingdom of Saudi Arabia, including inland waters, the air space, the territorial 

sea thereof and any maritime area beyond the territorial sea within which the 

Kingdom of Saudi Arabia may exercise its sovereign rights or jurisdiction in 

accordance with international law.

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

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

The IRS shall publish a list identifying all Partner Jurisdictions.

f) The term “Competent Authority” means:

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

delegate; and

(2) in the case of the Kingdom of Saudi Arabia, the Minister of Finance 

or his authorized representative.

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;
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(2) individual and collective portfolio management; or

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

behalf of other persons.

This subparagraph 1(j) shall be interpreted in a manner consistent with similar 

language set forth in the definition of “financial institution” in the Financial 

Action Task Force Recommendations.

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

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

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

Insurance Contract or an Annuity Contract.

l) The term “Kingdom of Saudi Arabia Financial Institution” means (i) any 

Financial Institution organized under the laws of the Kingdom of Saudi

Arabia, but excluding any branch of such Financial Institution that is located 

outside the Kingdom of Saudi Arabia, and (ii) any branch of a Financial 

Institution not organized under the laws of the Kingdom of Saudi Arabia, if 

such branch is located in the Kingdom of Saudi Arabia.

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 Kingdom of Saudi Arabia Financial Institution”

means any Kingdom of Saudi Arabia Financial Institution that is not a NonReporting Kingdom of Saudi Arabia Financial Institution.

o) The term “Non-Reporting Kingdom of Saudi Arabia Financial 

Institution” means any Kingdom of Saudi Arabia Financial Institution, or 

other Entity resident in the Kingdom of Saudi Arabia, that is described in 

Annex II as a Non-Reporting Kingdom of Saudi Arabia Financial Institution 

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

owner under relevant U.S. Treasury Regulations in effect on the date of 

signature of this Agreement.

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 Kingdom of Saudi Arabia Financial Institution or other Partner 

Jurisdiction Financial Institution other than a Financial Institution treated as a 

Nonparticipating Financial Institution pursuant to subparagraph 3(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:
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(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 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 noninvestmentlinked, 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 
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of indebtedness, a currency or commodity transaction, a credit default swap, a 

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

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

instrument).

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 

effective period of the Insurance Contract, or arising from a 

redetermination of the premium due to correction of posting or other 

similar error; or
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(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 Kingdom of Saudi Arabia 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.

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 
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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(g) 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 or value in an Entity. Notwithstanding the foregoing, the Kingdom of

Saudi Arabia 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.
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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 Kingdom of Saudi

Arabia 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 Kingdom of Saudi Arabia 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);

c) the name and identifying number of the Reporting Kingdom of Saudi Arabia

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 Kingdom of 

Saudi Arabia Financial Institution acted as a custodian, broker, 

nominee, or otherwise as an agent for the Account Holder; 
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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 Kingdom of Saudi Arabia

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 tax laws of the Kingdom of Saudi

Arabia.

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 Kingdom of Saudi Arabia Financial Institution as of 

June 30, 2014, and subject to paragraph 3 of Article 6 of this Agreement, the Kingdom of

Saudi Arabia 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 Kingdom of

Saudi Arabia Financial Institution. In such a case, the Kingdom of Saudi Arabia shall obtain 

and include in the exchanged information the date of birth of the relevant person, if the 

Reporting Kingdom of Saudi Arabia Financial Institution has such date of birth in its records.
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5. Subject to paragraphs 3 and 4 of this Article, the information described in Article 2 of 

this Agreement shall be exchanged by the later of nine months after the end of the calendar 

year to which the information relates or the next September 30th after the Agreement enters 

into force. 

6. The Competent Authorities of the Kingdom of Saudi Arabia 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

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 Kingdom of Saudi Arabia Financial Institutions

1. Treatment of Reporting Kingdom of Saudi Arabia Financial Institutions. Each 

Reporting Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia complies with its obligations under Articles 2 and 3 of this 

Agreement with respect to such Reporting Kingdom of Saudi Arabia Financial Institution, 

and the Reporting Kingdom of Saudi Arabia Financial Institution:

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

Saudi Arabia 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 Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia 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, 
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(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 Kingdom of Saudi Arabia Financial Institution that 

is not described in subparagraph 1(d) of this Article and that makes a payment 

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

Payment to any Nonparticipating Financial Institution, the Reporting Kingdom

of Saudi Arabia 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 Kingdom of Saudi Arabia 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 

Kingdom of Saudi Arabia Financial Institution is treated by the IRS as a Nonparticipating 

Financial Institution pursuant to subparagraph 3(b) of Article 5 of this Agreement.

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

not require a Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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, Kingdom of Saudi

Arabia retirement plans described in Annex II. For this purpose, a Kingdom of Saudi Arabia

retirement plan includes an Entity established or located in, and regulated by, the Kingdom

of Saudi Arabia, 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi 

Arabia 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 Kingdom of Saudi Arabia Financial 

Institution, that otherwise meets the requirements described in paragraph 1 of this Article or 

is described in paragraph 3 or 4 of this Article, has a Related Entity or branch that operates in 

a jurisdiction that prevents such Related Entity or branch from fulfilling the requirements of a 

participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. Internal 
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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 Kingdom of Saudi Arabia

Financial Institution shall continue to be in compliance with the terms of this Agreement and 

shall continue to be treated as a deemed-compliant FFI or exempt beneficial owner, as 

appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code, provided that:

a) the Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia may use, and may permit 

Kingdom of Saudi Arabia 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.
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ARTICLE 5

Collaboration on Compliance and Enforcement

1. General Inquiries. 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 follow-up requests to the Kingdom of Saudi Arabia

Competent Authority, pursuant to which the Kingdom of Saudi Arabia Competent Authority 

shall obtain and provide additional information with respect to a U.S. Reportable Account, 

including the account statements prepared in the ordinary course of a Reporting Kingdom of 

Saudi Arabia Financial Institution’s business that summarize the activity (including 

withdrawals, transfers, and closures) of the U.S. Reportable Account.

2. Minor and Administrative Errors. The U.S. Competent Authority shall notify the 

Kingdom of Saudi Arabia Competent Authority when the U.S. Competent Authority has 

reason to believe that administrative errors or other minor errors may have led to incorrect or 

incomplete information reporting or resulted in other infringements of this Agreement. The 

Kingdom of Saudi Arabia Competent Authority shall apply its domestic law (including 

applicable penalties) to obtain corrected and/or complete information or to resolve other 

infringements of this Agreement.

3. Significant Non-Compliance. 

a) The U.S. Competent Authority shall notify the Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia Financial Institution.

The Kingdom of Saudi Arabia 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 

Kingdom of Saudi Arabia Financial Institution as a Nonparticipating 

Financial Institution pursuant to this subparagraph 3(b). 

4. Reliance on Third Party Service Providers. The Kingdom of Saudi Arabia may 

allow Reporting Kingdom of Saudi Arabia Financial Institutions to use third party service 

providers to fulfill the obligations imposed on such Reporting Kingdom of Saudi Arabia

Financial Institutions by the Kingdom of Saudi Arabia, as contemplated in this Agreement, 

but these obligations shall remain the responsibility of the Reporting Kingdom of Saudi 

Arabia Financial Institutions.

5. Prevention of Avoidance. The Kingdom of Saudi Arabia shall implement as 

necessary requirements to prevent Financial Institutions from adopting practices intended to 

circumvent the reporting required under this Agreement.
14

ARTICLE 6

Mutual Commitment to Continue to Enhance the Effectiveness of Information

Exchange and Transparency

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

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

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

proceeds withholding that minimizes burden. 

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

committed to working with Partner Jurisdictions and the Organisation for Economic Cooperation and Development on adapting the terms of this Agreement and other

agreements between the United States and Partner Jurisdictions to a common model for 

automatic exchange of information, including the development of reporting and due 

diligence standards for financial institutions.

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

Reportable Accounts maintained by a Reporting Kingdom of Saudi Arabia Financial 

Institution as of June 30, 2014, the Kingdom of Saudi Arabia commits to establish, by 

January 1, 2017, for reporting with respect to 2017 and subsequent years, rules requiring 

Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 

signing of the agreement incorporating the more favorable terms, unless the Kingdom of

Saudi Arabia 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.
15

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

1. The Kingdom of Saudi Arabia 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 

related to the performance of the obligations of the Kingdom of Saudi Arabia 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 Kingdom of Saudi

Arabia 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.
16

ARTICLE 12

Term of Agreement

1. This Agreement shall enter into force on the date of the Kingdom of Saudi Arabia’s 

written notification to the United States that the Kingdom of Saudi Arabia has completed its 

necessary internal procedures for entry into force of this Agreement.

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

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

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

3. The Parties shall, prior to December 31, 2018, 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.

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

Governments, have signed this Agreement.

Done at ________, in duplicate, in the English and Arabic languages, both texts being 

equally authentic, this __ day of ________, 20__.

FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF 

THE KINGDOM OF SAUDI ARABIA:
Annex I – 1

ANNEX I

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

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN 

NONPARTICIPATING FINANCIAL INSTITUTIONS

I. General.

A. The Kingdom of Saudi Arabia shall require that Reporting Kingdom of Saudi 

Arabia Financial Institutions apply the due diligence procedures contained in this 

Annex I to identify U.S. Reportable Accounts and accounts held by Nonparticipating 

Financial Institutions.

B. For purposes of the Agreement,

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

equivalent in other currencies.

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

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

appropriate reporting period.

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

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

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

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

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

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

appropriate reporting period. 

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

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

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

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

Reportable Account shall be reported annually in the calendar year following

the year to which the information relates.

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

the Kingdom of Saudi Arabia may permit Reporting Kingdom of Saudi Arabia

Financial Institutions to rely on the procedures described in relevant U.S.

Treasury Regulations to establish whether an account is a U.S. Reportable

Account or an account held by a Nonparticipating Financial Institution. The

Kingdom of Saudi Arabia may permit Reporting Kingdom of Saudi Arabia

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).
Annex I – 2

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia

requires reporting or withholding with respect to insurance products held by

residents of the Kingdom of Saudi Arabia).

4. A DepositoryAccount 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 Kingdom of Saudi 

Arabia Financial Institution must review electronically searchable data

maintained by the Reporting Kingdom of Saudi Arabia Financial Institution

for any of the following U.S. indicia:

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

resident;

b) Unambiguousindication 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;
Annex I – 3

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution is

not required to treat an account as a U.S. Reportable Account if:

a) Where the Account Holder information unambiguously

indicates a U.S. place of birth, the Reporting Kingdom of Saudi

Arabia 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;
Annex I – 4

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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.

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 Kingdom of Saudi Arabia 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
Annex I – 5

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 Kingdom of Saudi Arabia Financial

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

subparagraph B(4) of this section applies.

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

this section, any Preexisting Individual Account that has been identified as a

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

Reportable Account in all subsequent years, unless the Account Holder 

ceases to be a Specified U.S. Person.

D. Enhanced Review Procedures for Preexisting Individual Accounts

With a Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or

December 31 of 2015 or Any Subsequent Year (“High Value Accounts”).

1. Electronic Record Search. The Reporting Kingdom of Saudi 

Arabia Financial Institution must review electronically searchable data

maintained by the Reporting Kingdom of Saudi Arabia Financial Institution

for any of the U.S. indicia described in subparagraph B(1) of this section.

2. Paper Record Search. If the Reporting Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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
Annex I – 6

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution is not required to 

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

section if the Reporting Kingdom of Saudi Arabia Financial Institution’s 

electronically searchable information includes the following:

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

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

currently on file with the Reporting Kingdom of Saudi Arabia

Financial Institution;

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

if any, with the Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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
Annex I – 7

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 Kingdom of Saudi

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

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

this section and one of the exceptions in such subparagraph applies

with respect to that account.

c) Except for Depository Accounts described in subparagraph

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

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

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

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

E. Additional Procedures Applicable to High Value Accounts.

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

June 30, 2014, the Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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 Kingdom of Saudi

Arabia 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 Kingdom of Saudi

Arabia 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 Kingdom of Saudi Arabia Financial Institution
Annex I – 8

applies the enhanced review procedures described in paragraph D of this

section to a High Value Account, the Reporting Kingdom of Saudi Arabia

Financial Institution is not required to re-apply such procedures, other than

the relationship manager inquiry described in subparagraph D(4) of this

section, to the same High Value Account in any subsequent year.

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

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

B(1) of this section being associated with the account, then the Reporting

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 

Kingdom of Saudi Arabia 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
Annex I – 9

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

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

Accounts not described in paragraph A of this section, upon account opening (or

within 90 days after the end of the calendar year in which the account ceases

to be described in paragraph A of this section), the Reporting Kingdom of Saudi

Arabia Financial Institution must obtain a self-certification, which may be part of

the account opening documentation, that allows the Reporting Kingdom of Saudi

Arabia 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 Kingdom of

Saudi Arabia 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 Kingdom of Saudi

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

Account and obtain a self-certification that includes the Account Holder’s

U.S. TIN (which may be an IRS Form W-9 or other similar agreed form).

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

Individual Account that causes the Reporting Kingdom of Saudi Arabia

Financial Institution to know, or have reason to know, that the original selfcertification is incorrect or unreliable, the Reporting Kingdom of Saudi

Arabia 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 

Kingdom of Saudi Arabia Financial Institution is unable to obtain a valid

self-certification, the Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia provide for such an election, a Preexisting

Entity Account with an account balance or value that does not exceed $250,000 as of

June 30, 2014, is not required to be reviewed, identified, or reported as a U.S.

Reportable Account until the account balance or value exceeds $1,000,000.

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

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

Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014
Annex I – 10

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial

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

unless it obtains a self-certification from the Account Holder (which

may be on an IRS Form W-8 or W-9, or a similar agreed form), or

reasonably determines based on information in its possession or

that is publicly available, that the Account Holder is not a Specified

U.S. Person.

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

Institution.

a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a Financial Institution.

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

Financial Institution, or the Reporting Kingdom of Saudi Arabia
Annex I – 11

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 

Kingdom of Saudi Arabia Financial Institution may determine that

the Account Holder is a Kingdom of Saudi Arabia Financial

Institution or other Partner Jurisdiction Financial Institution if the

Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia

Financial Institution or other Partner Jurisdiction Financial Institution, 

then the Reporting Kingdom of Saudi Arabia 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 Kingdom of

Saudi Arabia Financial Institution:

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

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

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

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

Treasury Regulations; or

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

Intermediary Identification Number on the published IRS FFI

list.

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

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

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

Institution, the Reporting Kingdom of Saudi Arabia Financial Institution
Annex I – 12

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 Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution may rely on:

(1) Information collected and maintained pursuant to

AML/KYC Procedures in the case of a Preexisting Entity

Account held by one or more NFFEs with an account

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

(2) A self-certification (which may be on an IRS Form W8 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
Annex I – 13

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi

Arabia Financial Institution maintaining such account implements policies and 

procedures to prevent an account balance owed to the Account Holder that exceeds

$50,000.

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

described in paragraph A of this section, the Reporting Kingdom of Saudi Arabia

Financial Institution must determine whether the Account Holder is: (i) a Specified

U.S. Person; (ii) a Kingdom of Saudi Arabia 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 Kingdom of

Saudi Arabia Financial Institution may determine that the Account Holder is

an Active NFFE, a Kingdom of Saudi Arabia Financial Institution, or other 

Partner Jurisdiction Financial Institution if the Reporting Kingdom of

Saudi Arabia 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 Kingdom of Saudi Arabia

Financial Institution, as applicable.

2. If the Account Holder is a Kingdom of Saudi Arabia 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.
Annex I – 14

3. In all other cases, a Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution must treat

the account as a U.S. Reportable Account.

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

Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution or other

Partner Jurisdiction Financial Institution; (iii) a participating FFI, a

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

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

Active NFFE; or (v) a Passive NFFE none of the Controlling

Persons of which is a U.S. citizen or resident, then the account is

not a U.S. Reportable Account, and no reporting is required with

respect to the account.

d) If the Account Holder is a Nonparticipating Financial

Institution (including a Kingdom of Saudi Arabia 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 

Kingdom of Saudi Arabia Financial Institution may not rely on a self-certification or 

documentary evidence if the Reporting Kingdom of Saudi Arabia 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
Annex I – 15

due diligence procedures of a Reporting Kingdom of Saudi Arabia

Financial Institution pursuant to the anti-money laundering or similar

requirements of the Kingdom of Saudi Arabia to which such Reporting

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia or another

Partner Jurisdiction and that is not a Financial Institution.

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

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

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

4. Active NFFE. An “Active NFFE” means any NFFE that meets any of

the following criteria:

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

preceding calendar year or other appropriate reporting period is

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

NFFE during the preceding calendar year or other appropriate 

reporting period are assets that produce or are held for the

production of passive income;

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

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

the stock of which is 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 
Annex I – 16

companies as capital assets for investment purposes;

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

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

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

provided that the NFFE shall not qualify for this exception after

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

of the NFFE;

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

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

with the intent to continue or recommence operations in a

business other than that of a Financial Institution;

h) The NFFE primarily engages in financing and hedging

transactions with, or for, Related Entities that are not Financial

Institutions, and does not provide financing or hedging services to

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

any such Related Entities 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 noncharitable 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
Annex I – 17

v. The applicable laws of the NFFE’s jurisdiction of

residence or the NFFE’s formation documents require that,

upon the NFFE’s liquidation or dissolution, all of its assets

be distributed to a governmental entity or other non-profit

organization, or escheat to the government of the

NFFE’s jurisdiction of residence or any political

subdivision thereof.

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

Account maintained by a Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution is

required to aggregate all Financial Accounts maintained by the Reporting

Kingdom of Saudi Arabia Financial Institution, or by a Related Entity,

but only to the extent that the Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution is required to take

into account all Financial Accounts that are maintained by the Reporting

Kingdom of Saudi Arabia Financial Institution, or by a Related Entity, but

only to the extent that the Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution

must convert the U.S. dollar threshold amounts described in this Annex I into
Annex I – 18

such currency using a published spot rate determined as of the last day

of the calendar year preceding the year in which the Reporting Kingdom

of Saudi Arabia Financial Institution is determining the balance or value.

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

documentary evidence includes any of the following:

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

(for example, a government or agency thereof, or a municipality) of the

jurisdiction in which the payee claims to be a resident.

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

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

or a municipality), that includes the individual’s name and is typically

used for identification purposes.

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

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

or a municipality) that includes the name of the Entity and either the address

of its principal office in the jurisdiction (or U.S. Territory) in which it claims

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

incorporated or organized.

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

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

connection with a QI agreement (as described in relevant U.S. Treasury

Regulations), any of the documents, other than a Form W-8 or W-9,

referenced in the jurisdiction’s attachment to the QI agreement for identifying

individuals or Entities.

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

or U.S. Securities and Exchange Commission report.

E. Alternative Procedures for Financial Accounts Held by Individual 

Beneficiaries of a Cash Value Insurance Contract. A Reporting Kingdom of

Saudi Arabia 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 Kingdom of Saudi Arabia Financial 

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

Specified U.S. Person. A Reporting Kingdom of Saudi Arabia 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 Kingdom of

Saudi Arabia 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 Kingdom of Saudi Arabia Financial Institution has actual knowledge, or

reason to know, that the beneficiary is a Specified U.S. Person, the Reporting

Kingdom of Saudi Arabia Financial Institution must follow the procedures in

subparagraph B(3) of section II of this Annex I.
Annex I – 19

F. Reliance on Third Parties. Regardless of whether an election is made

under paragraph C of section I of this Annex I, the Kingdom of Saudi Arabia may

permit Reporting Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia has provided a

written notice to the United States prior to entry into force of this Agreement

that, as of July 1, 2014, the Kingdom of Saudi Arabia lacked the legal

authority to require Reporting Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia has the ability to compel Reporting Kingdom of

Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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.

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

Agreement, Reporting Kingdom of Saudi Arabia Financial

Institutions must: (i) with respect to a New Individual Account

described in subparagraph G(1) of this section, request the selfcertification 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
Annex I – 20

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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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.

d) The Kingdom of Saudi Arabia 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 
Annex I – 21

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 Kingdom of Saudi Arabia may permit Reporting Kingdom of Saudi Arabia

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 – 1

ANNEX II

The following Entities shall be treated as exempt beneficial owners or deemedcompliant 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia, any 

political subdivision of the Kingdom of Saudi Arabia (which, for the avoidance

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

owned agency or instrumentality of the Kingdom of Saudi Arabia or any one or

more of the foregoing (each, a “Kingdom of Saudi Arabia Governmental Entity”). 

This category is comprised of the integral parts, controlled entities, and political

subdivisions of the Kingdom of Saudi Arabia.

1. An integral part of the Kingdom of Saudi Arabia means any person,

organization, agency, bureau, fund, instrumentality, or other body, however

designated, that constitutes a governing authority of the Kingdom of Saudi

Arabia. The net earnings of the governing authority must be credited to its

own account or to other accounts of the Kingdom of Saudi Arabia, 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

Kingdom of Saudi Arabia or that otherwise constitutes a separate juridical

entity, provided that:

a) The Entity is wholly owned and controlled by one or more Kingdom

of Saudi Arabia Governmental Entities directly or through one or more

controlled entities;
Annex II – 2

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

of one or more Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia

Governmental Entities upon dissolution.

3. Income does not inure to the benefit of private persons if such persons are the 

intended beneficiaries of a governmental program, and the program activities

are performed for the general public with respect to the common welfare or 

relate to the administration of some phase of government. Notwithstanding the

foregoing, however, income is considered to inure to the benefit of private

persons if the income is derived from the use of a governmental entity to

conduct a commercial business, such as a commercial banking business, that

provides financial services to private persons.

B. International Organization. Any international organization or wholly owned

agency or instrumentality thereof. This category includes any intergovernmental

organization (including a supranational organization) (1) that is comprised

primarily of non-U.S. governments; (2) that has in effect a headquarters agreement

with the Kingdom of Saudi Arabia; 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 Kingdom of Saudi Arabia itself,

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

include an instrumentality that is separate from the government of the Kingdom

of Saudi Arabia, whether or not owned in whole or in part by the Kingdom of

Saudi Arabia.

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

treated as Non-Reporting Kingdom of Saudi Arabia 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 Kingdom of

Saudi Arabia to provide retirement, disability, or death benefits, or any 

combination thereof, to beneficiaries that are current or former employees (or

persons designated by such employees) of one or more employers in

consideration for services rendered, provided that the fund:

1. Does not have a single beneficiary with a right to more than five percent of the

fund’s assets;

2. Is subject to government regulation and provides annual information

reporting about its beneficiaries to the relevant tax authorities in the Kingdom

of Saudi Arabia; and
Annex II – 3

3. Satisfies at least one of the following requirements:

a) The fund is generally exempt from tax in the Kingdom of Saudi Arabia on 

investment income under the laws of the Kingdom of Saudi Arabia 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 Kingdom of

Saudi Arabia 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. Participants that are not residents of the Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia.

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

Kingdom of Saudi Arabia by an exempt beneficial owner to provide retirement,
Annex II – 4

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 Kingdom of Saudi Arabia 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 DeemedCompliant FFIs. The following Financial Institutions are Non-Reporting Kingdom of

Saudi Arabia 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 Kingdom of Saudi Arabia;

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

Kingdom of Saudi Arabia. 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 Kingdom of Saudi Arabia. For this purpose, a Financial Institution

shall not be considered to have solicited customers or Account Holders

outside the Kingdom of Saudi Arabia merely because the Financial Institution 

(a) operates a website, provided that the website does not specifically

indicate that the Financial Institution provides Financial Accounts or services 

to nonresidents, and does not otherwise target or solicit U.S. customers or 

Account Holders, or (b) advertises in print media or on a radio or television 

station that is distributed or aired primarily within the Kingdom of Saudi 

Arabia 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 Kingdom of

Saudi Arabia 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 Kingdom of

Saudi Arabia’s AML due diligence requirements;
Annex II – 5

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

Financial Institution must be held by residents (including residents that are

Entities) of the Kingdom of Saudi Arabia;

6. By the later of July 1, 2014, or the date that the Financial Institution claims 

treatment as a deemed-compliant FFI pursuant to this paragraph A, 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 Kingdom of Saudi 

Arabia (including a U.S. Person that was a resident of the Kingdom of Saudi

Arabia when the Financial Account was opened but subsequently ceases to be

a resident of the Kingdom of Saudi Arabia) or any Passive NFFE with 

Controlling Persons who are U.S. residents or U.S. citizens who are not

residents of the Kingdom of Saudi Arabia;

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 Kingdom of Saudi

Arabia or by a Passive NFFE with Controlling Persons who are U.S.

residents or U.S. citizens who are not residents of the Kingdom of Saudi 

Arabia is identified, the Financial Institution must report such Financial

Account as would be required if the Financial Institution were a Reporting 

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia or by an Entity, the Financial

Institution must review those Preexisting Accounts in accordance with the 

procedures set forth in Annex I applicable to Preexisting Accounts to identify 

any U.S. Reportable Account or Financial Account held by a

Nonparticipating Financial Institution, and must report such Financial

Account as would be required if the Financial Institution were a Reporting 

Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia.

B. Local Bank. A Financial Institution satisfying the following requirements:
Annex II – 6

1. The Financial Institution operates solely as (and is licensed and regulated

under the laws of the Kingdom of Saudi Arabia 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 Kingdom of

Saudi Arabia, 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 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 Kingdom of Saudi

Arabia 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 Kingdom of Saudi Arabia 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
Annex II – 7

2. By the later of July 1, 2014, or the date that the Financial Institution claims 

treatment as a deemed-compliant FFI pursuant to this paragraph D, the

Financial Institution implements policies and procedures to either prevent a

customer deposit in excess of $50,000, or to ensure that any customer deposit

in excess of $50,000, in each case applying the rules set forth in Annex I for 

account aggregation and currency translation, is refunded to the customer

within 60 days. For this purpose, a customer deposit does not refer to credit 

balances to the extent of disputed charges but does include credit balances

resulting from merchandise returns.

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

Special Rules. The Financial Institutions described in paragraphs A through E of

this section are Non-Reporting Kingdom of Saudi Arabia Financial Institutions that

shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S.

Internal Revenue Code. In addition, paragraph F of this section provides special rules

applicable to an Investment Entity.

A. Trustee-Documented Trust. A trust established under the laws of the

Kingdom of Saudi Arabia to the extent that the trustee of the trust is a Reporting

U.S. Financial Institution, Reporting Model 1 FFI, or Participating FFI and reports 

all information required to be reported pursuant to the Agreement with respect to

all U.S. Reportable Accounts of the trust.

B. Sponsored Investment Entity and Controlled Foreign Corporation. A

Financial Institution described in subparagraph B(1) or B(2) of this section

having a sponsoring entity that complies with the requirements of subparagraph

B(3) of this section.

1. A Financial Institution is a sponsored investment entity if (a) it is an

Investment Entity established in the Kingdom of Saudi Arabia that is not a

qualified intermediary, withholding foreign partnership, or withholding

foreign trust pursuant to relevant U.S. Treasury Regulations; and (b) an Entity 

has agreed with the Financial Institution to act as a sponsoring entity for the

Financial Institution.

2. A Financial Institution is a sponsored controlled foreign corporation if (a) the 

Financial Institution is a Controlled Foreign Corporation organized under the

laws of the Kingdom of Saudi Arabia 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
Annex II – 8

identification information, customer documentation, account balance, and 

all payments made to the Account Holder or payee.

3. The sponsoring entity complies with the following requirements:

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

Institution (such as a fund manager, trustee, corporate director, or

managing partner) to fulfill applicable registration requirements 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;

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, 

2016 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia

Financial Institution satisfying the following requirements:

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

Investment Entity and is not a qualified intermediary, withholding foreign

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

Regulations;

2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting

Model 1 FFI, or Participating FFI, is authorized to act on behalf of the

Financial Institution (such as a professional manager, trustee, or managing

partner), and agrees to perform, on behalf of the Financial Institution, all due

diligence, withholding, reporting, and other requirements that the Financial

Institution would have been required to perform if it were a Reporting

Kingdom of Saudi Arabia Financial Institution;
Annex II – 9

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

unrelated parties;

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

Interests in the Financial Institution (disregarding debt interests owned by 

Participating FFIs and deemed-compliant FFIs and Equity Interests owned by

an Entity if that Entity owns 100 percent of the Equity Interests in the

Financial Institution and is itself a sponsored Financial Institution described in

this paragraph C); and

5. The sponsoring entity complies with the following requirements:

a) The sponsoring entity has registered as a sponsoring entity 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 Kingdom of Saudi Arabia 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 Kingdom of Saudi Arabia 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

Kingdom of Saudi Arabia 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
Annex II – 10

interests in the collective investment vehicle are held) shall be deemed

fulfilled.

2. With respect to interests in:

a) An Investment Entity established in a Partner Jurisdiction that is regulated

as a collective investment vehicle, all of the interests in which (including

debt interests in excess of $50,000) are held by or through one or more

exempt beneficial owners, Active NFFEs described in subparagraph B(4)

of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons,

or Financial Institutions that are not Nonparticipating Financial

Institutions; or

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

relevant U.S. Treasury Regulations;

the reporting obligations of any Investment Entity that is a Kingdom of

Saudi Arabia 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

Kingdom of Saudi Arabia that is not described in paragraph E or

subparagraph F(2) of this section, consistent with paragraph 4 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 Kingdom of Saudi Arabia that satisfies the following requirements under

the laws of the Kingdom of Saudi Arabia.

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 Kingdom of Saudi Arabia

are deductible or excluded from the gross income of the account holder
Annex II – 11

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

Kingdom of Saudi Arabia with respect to the account;

d) Withdrawals are conditioned on reaching a specified retirement age,

disability, or death, or penalties apply to withdrawals made before such

specified events; and

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

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

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

and currency translation.

2. Non-Retirement Savings Accounts. An account maintained in the Kingdom of 

Saudi Arabia (other than an insurance or Annuity Contract) that satisfies the 

following requirements under the laws of the Kingdom of Saudi Arabia.

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 Kingdom of Saudi Arabia

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 Kingdom of Saudi Arabia 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;
Annex II – 12

3. The amount (other than a death benefit) payable upon cancellation or

termination of the contract cannot exceed the aggregate premiums paid for the

contract, less the sum of mortality, morbidity, and expense charges (whether

or not actually imposed) for the period or periods of the contract’s existence

and any amounts paid prior to the cancellation or termination of the contract;

and

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

C. Account Held By an Estate. An account maintained in the Kingdom of Saudi

Arabia 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 Kingdom of Saudi Arabia

established in connection with any of the following:

1. A court order or judgment.

2. A sale, exchange, or lease of real or personal property, provided that the

account satisfies the following requirements:

a) The account is funded solely with a down payment, earnest money,

deposit in an amount appropriate to secure an obligation directly related to

the transaction, or a similar payment, or is funded with a financial asset that 

is deposited in the account in connection with the sale, exchange, or lease

of the property;

b) The account is established and used solely to secure the obligation of the 

purchaser to pay the purchase price for the property, the seller to pay any 

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

to the leased property as agreed under the lease;

c) The assets of the account, including the income earned thereon, will be paid

or otherwise distributed for the benefit of the purchaser, seller, lessor, or

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

sold, exchanged, or surrendered, or the lease terminates;

d) The account is not a margin or similar account established in connection

with a sale or exchange of a financial asset; and

e) The account is not associated with a credit card account.

3. An obligation of a Financial Institution servicing a loan secured by real

property to set aside a portion of a payment solely to facilitate the payment of

taxes or insurance related to the real property at a later time.

4. An obligation of a Financial Institution solely to facilitate the payment of

taxes at a later time.
Annex II – 13

E. Partner Jurisdiction Accounts. An account maintained in the Kingdom of

Saudi Arabia 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.

C. Controlled Foreign Corporation. The term Controlled Foreign Corporation means 

any foreign corporation if more than 50 percent of the total combined voting power 

of all classes of stock of such corporation entitled to vote, or the total value of the 

stock of such corporation, is owned, or is considered as owned, by “United States 

shareholders” on any day during the taxable year of such foreign corporation. The 

term a “United States shareholder” means, with respect to any foreign corporation, a 

United States person who owns, or is considered as owning, 10 percent or more of 

the total combined voting power of all classes of stock entitled to vote of such 

foreign corporation.