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

Government of Chile for Cooperation to Facilitate the Implementation of FATCA

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

(each, a “Party,” and together, the “Parties”) seek to build on their existing relationship with 

respect to mutual assistance in tax matters and desire to conclude an agreement to improve

their cooperation in combating international tax evasion;

Whereas, Article 27 of the Convention between the United States and Chile for the Avoidance

of Double Taxation with Respect to Taxes on Income (the “Convention”), done at Washington 

on February 4, 2010 authorizes the exchange of information for tax purposes;

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 Chile is supportive of the underlying policy goal of FATCA to 

improve tax compliance;

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

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

impediments;

Whereas, intergovernmental cooperation to facilitate FATCA implementation would address 

these issues and reduce burdens for Chilean financial institutions;

Whereas, the Parties desire to conclude an agreement to provide for cooperation to facilitate 

the implementation of FATCA based on direct reporting by Chilean Financial Institutions to 

the U.S. Internal Revenue Service, supplemented by the exchange of information upon 

request pursuant to the Convention upon its entry into force, 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.

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 “Chile” means the Republic of Chile. 
2

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

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

The IRS shall publish a list identifying all Partner Jurisdictions.

f) The term “Competent Authority” means:

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

delegate; and

2) In the case of Chile, 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 “Foreign Reportable Amount” means, in accordance with relevant 

U.S. Treasury Regulations, a payment of fixed or determinable annual or 

periodical income that would be a withholdable payment if it were from sources 

within the United States.

i) 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.

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

the ordinary course of a banking or similar business.

k) The term “Investment Entity” means any Entity that conducts as a business 

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

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

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

derivatives, etc.); foreign exchange; exchange, interest rate and index

instruments; transferable securities; or commodity futures trading;

2) individual and collective portfolio management; or

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

behalf of other persons.

This subparagraph 1(k) 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.

l) 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.
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m) The term “Chilean Financial Institution” means (i) any Financial Institution

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

located outside Chile, and (ii) any branch of a Financial Institution not resident in

Chile, if such branch is located in Chile.

n) 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.

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

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

p) The term “Non-Reporting Chilean Financial Institution” means any Chilean

Financial Institution, or other Entity resident in Chile, that is described in Annex

II as a Non-Reporting Chilean Financial Institution or that otherwise qualifies as

a deemed-compliant FFI or an exempt beneficial owner under relevant U.S.

Treasury Regulations in effect on the date of signature of this Agreement]

q) 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 Chilean Financial Institution or other Partner Jurisdiction Financial

Institution other than a Financial Institution treated as a Nonparticipating

Financial Institution pursuant to paragraph 2 of Article 4 of this Agreement or the 

corresponding provision in an agreement between the United States and a Partner 

Jurisdiction.

r) The term “New Account” means a Financial Account opened by a Reporting

Chilean Financial Institution on or after July 1, 2014.

s) The term “U.S. Account” means a Financial Account maintained by a Reporting

Chilean 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.

Account if such account is not identified as a U.S. Account after application of the 

due diligence procedures in Annex I.

t) The term “Non-Consenting U.S. Account” means a Financial Account 

maintained by a Reporting Chilean Financial Institution as of June 30, 2014 with 

respect to which (i) a Reporting Chilean Financial Institution has determined that 

it is a U.S. Account in accordance with the due diligence procedures in Annex I, 

(ii) the laws of Chile prohibit the reporting required under an FFI Agreement 

absent consent of the Account Holder, (iii) the Reporting Chilean Financial 

Institution has sought, but was unable to obtain, the required consent to report or 

the Account Holder’s U.S. TIN; and (iv) the Reporting Chilean Financial 

Institution has reported, or was required to report, aggregate account information 

to the IRS as prescribed under sections 1471 to 1474 of the U.S. Internal Revenue

Code and relevant U.S. Treasury Regulations.

u) The term “Financial Account” has the meaning set forth in relevant U.S.
4

Treasury Regulations, but does not include any account that is excluded from 

the definition of Financial Account in Annex II.

v) The term “FFI Agreement” means an agreement that sets forth the requirements, 

consistent with this Agreement, for the Reporting Chilean Financial Institution to 

be treated as complying with the requirements of section 1471(b) of the U.S.

Internal Revenue Code.

w) 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.

x) The terms “Cash Value Insurance Contract” and “Annuity Contract” have the 

meanings set forth in relevant U.S. Treasury Regulations.

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

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

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

authority under applicable law to render orders or judgments concerning

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

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

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

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

Revenue Code.

z) 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
5

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.

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

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

cc) 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, Chile may treat an

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

members of the same expanded affiliated group as defined in section 1471(e)(2) 

of the U.S. Internal Revenue Code.

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

ee) 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

Reporting and Exchange of Information

1. Directive to Chilean Financial Institutions. Chile shall direct and enable all

Reporting Chilean Financial Institutions to:

a) register on the IRS FATCA registration website with the IRS by July 1, 2014,

and comply with the requirements of an FFI Agreement, including with respect 

to due diligence, reporting, and withholding;

b) with respect to Financial Accounts maintained by Reporting Chilean Financial 

Institutions as of June 30, 2014 identified as U.S. Accounts,
6

(i) request from each Account Holder the Account Holder’s U.S. TIN and 

consent to report and simultaneously inform the Account Holder in writing 

that, if the U.S. TIN and consent are not given, (1) aggregate information 

about the account shall be reported to the IRS, (2) information about the 

account may give rise to a group request by the IRS for specific information 

about the account, (3) in such case, the account information shall be 

transmitted to the Chilean tax administration, and (4) the Chilean tax 

administration may exchange this information with the IRS in accordance

with paragraph 2 of this Article;

(ii) report annually to the IRS, in the time and manner required by an FFI 

Agreement and relevant U.S. Treasury Regulations, the aggregate 

information required with respect to Non-Consenting U.S. Accounts;

and

(iii) notwithstanding subparagraph (ii), report to the IRS the aggregate 

number and aggregate value of all Non-Consenting U.S. Accounts no 

later than January 31 of the year following the year to which the 

information relates;

c) with respect to accounts of, or obligations to, Nonparticipating Financial 

Institutions that exist as of June 30, 2014, and in connection with which the 

Reporting Chilean Financial Institution expects to pay a Foreign Reportable

Amount,

(i) with respect to calendar years 2015 and 2016, request from each such 

Nonparticipating Financial Institution the Nonparticipating Financial 

Institution’s consent to report and simultaneously inform the 

Nonparticipating Financial Institution in writing that, if such consent is not 

given, (1) aggregate information about Foreign Reportable Amounts paid to 

the Nonparticipating Financial Institution shall be reported to the IRS, (2)

such information may give rise to a group request by the IRS for specific

information about the account or obligation, (3) in such case, the information

about the account or obligation shall be transmitted to the Chilean tax 

administration, and (4) the Chilean tax administration may exchange this 

information with the IRS in accordance with paragraph 2 of this Article;

(ii) with respect to calendar years 2015 and 2016, report to the IRS the number 

of non-consenting Nonparticipating Financial Institutions to which Foreign 

Reportable Amounts were paid during the year and the aggregate value of 

all such payments no later than January 31 of the year following the year to 

which the information relates;

d) with respect to New Accounts identified as U.S. Accounts, obtain from each 

Account Holder consent to report, consistent with the requirements of an FFI 

Agreement, as a condition of account opening; and
7

e) with respect to new accounts opened by, or obligations entered into with, a 

Nonparticipating Financial Institution on or after July 1, 2014, and in 

connection with which the Reporting Chilean Financial Institution expects 

to pay a Foreign Reportable Amount, obtain from each such 

Nonparticipating Financial Institution consent to report, consistent with the 

requirements of an FFI Agreement, as a condition of opening the account, or 

entering into the obligation.

2. Exchange of Information.

a) In the context of FATCA implementation, the U.S. Competent Authority may make 

group requests to the Chilean Competent Authority based on the aggregate

information reported to the IRS pursuant to the directive described in 

subparagraphs 1(b)(ii) and 1(c)(ii) of this Article, for all the information about 

Non-Consenting U.S. Accounts and Foreign Reportable Amounts paid to 

Nonparticipating Financial Institutions that the Reporting Chilean Financial 

Institution would have had to report under an FFI Agreement had it obtained 

consent. Such requests shall be made pursuant to Article 27 of the Convention. 

Accordingly, such requests shall not be made prior to the entry into force of the 

Convention and shall apply to information for the time period beginning on or 

after the date of signature of this Agreement.

b) The information requested pursuant to subparagraph 2(a) of this Article shall be 

considered information that is foreseeably relevant for carrying out the

administration or enforcement of the domestic laws of the United States 

concerning taxes covered by the Convention and under which taxation is not 

contrary to the Convention, without regard to whether the Reporting Chilean

Financial Institution or another party has contributed to non-compliance of the

taxpayers in the group request.

c) The Chilean Competent Authority shall, within eight months of the receipt of the

group request, provide the U.S. Competent Authority with all such requested 

information in the same format in which the information would have been 

reported if it had been reported directly to the IRS by the Reporting Chilean

Financial Institution. The Chilean Competent Authority shall notify the U.S. 

Competent Authority and the relevant Reporting Chilean Financial Institution if 

there will be any delay in the exchange of the requested information. In such 

case, the provisions of subparagraph 2(b) of Article 3 of this Agreement shall 

apply with respect to the Reporting Chilean Financial Institution, and the Chilean 

Competent Authority must exchange the requested information with the U.S. 

Competent Authority as soon as possible.

d) Notwithstanding subparagraph 2(c) of this Article, the Chilean Competent 

Authority is not required to obtain and exchange the U.S. TIN of the Account

Holder of a Non-Consenting U.S. Account if such U.S. TIN is not in the

records of the Reporting Chilean Financial Institution. In such a case, the 

Chilean Competent Authority shall obtain and include in the exchanged 

information the date of birth of the relevant person, if the Reporting Chilean
8

Financial Institution has such date of birth in its records.

Article 3

Application of FATCA to Chilean Financial Institutions

1. Treatment of Reporting Chilean Financial Institutions. Subject to the provisions 

of paragraph 2 of Article 4 of this Agreement, each Reporting Chilean Financial Institution

that registers with the IRS on the IRS FATCA registration website and complies with the 

terms of an FFI Agreement shall be treated as complying with the requirements of, and as not 

subject to withholding under, section 1471 of the U.S. Internal Revenue Code.

2. Suspension of Rules Relating to Non-Consenting U.S. Accounts.

a) Subject to subparagraph 2(b) of this Article, the United States shall not require a

Reporting Chilean 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:

(i) the Reporting Chilean Financial Institution complies with the directives in

paragraph 1 of Article 2 of this Agreement with respect to the account; and

(ii) the Chilean Competent Authority exchanges with the U.S. Competent 

Authority the requested information described in subparagraph 2(a) of Article

2 of this Agreement within eight months from the date of the receipt of such 

request.

b) If the condition of subparagraph 2(a)(ii) of this Article is not fulfilled, the 

Reporting Chilean Financial Institution shall be required to treat the account as 

held by a recalcitrant account holder as defined in relevant U.S. Treasury

Regulations, including by withholding tax where required by those U.S. Treasury

Regulations, beginning on the date that is eight months after the date of the receipt

of the request described in subparagraph 2(a) of Article 2 of this Agreement and 

ending on the date on which the Chilean Competent Authority exchanges the 

requested information with the U.S. Competent Authority.

3. Specific Treatment of Chile 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, Chile retirement plans described in Annex 

II. For this purpose, a Chile retirement plan includes an Entity established or located in, and 

regulated by, Chile, or a predetermined contractual or legal arrangement, operated to provide 

pension or retirement benefits or earn income for providing such benefits under the laws of

Chile and regulated with respect to contributions, distributions, reporting, sponsorship, and 

taxation.

4. Identification and Treatment of Other Deemed Compliant FFIs and Exempt 
9

Beneficial Owners. The United States shall treat each Non-Reporting Chilean 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 Chilean Financial Institution, that otherwise 

meets the requirements described in Article 2 of this Agreement 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 Chilean Financial Institution shall continue to be treated as a 

participating FFI, deemed-compliant FFI, or exempt beneficial owner, as appropriate, for 

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

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

separate Nonparticipating Financial Institution 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 to the 

IRS 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 Chilean 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 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, Chile may use, and may permit Chilean 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 4

Verification and Enforcement

1. Minor and Administrative Errors. Consistent with the terms of an FFI Agreement, 

the U.S. Competent Authority may make an inquiry directly to a Reporting Chilean Financial 

Institution where it has reason to believe that administrative errors or other minor errors may

have led to incorrect or incomplete information reporting inconsistent with the requirements of

an FFI Agreement. The competent authority agreement or arrangement may provide that the 

U.S. Competent Authority would notify the Chilean Competent Authority when the U.S.
10

Competent Authority makes such an inquiry of a Reporting Chilean Financial Institution

regarding the Reporting Chilean Financial Institution’s compliance with the conditions set 

forth in this Agreement.

2. Significant Non-Compliance. The U.S. Competent Authority shall notify the Chilean 

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

significant non-compliance with the requirements of an FFI Agreement or this Agreement with 

respect to a Reporting Chilean Financial Institution. If the non-compliance is not resolved 

within a period of 12 months after notification of significant non-compliance is first provided 

by the U.S. Competent Authority, the United States shall treat the Reporting Chilean Financial 

Institution as a Nonparticipating Financial Institution pursuant to this paragraph 2.

3. Competent Authority Consultation The Competent Authorities of Chile and the United 

States may consult on notified cases of significant non-compliance pursuant to paragraph 2 of 

this Article. Upon entry into force of the Convention, the Competent Authorities of Chile and 

the United States shall enter into an agreement or arrangement under the mutual agreement

procedure provided for in Article 26 of the Convention which shall:

a) establish the procedures for the exchange of information described in paragraph 2 

of Article 2 of this Agreement; and

b) prescribe rules and procedures as may be necessary to implement this Article.

4. Reliance on Third Party Service Providers. In accordance with the provisions of 

an FFI Agreement and relevant U.S. Treasury Regulations, Reporting Chilean Financial 

Institutions may use third party service providers to fulfill the requirements of an FFI

Agreement, but these requirements shall remain the responsibility of the Reporting 

Chilean Financial Institutions.

Article 5

Mutual Commitment to Continue to Enhance the Effectiveness of Information

Exchange and Transparency

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

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

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

proceeds withholding that minimizes burden.

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

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

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

of information, including the development of reporting and due diligence standards for financial 

institutions.

Article 6

Consistency in the Application of FATCA to Partner Jurisdictions

1. Chile shall be granted the benefit of any more favorable terms under Article 3 or Annex

I of this Agreement relating to the application of FATCA to Chilean 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 Chile described in
11

Article 2 of this Agreement, and subject to the same terms and conditions as described therein 

and in Articles 4, 6, 8, and 9 of this Agreement.

2. The United States shall notify Chile 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 Chile declines the application thereof.

Article 7

Reciprocal Information Exchange

Upon entry into force of the Convention, consistent with its obligations under the Convention, 

the United States shall cooperate with Chile to respond to requests pursuant to the Convention 

to collect and exchange information on accounts held in U.S. financial institutions by

residents of Chile. In addition, when and to the extent Chile seeks to collaborate with the

United States to implement FATCA based on direct reporting by Chilean Financial 

Institutions to the Government of Chile, followed by the transmission of such information to 

the United States, the United States is willing to negotiate such an agreement on the same 

terms and conditions as similar agreements concluded with Partner Jurisdictions, subject to

the Parties having determined that the standards of confidentiality and other prerequisites for

such cooperation are fulfilled.

Article 8

Confidentiality

1. The Chilean Competent Authority shall treat any information received from the United 

States pursuant to paragraph 2 of Article 2 and Article 4 of this Agreement as confidential and 

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

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

the performance of the obligations of Chile under this Agreement.

2. Information provided to the U.S. Competent Authority pursuant paragraph 2 of Article 2 

and Article 4 of this Agreement shall be treated as confidential and may be disclosed only to 

persons or authorities (including courts and administrative bodies) of the Government of the 

United States concerned with the assessment, collection, or administration of, the enforcement 

or prosecution in respect of, or the determination of appeals in relation to, U.S. federal taxes, or 

the oversight of such functions. Such persons or authorities shall use such information only for 

such purposes. Such persons may disclose the information in public court proceedings or in 

judicial decisions. The information may not be disclosed to any other person, entity, authority, 

or jurisdiction. Notwithstanding the foregoing, where Chile provides prior, written consent, the 

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

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

Article 9

Consultations and Amendments

1. In case any difficulties in the implementation or interpretation of this Agreement arise, 

either Party may request consultations to develop appropriate measures to ensure the 
12

fulfillment of this Agreement.

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

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

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

Article 10

Annexes

The Annexes form an integral part of this Agreement.

Article 11

Term of Agreement

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

United States that Chile 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.

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

Governments, have signed this Agreement.

Done at Santiago, this 5th day of March, 2014 in duplicate in the English language. A Spanish 

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 CHILE:
13

ANNEX I

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

ACCOUNTS AND ON PAYMENTS TO CERTAIN NONPARTICIPATING FINANCIAL 

INSTITUTIONS

I. General.

A. Reporting Chilean Financial Institutions must identify U.S. Accounts and 

accounts held by Nonparticipating Financial Institutions in accordance with the due 

diligence procedures contained in this Annex I.

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 in the case of a Cash 

Value Insurance Contract or an Annuity Contract, as of the last day of the 

calendar year or the most recent contract anniversary date.

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

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

pursuant to the due diligence procedures in this Annex I.

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

must 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, 

Reporting Chilean Financial Institutions may rely on the procedures described in relevant 

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

account held by a Nonparticipating Financial Institution, except that if an account is 

treated as held by a recalcitrant account holder under procedures described in relevant 

U.S. Treasury Regulations, such account shall be treated as a U.S. Account for purposes 

of this Agreement. Reporting Chilean Financial Institutions may 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). Except 

as otherwise provided in an FFI Agreement, once a Reporting Chilean Financial 

Institution has chosen to rely on the procedures in relevant U.S. Treasury Regulations 

with respect to any group of accounts, such Reporting Chilean Financial Institution must 

continue to apply such procedures consistently in all subsequent years, unless there has 

been a material modification to relevant U.S. Treasury Regulations. 

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

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

(“Preexisting Individual Accounts”).

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the 
14

Reporting Chilean Financial Institution elects otherwise, either with respect to all 

Preexisting Individual Accounts or, separately, with respect to any clearly identified 

group of such accounts, the following Preexisting Individual Accounts are not required to 

be reviewed, identified, or reported as U.S. 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 Chile 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 Chile requires 

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

Chile).

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 Chilean Financial Institution 

must review electronically searchable data maintained by the Reporting Chilean 

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

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

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

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

office box);

d) Current U.S. telephone number;

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

the United States;

f) Currently effective power of attorney or signatory authority 

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

g) An “in-care-of” or “hold mail” address that is the sole address the 

Reporting Chilean 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” 
15

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 Chilean Financial Institution must treat the account as a U.S. 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 Chilean Financial Institution is not required to treat an 

account as a U.S. Account if:

a) Where the Account Holder information unambiguously indicates a 

U.S. place of birth, the Reporting Chilean Financial Institution obtains, or 

has previously reviewed and maintains a record of:

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

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

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

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

identification evidencing the Account Holder’s citizenship or 

nationality in a country other than the United States; and

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

Nationality of the United States or a reasonable explanation of: 

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

certificate despite relinquishing U.S. citizenship; or

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

citizenship at birth.

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

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

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

Reporting Chilean 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 
16

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

c) Where the Account Holder information contains standing 

instructions to transfer funds to an account maintained in the United 

States, the Reporting Chilean Financial Institution obtains, or has 

previously reviewed and maintains a record of:

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

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

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

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

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

d) Where the Account Holder information contains a currently 

effective power of attorney or signatory authority granted to a person 

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

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

more U.S. telephone numbers (if a non-U.S. telephone number is also 

associated with the account), the Reporting Chilean Financial Institution 

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

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

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

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

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

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

C. Additional Procedures Applicable to Preexisting Individual Accounts That 

Are Lower Value Accounts.

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 Chilean Financial Institution must treat the account as 

a U.S. 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. 

Account under this section shall be treated as a U.S. 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”).
17

1. Electronic Record Search. The Reporting Chilean Financial Institution 

must review electronically searchable data maintained by the Reporting Chilean 

Financial Institution for any of the U.S. indicia described in subparagraph B(1) of 

this section.

2. Paper Record Search. If the Reporting Chilean 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 Chilean 

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 Chilean Financial 

Institution within the last five years for any of the U.S. indicia described in 

subparagraph B(1) of this section:

a) The most recent documentary evidence collected with respect to 

the account;

b) The most recent account opening contract or documentation;

c) The most recent documentation obtained by the Reporting Chilean 

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 Chilean Financial Institution is not required to perform the paper 

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

Chilean 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 Chilean Financial Institution;

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

any, with the Reporting Chilean 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 Chilean Financial Institution or another Financial 

Institution);
18

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 Chilean 

Financial Institution must treat as a U.S. Account any High Value Account 

assigned to a relationship manager (including any Financial Accounts aggregated 

with such High Value Account) if the relationship manager has actual knowledge 

that the Account Holder is a Specified U.S. Person.

5. Effect of Finding U.S. Indicia.

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

section are discovered in the enhanced review of High Value Accounts 

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

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

required until there is a change in circumstances that results in one or 

more U.S. indicia being associated with the account.

b) If any of the U.S. indicia listed in subparagraph B(1) of this 

section are discovered in the enhanced review of High Value Accounts 

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

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

the Reporting Chilean Financial Institution must treat the account as a 

U.S. 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. Account under this section shall be treated as a U.S. 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 Chilean 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. Account on or before December 31, 2014, the Reporting Chilean 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. Account after December 31, 2014 and on 

or before June 30, 2015, the Reporting Chilean 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 
19

30, 2014, but becomes a High Value Account as of the last day of 2015 or any 

subsequent calendar year, the Reporting Chilean 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. Account, the Reporting Chilean 

Financial Institution must report the required information about such account with 

respect to the year in which it is identified as a U.S. Account and subsequent 

years on an annual basis, unless the Account Holder ceases to be a Specified U.S. 

Person.

3. Once a Reporting Chilean Financial Institution applies the enhanced 

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

Account, the Reporting Chilean 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 Chilean Financial 

Institution must treat the account as a U.S. 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 Chilean 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 Chilean 

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 Chilean 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. 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 Chilean Financial Institution elects otherwise, either with respect to all New 

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

accounts, the following New Individual Accounts are not required to be reviewed, 
20

identified, or reported as U.S. Accounts:

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

end of any calendar year. 

2. A Cash Value Insurance Contract unless the cash value exceeds $50,000 at 

the end of any calendar year. 

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 Chilean Financial Institution must obtain a selfcertification, which may be part of the account opening documentation, that allows the 

Reporting Chilean 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 Chilean 

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 Chilean Financial Institution 

must treat the account as a U.S. 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 Chilean Financial Institution to know, or have 

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

Reporting Chilean Financial Institution cannot rely on the original selfcertification and must obtain a valid self-certification that establishes whether the 

Account Holder is a U.S. citizen or resident for U.S. tax purposes. If the 

Reporting Chilean Financial Institution is unable to obtain a valid selfcertification, the Reporting Chilean Financial Institution must treat the account as 

a Non-Consenting U.S. Account.

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

identifying U.S. 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 Chilean Financial Institution elects otherwise, either with respect to 

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

of such accounts, 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. 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 
21

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

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

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

in paragraph D of this section. 

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

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

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

NFFEs with one or more Controlling Persons who are U.S. citizens or residents, shall be 

treated as U.S. Accounts. In addition, accounts held by Nonparticipating Financial 

Institutions shall be treated as accounts for which aggregate payments are required to be 

reported under an FFI Agreement.

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 Chilean 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 Chilean Financial Institution must treat the account 

as a U.S. 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 Chilean 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. Account. 

3. Determine Whether a Financial Institution Is a Nonparticipating 

Financial Institution Payments to Which Are Subject to Aggregate Reporting 
22

Consistent with the Requirements of an FFI Agreement.

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

Chilean Financial Institution may determine that the Account Holder is a 

Chilean Financial Institution or other Partner Jurisdiction Financial 

Institution if the Reporting Chilean 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 Chilean 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 Chilean 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. 

Account, but payments to the Account Holder must be reported consistent 

with the requirements of an FFI Agreement.

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

other Partner Jurisdiction Financial Institution, then the Reporting Chilean 

Financial Institution must treat the Account Holder as a Nonparticipating 

Financial Institution payments to which are reportable consistent with the 

requirements of an FFI Agreement, unless the Reporting Chilean 

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. 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 Chilean 

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 Chilean Financial Institution must 

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

the order most appropriate under the circumstances.

a) For purposes of determining the Controlling Persons of an 

Account Holder, a Reporting Chilean 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 Chilean Financial Institution must obtain a 
23

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 

Chilean 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. Account.

E. Timing of Review and Additional Procedures Applicable to Preexisting 

Entity Accounts.

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

that exceeds $250,000 as of June 30, 2014 must be completed by June 30, 2016.

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

that does not exceed $250,000 as of June 30, 2014, but exceeds $1,000,000 as of 

December 31 of 2015 or any subsequent year, must be completed within six 

months after the last day of the calendar year in which the account balance or 

value exceeds $1,000,000.

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

Account that causes the Reporting Chilean 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 Chilean 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. 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 Chilean Financial Institution elects otherwise, either with respect to 

all New Entity Accounts or, separately, with respect to any clearly identified group of 
24

such accounts, 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 Chilean 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 Chilean Financial Institution must 

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

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 Chilean 

Financial Institution may determine that the Account Holder is an Active NFFE, a 

Chilean Financial Institution, or other Partner Jurisdiction Financial Institution if 

the Reporting Chilean 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 Chilean Financial Institution, as applicable. 

2. If the Account Holder is a Chilean 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. Account, but payments to the 

Account Holder must be reported consistent with the requirements of an FFI 

Agreement.

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

self-certification from the Account Holder to establish the Account Holder’s 

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

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

Chilean Financial Institution must treat the account as a U.S. Account.

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

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 Chilean Financial Institution must treat the 

account as a U.S. Account.

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

U.S. Person; (ii) subject to subparagraph B(3)(d) of this section, a Chilean 

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. Account, and no reporting is required with respect to the account.
25

d) If the Account Holder is a Nonparticipating Financial Institution 

(including a Chilean 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. Account, but payments to the 

Account Holder must be reported consistent with the requirements of an 

FFI 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 

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

evidence if the Reporting Chilean 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 Chilean Financial Institution pursuant to 

the anti-money laundering or similar requirements of Chile to which such 

Reporting Chilean Financial Institution is subject.

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

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

subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity that is 

established in Chile 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. 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;
26

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 NFFE 

shall not qualify for this status if the NFFE functions (or holds itself out) 

as an investment fund, such as a private equity fund, venture capital fund, 

leveraged buyout fund, or any investment vehicle whose purpose is to 

acquire or fund companies and then hold interests in those companies as 

capital assets for investment purposes;

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

history, but is investing capital into assets with the intent to operate a 

business other than that of a Financial Institution, provided that the NFFE 

shall not qualify for this exception after the date that is 24 months after the 

date of the initial organization of the NFFE;

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

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

intent to continue or recommence operations in a business other than that 

of a Financial Institution;

h) The NFFE primarily engages in financing and hedging 

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

Institutions, and does not provide financing or hedging services to any 

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

Related Entities 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 
27

organization operated exclusively for the promotion of social 

welfare;

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

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

beneficial interest in its income or assets;

iv. The applicable laws of the NFFE’s jurisdiction of residence or the 

NFFE’s formation documents do not permit any income or assets

of the NFFE to be distributed to, or applied for the benefit of, a 

private person or non-charitable Entity other than pursuant to the 

conduct of the NFFE’s charitable activities, or as payment of 

reasonable compensation for services rendered, or as payment 

representing the fair market value of property which the NFFE has 

purchased; and

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

or the NFFE’s formation documents require that, upon the NFFE’s 

liquidation or dissolution, all of its assets be distributed to a 

governmental entity or other non-profit organization, or escheat to 

the government of the NFFE’s jurisdiction of residence or any 

political subdivision thereof.

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

maintained by a Reporting Chilean 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 Chilean Financial Institution is required to aggregate all Financial 

Accounts maintained by the Reporting Chilean Financial Institution, or by a 

Related Entity, but only to the extent that the Reporting Chilean 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 

Chilean Financial Institution is required to take into account all Financial 

Accounts that are maintained by the Reporting Chilean Financial Institution, or 

by a Related Entity, but only to the extent that the Reporting Chilean 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.
28

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 Chilean 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 Chilean Financial Institution must convert the U.S. dollar threshold 

amounts described in this Annex I into such currency using a published spot rate 

determined as of the last day of the calendar year preceding the year in which the 

Reporting Chilean 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 antimoney laundering rules that have been approved by the IRS in connection with a 

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

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

attachment to the QI agreement for identifying individuals or Entities.

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

U.S. Securities and Exchange Commission report.

E. Alternative Procedures for Financial Accounts Held by Individual Beneficiaries of a 

Cash Value Insurance Contract. A Reporting Chilean 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. Account unless the Reporting Chilean Financial 

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

U.S. Person. A Reporting Chilean Financial Institution has reason to know that a 

beneficiary of a Cash Value Insurance Contract is a Specified U.S. Person if the 
29

information collected by the Reporting Chilean 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 Chilean Financial Institution has actual knowledge, or 

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

Financial Institution must follow the procedures in subparagraph B(3) of section II of 

this Annex I.

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

C of section I of this Annex I, Reporting Chilean Financial Institutions may rely on due 

diligence procedures performed by third parties, to the extent provided in an FFI 

Agreement and relevant U.S. Treasury Regulations.
30

Annex II

The following Entities shall be treated as exempt beneficial owners or deemedcompliant FFIs, as the case may be, and the following accounts are excluded from 

the definition of Financial Accounts.

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

the Competent Authorities of Chile 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 3 of Article 4 of the Agreement.]

I. Exempt Beneficial Owners other than Funds. The following Entities shall 

be treated as Non-Reporting Chilean 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 Chile, any political subdivision 

of Chile (which, for the avoidance of doubt, includes a state, province, 

county, or municipality), or any wholly owned agency or instrumentality of 

Chile or any one or more of the foregoing (each, a “Chile Governmental 

Entity”). This category is comprised of the integral parts, controlled 

entities, and political subdivisions of Chile. 

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

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

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

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

accounts of Chile, 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. 
31

2. A controlled entity means an Entity that is separate in form from Chile or 

that otherwise constitutes a separate juridical entity, provided that:

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

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 Chile Governmental Entities, with no portion 

of its income inuring to the benefit of any private person; and 

c) The Entity’s assets vest in one or more Chile Governmental Entities 

upon dissolution. 

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

are the intended beneficiaries of a governmental program, and the 

program activities are performed for the general public with respect to 

the common welfare or relate to the administration of some phase of 

government. Notwithstanding the foregoing, however, income is 

considered to inure to the benefit of private persons if the income is 

derived from the use of a governmental entity to conduct a commercial 

business, such as a commercial banking business, that provides financial 

services to private persons.

B. International Organization. Any international organization or wholly 

owned agency or instrumentality thereof. This category includes any 

intergovernmental organization (including a supranational organization) (1) 

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

headquarters agreement with Chile; 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 Chile itself, issuing 

instruments intended to circulate as currency. Such an institution may 

include an instrumentality that is separate from the government of Chile, 

whether or not owned in whole or in part by Chile.

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

shall be treated as Non-Reporting Chilean Financial Institutions and as exempt 

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

Revenue Code.
32

A. Treaty-Qualified Retirement Fund. A fund established in Chile, provided 

that the fund is entitled to benefits under an income tax treaty between Chile 

and the United States on income that it derives from sources within the 

United States (or would be entitled to such benefits if it derived any such 

income) as a resident of Chile that satisfies any applicable limitation on 

benefits requirement, and is operated principally to administer or provide 

pension or retirement benefits, including any pension scheme or fund 

administrated by the Instituto de Previsión Social and the social security 

system created by Decree Law 3500 (D.L. 3500). 

B. Broad Participation Retirement Fund. A fund established in Chile 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 Chile; 

and 

3. Satisfies at least one of the following requirements: 

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

under the laws of Chile due to its status as a retirement or pension 

plan; 

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

than transfers of assets from other plans described in paragraphs A 

through D of this section or from retirement and pension accounts 

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

the sponsoring employers; 

c) Distributions or withdrawals from the fund are allowed only upon the 

occurrence of specified events related to retirement, disability, or 

death (except rollover distributions to other retirement funds 

described in paragraphs A through D of this section or retirement and 

pension accounts described in subparagraph A(1) of section V of this 

Annex II), or penalties apply to distributions or withdrawals made 

before such specified events; or
33

d) Contributions (other than certain permitted make-up contributions) by 

employees to the fund are limited by reference to earned income of 

the employee or may not exceed $50,000 annually, applying the rules 

set forth in Annex I for account aggregation and currency translation.

C. Narrow Participation Retirement Fund. A fund established in Chile 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 Chile 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 Chile.

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

Chile by an exempt beneficial owner to provide retirement, disability, or 

death benefits to beneficiaries or participants that are current or former 

employees of the exempt beneficial owner (or persons designated by such 

employees), or that are not current or former employees, if the benefits 

provided to such beneficiaries or participants are in consideration of 

personal services performed for the exempt beneficial owner.

E. Investment Entity Wholly Owned by Exempt Beneficial Owners. An 

Entity that is a Chilean 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 
34

interest in such Entity is either a Depository Institution (with respect to a 

loan made to such Entity) or an exempt beneficial owner.

F. The Fondo de Cesantia y Administradora de Fondos de Cesantia (Chilean 

Unemployment Fund and Unemployment Fund Manager) created by 

Law N° 19,728. The Chilean Unemployment Fund and Unemployment 

Fund Manager, provided that all contributions to the fund meet the 

requirements set forth in subparagraphs (A)(2)(a) through (d) of Section V, 

substituting “fund” for “account” in each place it appears.

III. Small or Limited Scope Financial Institutions that Qualify as DeemedCompliant FFIs. The following Financial Institutions are Non-Reporting 

Chilean Financial Institutions that shall be treated as registered deemedcompliant FFIs or certified deemed-compliant FFIs, as the case may be, for 

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

A. Registered Financial Institution with a Local Client Base. A Financial 

Institution satisfying the following requirements is a Non-Reporting Chilean 

Financial Institution treated as a registered deemed-compliant FFI for 

purposes of section 1471 of the U.S. Internal Revenue Code:

1. The Financial Institution must be licensed and regulated as a financial 

institution under the laws of Chile; 

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

Chile. 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 Chile. For this purpose, a Financial Institution shall not be 

considered to have solicited customers or Account Holders outside Chile 

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 Chile 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; 
35

4. The Financial Institution must be required under the laws of Chile 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 Chile’s AML due diligence 

requirements; 

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

Financial Institution as of the last day of the preceding calendar year 

must be held by residents (including residents that are Entities) of Chile; 

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 Chile (including a U.S. 

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

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

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

who are not residents of Chile; 

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 Chile or by a 

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

citizens who are not residents of Chile is identified, the Financial 

Institution must report such Financial Account as would be required if 

the Financial Institution were a Reporting Chilean Financial Institution 

or close such Financial Account;

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

resident of Chile 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. 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 Chilean Financial Institution or 

close such Financial Account;

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

Institution must be incorporated or organized in Chile and, with the 

exception of any Related Entity that is a retirement fund described in 
36

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

requirements set forth in this paragraph A; 

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 Chile; and

11.The Financial Institution must satisfy the requirements set forth in 

paragraph C of section VI of this Annex II.

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

is a Non-Reporting Chilean Financial Institution treated as a certified 

deemed-compliant FFI for purposes of section 1471 of the U.S. Internal 

Revenue Code:

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

under the laws of Chile as) (a) a bank or (b) a credit union or similar 

cooperative credit organization that is operated without profit;

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

deposits from and making loans to, with respect to a bank, unrelated 

retail customers and, with respect to a credit union or similar cooperative 

credit organization, members, provided that no member has a greater 

than five percent interest in such credit union or cooperative credit 

organization;

3. The Financial Institution satisfies the requirements set forth in 

subparagraphs A(2) and A(3) of this section, provided that, in addition to 

the limitations on the website described in subparagraph A(3) of this 

section, the website does not permit the opening of a Financial Account;

4. The Financial Institution does not have more than $175 million in assets 

on its balance sheet, and the Financial Institution and any Related 

Entities, taken together, do not have more than $500 million in total 

assets on their consolidated or combined balance sheets; and

5. Any Related Entity must be incorporated or organized in Chile, 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. 
37

C. Financial Institution with Only Low-Value Accounts. A Chilean 

Financial Institution satisfying the following requirements is a NonReporting Chilean Financial Institution treated as a certified deemedcompliant FFI for purposes of section 1471 of the U.S. Internal Revenue 

Code:

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. Registered Qualified Credit Card Issuer. A Chilean Financial Institution 

satisfying the following requirements is a Non-Reporting Chilean Financial 

Institution treated as a registered deemed-compliant FFI for purposes of 

section 1471 of the U.S. Internal Revenue Code:

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; 

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

implements policies and procedures to either prevent a customer deposit 

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

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

aggregation and currency translation, is refunded to the customer within 

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

balances to the extent of disputed charges but does include credit 

balances resulting from merchandise returns; and

3. The Financial Institution must satisfy the requirements set forth in 

paragraph C of section VI of this Annex II.

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 Chilean Financial Institutions that shall be 
38

treated as registered deemed-compliant FFIs or certified deemed-compliant 

FFIs, as the case may be, 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. Registered 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 is a Non-Reporting 

Chilean Financial Institution treated as a registered deemed-compliant FFI 

for purposes of section 1471 of the U.S. Internal Revenue Code. 

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

Investment Entity established in Chile 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 Chile that is not a qualified intermediary, withholding 

foreign partnership, or withholding foreign trust pursuant to relevant 

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

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

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

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

Institution shares a common electronic account system with the 

sponsoring entity that enables the sponsoring entity to identify all 

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

account and customer information maintained by the Financial 

Institution including, but not limited to, customer identification 

information, customer documentation, account balance, and all payments 

made to the Account Holder or payee. 

3. The sponsoring entity complies with the following requirements: 

 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.
39

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 the requirements of an FFI Agreement; 

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

IRS on the IRS FATCA registration website; 

c) Prior to December 31, 2015, the sponsoring entity has registered the 

Financial Institution with the IRS pursuant to the registration 

requirements set forth in paragraph C of section VI of this Annex II; 

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

Institution, all due diligence, withholding, reporting, and other 

requirements (including the requirements set forth in paragraph C of 

section VI of this Annex II) that the Financial Institution would have 

been required to perform if it were a Reporting Chilean Financial 

Institution; 

e) The sponsoring entity identifies the Financial Institution and includes 

the Financial Institution’s Global Intermediary Identification Number 

(or GIIN) in all reporting completed on the Financial Institution’s 

behalf; and 

f) The sponsoring entity has not had its status as a sponsor revoked. 

The IRS may revoke a sponsoring entity’s status as a sponsor with 

respect to all sponsored Financial Institutions if there is a material 

failure by the sponsoring entity to comply with its obligations 

described above with respect to any sponsored Financial Institution.

B. Sponsored, Closely Held Investment Vehicle. A Chilean Financial 

Institution satisfying the following requirements is a Non-Reporting Chilean 

Financial Institution treated as a certified deemed-compliant FFI for 

purposes of section 1471 of the U.S. Internal Revenue Code:

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 
40

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 Chilean Financial Institution;

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

for unrelated parties; 

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

Interests in the Financial Institution (disregarding debt interests owned 

by Participating FFIs and deemed-compliant FFIs and Equity Interests 

owned by an Entity if that Entity owns 100 percent of the Equity 

Interests in the Financial Institution and is itself a sponsored Financial 

Institution described in this paragraph C); and

5. The sponsoring entity complies with the following requirements: 

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

IRS on the 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 Chilean 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. 

The IRS may revoke a sponsoring entity’s status as a sponsor with 

respect to all sponsored Financial Institutions if there is a material 

failure by the sponsoring entity to comply with its obligations 

described above with respect to any sponsored Financial Institution. 

C. Investment Advisors and Investment Managers. An Investment Entity 

established in Chile 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. Such an Investment Entity is a Non-Reporting Chilean Financial 
41

Institution treated as a certified deemed-compliant FFI for purposes of 

section 1471 of the U.S. Internal Revenue Code.

D. Collective Investment Vehicle. An Investment Entity established in Chile 

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, and the 

Investment Entity satisfies the requirements set forth in paragraph C of 

section VI of this Annex II. Such an Investment Entity is a Non-Reporting 

Chilean Financial Institution treated as a registered deemed-compliant FFI 

for purposes of section 1471 of the U.S. Internal Revenue Code.

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

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

investment vehicle described in paragraph E of this section, the reporting 

obligations of any Investment Entity (other than a Financial Institution 

through which interests in the collective investment vehicle are held) 

shall be deemed fulfilled.

2. With respect to interests in: 

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

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

which (including debt interests in excess of $50,000) are held by or 

through one or more exempt beneficial owners, Active NFFEs 

described in subparagraph B(4) of section VI of Annex I, U.S. 

Persons that are not Specified U.S. Persons, or Financial Institutions 

that are not Nonparticipating Financial Institutions; or

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

under relevant U.S. Treasury Regulations; 

the reporting obligations of any Investment Entity that is a Chilean 

Financial Institution (other than a Financial Institution through which 

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

fulfilled.
42

3. With respect to interests in an Investment Entity established in Chile that 

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

consistent with paragraph 4 of Article 4 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 

first-mentioned Investment Entity pursuant to the Agreement with 

respect to such interests is reported by such Investment Entity or another 

person.

V. Accounts Excluded from Financial Accounts. The following accounts are 

excluded from the definition of Financial Accounts and therefore shall not be 

treated as U.S. Accounts.

A. Certain Savings Accounts.

1. Retirement and Pension Account. A retirement or pension account 

maintained in Chile that satisfies the following requirements under the 

laws of Chile.

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 Chile 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 

Chile 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. 
43

2. Non-Retirement Savings Accounts. An account maintained in Chile 

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

requirements under the laws of Chile.

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 Chile are 

deductible or excluded from the gross income of the account holder or 

taxed at a reduced rate, or taxation of investment income from the 

account is deferred or taxed at a reduced rate);

c) Withdrawals are conditioned on meeting specific criteria related to 

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

educational or medical benefits), or penalties apply to withdrawals 

made before such criteria are met; and

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

set forth in Annex I for account aggregation and currency translation.

B. Certain Term Life Insurance Contracts. A life insurance contract 

maintained in Chile 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.
44

C. Account Held by an Estate. An account maintained in Chile 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 Chile established in 

connection with any of the following: 

1. A court order or judgment.

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

account satisfies the following requirements:

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

deposit in an amount appropriate to secure an obligation directly 

related to the transaction, or a similar payment, or is funded with a 

financial asset that is deposited in the account in connection with the 

sale, exchange, or lease of the property; 

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

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

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

damages relating to the leased property as agreed under the lease;

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

be paid or otherwise distributed for the benefit of the purchaser, 

seller, lessor, or lessee (including to satisfy such person’s obligation) 

when the property is sold, exchanged, or surrendered, or the lease 

terminates;

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

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

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

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

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

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

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

taxes at a later time.

E. Partner Jurisdiction Accounts. An account maintained in Chile and 

excluded from the definition of Financial Account under an agreement 
45

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 and Other Special Rules. The following additional definitions 

and special rules shall apply to the descriptions above:

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

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

thereof agrees to obtain and exchange information pursuant to a Model 1 

IGA, other than a Financial Institution treated as a Nonparticipating 

Financial Institution under the Model 1 IGA. For purposes of this 

definition, the term Model 1 IGA means an arrangement between the United 

States or the Treasury Department and a non-U.S. government or one or 

more agencies thereof to implement FATCA through reporting by Financial 

Institutions to such non-U.S. government or agency thereof, followed by 

automatic exchange of such reported information with the IRS. 

B. Participating FFI. The term Participating FFI means a Financial 

Institution that has agreed to comply with the requirements of an FFI 

Agreement, including a Financial Institution described in a Model 2 IGA 

that has agreed to comply with the requirements of an FFI Agreement. The 

term Participating FFI also includes a qualified intermediary branch of a 

Reporting U.S. Financial Institution, unless such branch is a Reporting 

Model 1 FFI. For purposes of this definition, the term FFI Agreement 

means where relevant, an FFI Agreement as defined in Article 1 of the 

Agreement as well as an agreement that sets forth the requirements for a 

Financial Institution to be treated as complying with the requirements of 

section 1471(b) of the U.S. Internal Revenue Code. In addition, for 

purposes of this definition, the term Model 2 IGA means an arrangement 

between the United States or the Treasury Department and a non-U.S. 

government or one or more agencies thereof to facilitate the implementation 

of FATCA through reporting by Financial Institutions directly to the IRS in 

accordance with the requirements of an FFI Agreement, supplemented by 

the exchange of information between such non-U.S. government or agency 

thereof and the IRS. 

C. Registration Requirements for a Financial Institution that Qualifies as 

a Registered Deemed-Compliant FFI. A Financial Institution that 
46

qualifies as a registered deemed-compliant FFI must satisfy the following 

requirements:

1. Register on the IRS FATCA registration website with the IRS pursuant 

to procedures prescribed by the IRS and agree to comply with the terms 

of its registered deemed-compliant status;

2. Have its responsible officer certify every three years to the IRS, either 

individually or collectively for such Financial Institution and its Related 

Entities, that all of the requirements for the deemed-compliant category 

claimed by the Financial Institution have been satisfied since July 1, 

2014;

3. Maintain in its records the confirmation from the IRS of the Financial 

Institution’s registration as a deemed-compliant FFI and the Financial 

Institution’s Global Intermediary Identification Number (or GIIN) or 

such other information as the IRS specifies in forms or other guidance; 

and

4. Agree to notify the IRS if there is a change in circumstances that would 

make the Financial Institution ineligible for the deemed-compliant status 

for which it has registered, and to do so with six months of the change in 

circumstances unless the Financial Institution is able to resume its 

eligibility for its registered deemed-compliant status within the sixmonth notification period.