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

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

Implement FATCA

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

Republic of Croatia (each, a “Party”, and together, the “Parties”) desire to conclude an 

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

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

Whereas, the Convention on Mutual Administrative Assistance in Tax Matters, done at 

Strasbourg on January 25, 1988 (the “Convention”), authorizes the exchange of information 

for tax purposes, including on an automatic basis (hereinafter the “Convention” refers to the 

Convention and any amendments thereto that are in force for both Parties);

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

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

institutions with respect to certain accounts;

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

goal of FATCA to improve tax compliance;

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

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

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

certain accounts maintained by U.S. financial institutions held by residents of Croatia and is 

committed to exchanging such information with the Government of the Republic of Croatia

and pursuing equivalent levels of exchange, provided that the appropriate safeguards and 

infrastructure for an effective exchange relationship are in place;

Whereas, an intergovernmental approach to FATCA implementation would address legal 

impediments and reduce burdens for Croatian financial institutions;

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

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

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

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

exchanged under the Convention;

Now, therefore, the Parties have agreed as follows:

Article 1

Definitions

1. For purposes of this Agreement and any Annexes thereto (“Agreement”), the 

following terms shall have the meanings set forth below:

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

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

“State” 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 “Croatia” means the Republic of Croatia.

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 United States, the Secretary of the Treasury or his 

delegate; and

(2) in the case of the Croatia, 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;

(2) individual and collective portfolio management; or

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

behalf of other persons.
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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 “Croatian Financial Institution” means (i) any Financial Institution 

resident in Croatia, but excluding any branch of such Financial Institution that 

is located outside Croatia, and (ii) any branch of a Financial Institution not 

resident in Croatia, if such branch is located in Croatia.

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

Financial Institution established in a Partner Jurisdiction, but excluding any 

branch of such Financial Institution that is located outside the Partner 

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

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

n) The term “Reporting Financial Institution” means a Reporting Croatian

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

requires.

o) The term “Reporting Croatian Financial Institution” means any Croatian

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

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

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

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

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

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

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

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

of this Agreement.

q) The term “Non-Reporting Croatian Financial Institution” means any 

Croatian Financial Institution, or other Entity resident in Croatia, that is 

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

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

under relevant U.S. Treasury Regulations.

r) The term “Nonparticipating Financial Institution” means a nonparticipating 

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

include a Croatian Financial Institution or other Partner Jurisdiction Financial 

Institution other than a Financial Institution treated as a Nonparticipating 

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

Agreement or the corresponding provision in an agreement between the United 

States and a Partner Jurisdiction.
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s) The term “Financial Account” means an account maintained by a Financial 

Institution, and includes:

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

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

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

Financial Institution;

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

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

Institution (other than interests that are regularly traded on an 

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

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

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

class of interests was established with a purpose of avoiding reporting 

in accordance with this Agreement; and

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

maintained by a Financial Institution, other than a 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(s), an interest in a Financial 

Institution is not “regularly traded” and shall be treated as a Financial Account

if the holder of the interest (other than a Financial Institution acting as an 

intermediary) is registered on the books of such Financial Institution. The 

preceding sentence will not apply to interests first registered on the books of 

such Financial Institution prior to July 1, 2014, and with respect to interests 

first registered on the books of such Financial Institution on or after July 1, 

2014, a Financial Institution is not required to apply the preceding sentence 

prior to January 1, 2016.

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

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

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

other similar instrument maintained by a Financial Institution in the ordinary 

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

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

contract or similar agreement to pay or credit interest thereon.
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u) The term “Custodial Account” means an account (other than an Insurance 

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

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

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

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

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

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

instrument).

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

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

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

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

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

the trust. A Specified U.S. Person shall be treated as being a beneficiary of a 

foreign trust if such Specified U.S. Person has the right to receive directly or 

indirectly (for example, through a nominee) a mandatory distribution or may 

receive, directly or indirectly, a discretionary distribution from the trust. 

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

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

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

property risk.

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

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

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

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

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

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

years. 

y) The term “Cash Value Insurance Contract” means an Insurance Contract 

(other than an indemnity reinsurance contract between two insurance 

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

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

policyholder is entitled to receive upon surrender or termination of the contract 

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

the amount the policyholder can borrow under or with regard to the contract. 

Notwithstanding the foregoing, the term “Cash Value” does not include an 

amount payable under an Insurance Contract as: 

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

indemnification of an economic loss incurred upon the occurrence of 

the event insured against; 

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

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

policy cancellation or termination, decrease in risk exposure during the 
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effective period of the Insurance Contract, or arising from a 

redetermination of the premium due to correction of posting or other 

similar error; or 

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

contract or group involved.

aa) The term “Reportable Account” means a Croatian Reportable Account or a

U.S. Reportable Account, as the context requires.

bb) The term “Croatian Reportable Account” means a Financial Account 

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

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

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

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

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

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

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

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

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

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

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

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

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

identified as a U.S. Reportable Account after application of the due diligence 

procedures in Annex I.

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

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

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

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

signatory, investment advisor, or intermediary, is not treated as holding the 

account for purposes of this Agreement, and such other person is treated as 

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

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

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

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

access the Cash Value or change the beneficiary of the contract. If no person 

can access the Cash Value or change the beneficiary, the Account Holder is any 

person named as the owner in the contract and any person with a vested 

entitlement to payment under the terms of the contract. Upon the maturity of a 

Cash Value Insurance Contract or an Annuity Contract, each person entitled to 

receive a payment under the contract is treated as an Account Holder.

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

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

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

States would have authority under applicable law to render orders or judgments 

concerning substantially all issues regarding administration of the trust, and (ii) 
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one or more U.S. persons have the authority to control all substantial decisions 

of the trust, or an estate of a decedent that is a citizen or resident of the United 

States. This subparagraph 1(ee) shall be interpreted in accordance with the 

U.S. Internal Revenue Code.

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

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

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

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

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

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

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

any wholly owned agency or instrumentality of any one or more of the 

foregoing; (v) any organization exempt from taxation under section 501(a) of 

the U.S. Internal Revenue Code or an individual retirement plan as defined in 

section 7701(a)(37) of the U.S. Internal Revenue Code; (vi) any bank as 

defined in section 581 of the U.S. Internal Revenue Code; (vii) any real estate 

investment trust as defined in section 856 of the U.S. Internal Revenue Code; 

(viii) any regulated investment company as defined in section 851 of the U.S. 

Internal Revenue Code or any entity registered with the U.S. Securities and 

Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 

80a-64); (ix) any common trust fund as defined in section 584(a) of the U.S. 

Internal Revenue Code; (x) any trust that is exempt from tax under section 

664(c) of the U.S. Internal Revenue Code or that is described in section 

4947(a)(1) of the U.S. Internal Revenue Code; (xi) a dealer in securities, 

commodities, or derivative financial instruments (including notional principal 

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

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

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

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

Revenue Code. 

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

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

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

interest (including any original issue discount), dividends, rents, salaries, 

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

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

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

foregoing, a U.S. Source Withholdable Payment does not include any payment 

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

Regulations.

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

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

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

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

Entity as not a Related Entity of another Entity if the two Entities are not 
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members of the same expanded affiliated group as defined in section 

1471(e)(2) of the U.S. Internal Revenue Code.

kk) The term “Croatian TIN” means a Croatian taxpayer identifying number. 

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

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

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

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

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

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

persons in equivalent or similar positions. The term “Controlling Persons”

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

Force Recommendations.

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

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

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

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

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

Article 2

Obligations to Obtain and Exchange Information with Respect to Reportable Accounts

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

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

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

pursuant to the provisions of Article 6 of the Convention.

2. The information to be obtained and exchanged is:

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

Reporting Croatian Financial Institution:

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

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

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

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

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

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

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

account number); 

(3) the name and identifying number of the Reporting Croatian Financial 

Institution;

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

Insurance Contract or Annuity Contract, the Cash Value or surrender 
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value) as of the end of the relevant calendar year or other appropriate 

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

immediately before closure; 

(5) in the case of any Custodial Account: 

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

dividends, and the total gross amount of other income generated 

with respect to the assets held in the account, in each case paid 

or credited to the account (or with respect to the account) during 

the calendar year or other appropriate reporting period; and 

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

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

appropriate reporting period with respect to which the 

Reporting Croatian Financial Institution acted as a custodian, 

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

Holder; 

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

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

appropriate reporting period; and

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

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

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

other appropriate reporting period with respect to which the Reporting 

Croatian Financial Institution is the obligor or debtor, including the 

aggregate amount of any redemption payments made to the Account 

Holder during the calendar year or other appropriate reporting period.

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

Account of each Reporting U.S. Financial Institution:

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

Croatia and is an Account Holder of the account; 

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

account number); 

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

Institution;

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

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

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

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

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

Article 3

Time and Manner of Exchange of Information

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

and characterization of payments made with respect to a Croatian Reportable Account may be 

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

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

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

denominated.

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

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

a) In the case of Croatia:

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

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

of Article 2 of this Agreement; 

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

the information described in subparagraphs 2(a)(1) through 2(a)(7) of 

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

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

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

subsequent years is the information described in subparagraphs 2(a)(1) 

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

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

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

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

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

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

paragraph 3 of Article 6 of this Agreement, the Parties are not required to obtain and include 

in the exchanged information the Croatian TIN or the U.S. TIN, as applicable, of any relevant 

person if such taxpayer identifying number is not in the records of the Reporting Financial 

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

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

birth in its records.

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

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

which the information relates. 
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6. The Competent Authorities of Croatia and the United States shall enter into an 

agreement or arrangement under the mutual agreement procedure provided for in Article 24 of 

the Convention, which shall:

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

Article 2 of this Agreement;

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

this Agreement; and

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

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

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

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

exchanged.

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

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

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

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

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

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

effective and reliable communications, and demonstrated capabilities to promptly resolve 

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

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

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

safeguards and infrastructure in place.

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

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

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

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

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

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

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

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

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

10. This Agreement shall terminate on September 30, 2015, if Article 2 of this Agreement 

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

Article 4

Application of FATCA to Croatian Financial Institutions

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

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

section 1471 of the U.S. Internal Revenue Code if Croatia complies with its obligations under 

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

Institution, and the Reporting Croatian Financial Institution:
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a) identifies U.S. Reportable Accounts and reports annually to the Croatian

Competent Authority the information required to be reported in subparagraph 

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

3 of this Agreement;

b) for each of 2015 and 2016, reports annually to the Croatian 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 Croatian Financial Institution is (i) acting as a 

qualified intermediary (for purposes of section 1441 of the U.S. Internal 

Revenue Code) that has elected to assume primary withholding responsibility 

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

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

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

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

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

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

Nonparticipating Financial Institution; and 

e) in the case of a Reporting Croatian 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 Croatian 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 Croatian 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 Croatian

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

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

2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall not 

require a Reporting Croatian Financial Institution to withhold tax under section 1471 or 1472 

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

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

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

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

with respect to such account.

3. Specific Treatment of Croatian 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, Croatian retirement plans described in 

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

located in, and regulated by, Croatia, or a predetermined contractual or legal arrangement, 
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operated to provide pension or retirement benefits or earn income for providing such benefits 

under the laws of Croatia 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 Croatian 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 Croatian Financial Institution, that otherwise 

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

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

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

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

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

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

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

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

U.S. Internal Revenue Code, provided that:

a) the Croatian 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 Croatian

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) Croatia 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;
14

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

by which participating FFIs are required to report similar information to the 

IRS under relevant U.S. Treasury Regulations; 

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

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

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

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

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

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

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

implementing this Agreement, Croatia may use, and may permit Croatian Financial 

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

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

the purposes of this Agreement.

Article 5

Collaboration on Compliance and Enforcement

1. Minor and Administrative Errors. A Competent Authority shall notify the 

Competent Authority of the other Party when the first-mentioned Competent Authority has 

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

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

Competent Authority of such other Party shall apply its domestic law (including applicable 

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

this Agreement.

2. Significant Non-Compliance.

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

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

significant non-compliance with the obligations under this Agreement with 

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

Competent Authority of such other Party shall apply its domestic law 

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

described in the notice. 

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

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

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

shall treat the Reporting Croatian Financial Institution as a Nonparticipating 

Financial Institution pursuant to this subparagraph 2(b).

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

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

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

obligations shall remain the responsibility of the Reporting Financial Institutions.
15

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

prevent Financial Institutions from adopting practices intended to circumvent the reporting 

required under this Agreement.

Article 6

Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange 

and Transparency

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

equivalent levels of reciprocal automatic information exchange with Croatia. The 

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

the exchange relationship with Croatia by pursuing the adoption of regulations and advocating 

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

information exchange.

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

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

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

proceeds withholding that minimizes burden. 

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

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

a) Croatia commits to establish, by January 1, 2017, for reporting with respect to 

2017 and subsequent years, rules requiring Reporting Croatian Financial 

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

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

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

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

Institutions to obtain and report the Croatian TIN of each Account Holder of a 

Croatian Reportable Account as required pursuant to subparagraph 2(b)(1) of 

Article 2 of this Agreement.

Article 7

Consistency in the Application of FATCA to Partner Jurisdictions 

1. Croatia 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 Croatian 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 

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

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

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

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

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

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

thereof.
16

Article 8

Consultations and Amendments

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

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

Agreement.

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

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

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

Article 9

Annexes

The Annexes form an integral part of this Agreement.

Article 10

Term of Agreement

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

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

force of this Agreement. 

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

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

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

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

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

Agreement.

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

Governments, have signed this Agreement.

Done at _____, this __ day of ______, 2015, in duplicate, in the English language. A Croatian 

language text shall be prepared which shall be considered equally authentic upon an exchange 

of diplomatic notes between the Parties confirming its conformity with the English language 

text. 

FOR THE GOVERNMENT OF THE

UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF

THE REPUBLIC OF CROATIA:
17

ANNEX I

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

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN 

NONPARTICIPATING FINANCIAL INSTITUTIONS

I. General.

 

A. Croatia shall require that Reporting Croatian 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, 

Croatia may permit Reporting Croatian 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. Croatia may permit Reporting Croatian 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). 
18

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 Croatian 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 Croatia 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 

Croatia 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 Croatia requires reporting or 

withholding with respect to insurance products held by residents of 

Croatia).

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

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

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

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

(“Lower Value Accounts”).

1. Electronic Record Search. The Reporting Croatian Financial 

Institution must review electronically searchable data maintained by the 

Reporting Croatian Financial Institution for any of the following U.S. indicia:

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

resident;

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

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

office box);

d) Current U.S. telephone number;
19

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 Croatian 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 Croatian 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 Croatian 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 Croatian 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: 
20

(a) The reason the Account Holder does not have 

such a certificate despite relinquishing U.S. 

citizenship; or

(b) The reason the Account Holder did not obtain 

U.S. citizenship at birth.

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

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

numbers that are the only telephone numbers associated with 

the account, the Reporting Croatian 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 Croatian 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 Croatian 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
21

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

section VI of this Annex I, establishing the Account 

Holder’s non-U.S. status.

C. Additional Procedures Applicable to Preexisting Individual Accounts That 

Are Lower Value Accounts.

1. Review of Preexisting Individual Accounts that are Lower Value 

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

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

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

more U.S. indicia described in subparagraph B(1) of this section being 

associated with the account, then the Reporting Croatian 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 Croatian Financial 

Institution must review electronically searchable data maintained by the 

Reporting Croatian Financial Institution for any of the U.S. indicia 

described in subparagraph B(1) of this section.

2. Paper Record Search. If the Reporting Croatian 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 Croatian 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 Croatian 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;
22

c) The most recent documentation obtained by the Reporting 

Croatian 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 Croatian Financial Institution is not required to perform the 

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

Reporting Croatian 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 Croatian Financial 

Institution;

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

any, with the Reporting Croatian 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 Croatian 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 

Croatian Financial Institution must treat as a U.S. Reportable Account 

any High Value Account assigned to a relationship manager (including 

any Financial Accounts aggregated with such High Value Account) if 

the relationship manager has actual knowledge that the Account Holder

is a Specified U.S. Person.

5. Effect of Finding U.S. Indicia.

a) If none of the U.S. indicia listed in subparagraph B(1) of this 

section are discovered in the enhanced review of High Value 

Accounts described above, and the account is not identified as 

held by a Specified U.S. Person in subparagraph D(4) of this 

section, then no further action is required until there is a change 
23

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 Croatian

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 Croatian 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 Croatian 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 

Croatian 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 Croatian 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 Croatian

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 Croatian Financial Institution applies the enhanced 

review procedures described in paragraph D of this section to a High 
24

Value Account, the Reporting Croatian 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 Croatian 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 Croatian 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 Croatian 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 Croatian 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 Croatian 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 Croatia provide for such an election, 

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

reported as U.S. Reportable Accounts:

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

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

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

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

period. 
25

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 Croatian Financial Institution must obtain a 

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

allows the Reporting Croatian 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 Croatian

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 Croatian 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 Croatian Financial Institution to 

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

incorrect or unreliable, the Reporting Croatian 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 Croatian

Financial Institution is unable to obtain a valid self-certification, the 

Reporting Croatian 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 Croatian 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 Croatia provide for 

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

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

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

exceeds $1,000,000.

 

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

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

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

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

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

forth in paragraph D of this section. 
26

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 Croatian 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 Croatian 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 Croatian 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 Croatian 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. 
27

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 

Croatian Financial Institution may determine that the Account 

Holder is Croatian Financial Institution or other Partner 

Jurisdiction Financial Institution if the Reporting Croatian

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 Croatian 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 Croatian 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 Croatian Financial Institution or 

other Partner Jurisdiction Financial Institution, then the 

Reporting Croatian 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 Croatian 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 Croatian Financial Institution 

must identify (i) whether the Account Holder has Controlling Persons, 

(ii) whether the Account Holder is a Passive NFFE, and (iii) whether 

any of the Controlling Persons of the Account Holder is a U.S. citizen 

or resident. In making these determinations the Reporting Croatian

Financial Institution must follow the guidance in subparagraphs D(4)(a) 
28

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 Croatian 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 Croatian 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 Croatian Financial Institution may rely on: 

(1) Information collected and maintained pursuant to 

AML/KYC Procedures in the case of a Preexisting Entity 

Account held by one or more NFFEs with an account 

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

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

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

Holder or such Controlling Person in the case of a 

Preexisting Entity Account held by one or more NFFEs 

with an account balance or value that exceeds 

$1,000,000. 

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

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

Account.

E. Timing of Review and Additional Procedures Applicable to Preexisting 

Entity Accounts.

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

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

30, 2016.

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

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

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

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

which the account balance or value exceeds $1,000,000.
29

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

Account that causes the Reporting Croatian 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 Croatian 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 Croatian 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 Croatia 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 Croatian 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 Croatian Financial Institution 

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

Croatian 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 Croatian

Financial Institution may determine that the Account Holder is an 

Active NFFE, a Croatian Financial Institution, or other Partner 

Jurisdiction Financial Institution if the Reporting Croatian 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 Croatian Financial Institution, as 

applicable. 

2. If the Account Holder is Croatian Financial Institution or other Partner 

Jurisdiction Financial Institution treated by the IRS as a 

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

Reportable Account, but payments to the Account Holder must be 

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

Agreement.

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

a self-certification from the Account Holder to establish the Account 
30

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 

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

Reportable Account.

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

Croatian 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 Croatian 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, Croatian 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 Croatian 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 

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

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

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

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

1. AML/KYC Procedures. “AML/KYC Procedures” means the 

customer due diligence procedures of a Reporting Croatian Financial 

Institution pursuant to the anti-money laundering or similar 

requirements of Croatia to which such Reporting Croatian Financial 

Institution is subject. 
31

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 Croatia 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 companies as capital assets for investment purposes;
32

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 non-charitable Entity other than pursuant to the 

conduct of the NFFE’s charitable activities, or as 

payment of reasonable compensation for services 

rendered, or as payment representing the fair market 

value of property which the NFFE has purchased; and

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

residence or the NFFE’s formation documents require 
33

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

assets be distributed to a governmental entity or other 

non-profit organization, or escheat to the government of 

the NFFE’s jurisdiction of residence or any political 

subdivision thereof.

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

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

2014.

C. Account Balance Aggregation and Currency Translation Rules.

1. Aggregation of Individual Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an individual, 

a Reporting Croatian Financial Institution is required to aggregate all 

Financial Accounts maintained by the Reporting Croatian Financial 

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

Reporting Croatian 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 Croatian Financial Institution is required to take into account 

all Financial Accounts that are maintained by the Reporting Croatian

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

the Reporting Croatian 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 Croatian 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 Croatian Financial Institution must convert the 

U.S. dollar threshold amounts described in this Annex I into such 

currency using a published spot rate determined as of the last day of the 
34

calendar year preceding the year in which the Reporting Croatian

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 Croatian 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 Croatian Financial Institution has actual knowledge, or reason to know,

that the beneficiary is a Specified U.S. Person. A Reporting Croatian 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 Croatian

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 Croatian

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

Specified U.S. Person, the Reporting Croatian Financial Institution must follow the 

procedures in subparagraph B(3) of section II of this Annex I.
35

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

paragraph C of section I of this Annex I, Croatia may permit Reporting Croatian

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 Croatia has provided a written notice to the United 

States prior to entry into force of this Agreement that, as of July 1, 2014, 

Croatia lacked the legal authority to require Reporting Croatian 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 Croatian 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 Croatia has the ability to compel Reporting 

Croatian Financial Institutions to comply with the due diligence procedures

described in section III or section V of this Annex I, as applicable, which date 

Croatia 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 Croatian 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 Croatian Financial Institutions must: (i) with 

respect to a New Individual Account described in subparagraph G(1) of 

this section, request the self-certification specified in section III of this 

Annex I and confirm the reasonableness of such self-certification 

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

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

subparagraph G(1) of this section, perform the due diligence 

procedures specified in section V of this Annex I and request 

information as necessary to document the account, including any selfcertification, required by section V of this Annex I. 
36

b) Croatia 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 Croatian 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 Croatian 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) Croatia must report on any closed account that is identified 

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

Account or as an account held by a Nonparticipating Financial 

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

30 next following the date that the account is identified as a U.S. 

Reportable Account or as an account held by a Nonparticipating 

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

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

Nonparticipating Financial Institution, as applicable. The information 

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

that would have been reportable under this Agreement if the account 

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

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

the account was opened.
37

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, Croatia may permit Reporting Croatian

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.
38

ANNEX II

The following Entities shall be treated as exempt beneficial owners or deemed-compliant 

FFIs, as the case may be, and the following accounts are excluded from the definition of 

Financial Accounts.

This Annex II may be modified by a mutual written decision entered into between the 

Competent Authorities of Croatia 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 Croatian 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 Croatia, any political subdivision 

of Croatia (which, for the avoidance of doubt, includes a state, province, county, or 

municipality), or any wholly owned agency or instrumentality of Croatia or any one or 

more of the foregoing (each, a “Croatian Governmental Entity”). This category is 

comprised of the integral parts, controlled entities, and political subdivisions of 

Croatia.

1. An integral part of Croatia means any person, organization, agency, 

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

constitutes a governing authority of Croatia. The net earnings of the 

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

accounts of Croatia, 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 

Croatia or that otherwise constitutes a separate juridical entity, provided 

that:

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

Croatian Governmental Entities directly or through one or more 

controlled entities; 

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

the accounts of one or more Croatian Governmental Entities,
39

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 Croatian 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 Croatia; 

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 Croatia itself, issuing instruments 

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

that is separate from the government of the Croatia, whether or not owned in whole or 

in part by Croatia.

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

treated as Non-Reporting Croatian 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 Croatia 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 

Croatia; and 

3. Satisfies at least one of the following requirements:

a) The fund is generally exempt from tax in Croatia on investment 

income under the laws of Croatia due to its status as a retirement 

or pension plan; 
40

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 Croatia to 

provide retirement, disability, or death benefits to beneficiaries that are current or 

former employees (or persons designated by such employees) of one or more 

employers in consideration for services rendered, provided that:

1. The fund has fewer than 50 participants; 

2. The fund is sponsored by one or more employers that are not 

Investment Entities or Passive NFFEs; 

3. The employee and employer contributions to the fund (other than 

transfers of assets from treaty-qualified retirement funds described in 

paragraph A of this section or retirement and pension accounts 

described in subparagraph A(1) of section V of this Annex II) are 

limited by reference to earned income and compensation of the 

employee, respectively; 

4. Participants that are not residents of Croatia 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 Croatia.

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

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

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

exempt beneficial owner (or persons designated by such employees), or that are not 
41

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 Croatian Financial Institution solely because it is an Investment Entity, 

provided that each direct holder of an Equity Interest in the Entity is an exempt 

beneficial owner, and each direct holder of a debt interest in such Entity is either a 

Depository Institution (with respect to a loan made to such Entity) or an exempt 

beneficial owner.

III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Compliant

FFIs. The following Financial Institutions are Non-Reporting Croatian 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 Croatia; 

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

of Croatia. 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 Croatia. For this purpose, a Financial Institution shall not be 

considered to have solicited customers or Account Holders outside 

Croatia 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 Croatia 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 Croatia 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 Croatia’s AML due diligence 

requirements;

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

the Financial Institution must be held by residents (including residents 

that are Entities) of Croatia or a Member State of the European Union; 
42

6. Beginning on or before July 1, 2014, the Financial Institution must have

policies and procedures, consistent with those set forth in Annex I, to

prevent the Financial Institution from providing a Financial Account to

any Nonparticipating Financial Institution and to monitor whether the 

Financial Institution opens or maintains a Financial Account for any

Specified U.S. Person who is not a resident of Croatia (including a U.S. 

Person that was a resident of Croatia when the Financial Account was 

opened but subsequently ceases to be a resident of Croatia) or any 

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

citizens who are not residents of Croatia; 

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 

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

residents or U.S. citizens who are not residents of Croatia is identified, 

the Financial Institution must report such Financial Account as would 

be required if the Financial Institution were a Reporting Croatian

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 Croatia 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 Croatian

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 Croatia and, with the 

exception of any Related Entity that is a retirement fund described in 

paragraphs A through D of section II of this Annex II, satisfy the 

requirements set forth in this paragraph A; and 

10. The Financial Institution must not have policies or practices that

discriminate against opening or maintaining Financial Accounts for

individuals who are Specified U.S. Persons and residents of Croatia.

B. Local Bank. A Financial Institution satisfying the following requirements:

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

regulated under the laws of Croatia as) (a) a bank or (b) a credit union 

or similar cooperative credit organization that is operated without 

profit;
43

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 Croatia, and

any Related Entity that is a Financial Institution, with the exception of 

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

through D of section II of this Annex II or a Financial Institution with 

only low-value accounts described in paragraph C of this section, must 

satisfy the requirements set forth in this paragraph B. 

C. Financial Institution with Only Low-Value Accounts. A Croatian 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 Croatian Financial Institution satisfying the 

following requirements:

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

issuer of credit cards that accepts deposits only when a customer makes 

a payment in excess of a balance due with respect to the card and the 

overpayment is not immediately returned to the customer; and

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

implements policies and procedures to either prevent a customer deposit 

in excess of $50,000, or to ensure that any customer deposit in excess of 
44

$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 Croatian 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 Croatia 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 Croatia that is not a qualified 

intermediary, withholding foreign partnership, or withholding foreign 

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

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

the Financial Institution. 

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

the Financial Institution is a controlled foreign corporation1 organized 

under the laws of Croatia that is not a qualified intermediary, withholding 

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

Treasury Regulations; (b) the Financial Institution is wholly owned, 

directly or indirectly, by a Reporting U.S. Financial Institution that 

agrees to act, or requires an affiliate of the Financial Institution to act, as 

a sponsoring entity for the Financial Institution; and (c) the Financial 

Institution shares a common electronic account system with the 

sponsoring entity that enables the sponsoring entity to identify all 

Account Holders and payees of the Financial Institution and to access all 

account and customer information maintained by the Financial Institution

including, but not limited to, customer identification information, 

 1 A “controlled foreign corporation” means any foreign corporation if more than 50 percent of the total 

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

of such corporation, is owned, or is considered as owned, by “United States shareholders” on any day during the 

taxable year of such foreign corporation. The term a “United States shareholder” means, with respect to any 

foreign corporation, a United States person who owns, or is considered as owning, 10 percent or more of the 

total combined voting power of all classes of stock entitled to vote of such foreign corporation.
45

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, 2015 and the date that is 

90 days after such a U.S. Reportable Account is first identified; 

d) The sponsoring entity agrees to perform, on behalf of the 

Financial Institution, all due diligence, withholding, reporting, 

and other requirements that the Financial Institution would have 

been required to perform if it were a Reporting Croatian

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 Croatian 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 Croatian Financial Institution;
46

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 Croatian

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 Croatia 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 Croatia

that is regulated as a collective investment vehicle, provided that all of the interests in 

the collective investment vehicle (including debt interests in excess of $50,000) are 

held by or through one or more exempt beneficial owners, Active NFFEs described in 

subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. 

Persons, or Financial Institutions that are not Nonparticipating Financial Institutions. 

F. Special Rules. The following rules apply to an Investment Entity: 

1. With respect to interests in an Investment Entity that is a collective 

investment vehicle described in paragraph E of this section, the 

reporting obligations of any Investment Entity (other than a Financial 

Institution through which interests in the collective investment vehicle 

are held) shall be deemed fulfilled.
47

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 Croatian

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 Croatia

that is not described in paragraph E or subparagraph F(2) of this 

section, consistent with paragraph 3 of Article 5 of the Agreement, the 

reporting obligations of all other Investment Entities with respect to 

such interests shall be deemed fulfilled if the information required to be 

reported by the first-mentioned Investment Entity pursuant to the 

Agreement with respect to such interests is reported by such Investment 

Entity or another person.

4. An Investment Entity established in Croatia that is regulated as a 

collective investment vehicle shall not fail to qualify under paragraph E 

or subparagraph F(2) of this section, or otherwise as a deemedcompliant FFI, solely because the collective investment vehicle has 

issued physical shares in bearer form, provided that: 

a) The collective investment vehicle has not issued, and does not 

issue, any physical shares in bearer form after December 31, 

2012; 

b) The collective investment vehicle retires all such shares upon 

surrender; 

c) The collective investment vehicle (or a Reporting Croatian

Financial Institution) performs the due diligence procedures set 

forth in Annex I and reports any information required to be 

reported with respect to any such shares when such shares are 

presented for redemption or other payment; and 

d) The collective investment vehicle has in place policies and 

procedures to ensure that such shares are redeemed or 
48

immobilized as soon as possible, and in any event prior to 

January 1, 2017.

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 Croatia that satisfies the following requirements under 

the laws of Croatia.

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 Croatia are 

deductible or excluded from the gross income of the account 

holder or taxed at a reduced rate, or taxation of investment 

income from the account is deferred or taxed at a reduced rate);

c) Annual information reporting is required to the tax authorities in 

Croatia 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 Croatia

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

following requirements under the laws of Croatia.

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 Croatia 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);
49

c) Withdrawals are conditioned on meeting specific criteria related

to the purpose of the savings account (for example, the provision 

of educational or medical benefits), or penalties apply to 

withdrawals made before such criteria are met; and

d) Annual contributions are limited to $50,000 or less, applying the 

rules set forth in Annex I for account aggregation and currency 

translation.

3. Home Savings Bank Accounts. A savings account maintained in 

Croatia by a Croatian Home Savings Bank established under the Act on 

Housing Savings and Government Incentive to Housing Savings, if 

annual contributions to the account are $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 Croatia with a coverage period that will end before the insured 

individual attains age 90, provided that the contract satisfies the following 

requirements: 

1. Periodic premiums, which do not decrease over time, are payable at 

least annually during the period the contract is in existence or until the 

insured attains age 90, whichever is shorter;

2. The contract has no contract value that any person can access (by 

withdrawal, loan, or otherwise) without terminating the contract;

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

termination of the contract cannot exceed the aggregate premiums paid 

for the contract, less the sum of mortality, morbidity, and expense 

charges (whether or not actually imposed) for the period or periods of 

the contract’s existence and any amounts paid prior to the cancellation 

or termination of the contract; and

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

C. Account Held By an Estate. An account maintained in Croatia 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 Croatia 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:
50

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

money, deposit in an amount appropriate to secure an obligation 

directly related to the transaction, or a similar payment, or is 

funded with a financial asset that is deposited in the account in 

connection with the sale, exchange, or lease of the property; 

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

obligation of the purchaser to pay the purchase price for the 

property, the seller to pay any contingent liability, or the lessor 

or lessee to pay for any damages relating to the leased property 

as agreed under the lease;

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

will be paid or otherwise distributed for the benefit of the 

purchaser, seller, lessor, or lessee (including to satisfy such 

person’s obligation) when the property is sold, exchanged, or 

surrendered, or the lease terminates;

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

connection with a sale or exchange of a financial asset; and

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

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

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

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

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

of taxes at a later time.

E. Partner Jurisdiction Accounts. An account maintained in Croatia 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. 
51

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.