Model 1 IGA Annex II

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Annex II

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

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

Accounts.

1

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

Authorities of [FATCA Partner] and the United States: (1) to include additional Entities and

accounts that present a low risk of being used by U.S. Persons to evade U.S. tax and that have 

similar characteristics to the Entities and accounts described in this Annex II as of the date of 

signature of the Agreement; or (2) to remove Entities and accounts that, due to changes in 

circumstances, no longer present a low risk of being used by U.S. Persons to evade U.S. tax. 

Any such addition or removal shall be effective on the date of signature of the mutual decision, 

unless otherwise provided therein. Procedures for reaching such a mutual decision may be 

included in the mutual agreement or arrangement described in paragraph 6 of Article 3 of the 

Agreement.

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

Non-Reporting [FATCA Partner] 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 [FATCA Partner], any political subdivision 

of [FATCA Partner] (which, for the avoidance of doubt, includes a state, province, 

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

Partner] or any one or more of the foregoing (each, a “[FATCA Partner] Governmental 

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

subdivisions of [FATCA Partner].

 1 [The descriptions in this Annex II are a summary of the final U.S. Treasury Regulations and include the 

modifications to the final regulations to which the United States Treasury is willing to agree. The United States 

Treasury no longer intends to separately list in Annex II to future intergovernmental agreements classes of Entities 

or accounts that are addressed by the descriptions herein. In addition, the United States Treasury no longer 

intends to list non-profit organizations or Entities that are not Financial Institutions. These types of Entities are 

described in subparagraphs B(2) through B(4) of section VI of Annex I. The descriptions in this Annex II reflect 

extensive consultation with financial institutions and governments, and therefore cannot be further modified solely 

to ease or eliminate a specific element of a description (e.g., with respect the requirement that a Financial 

Institution with a local client base has at least 98 percent of its Financial Accounts by value as of the last day of 

the preceding calendar year held by residents (described in paragraph A of section III of this Annex II), the United

States Treasury will not agree to a lower applicable percentage). The United States Treasury is, however, willing 

to discuss the application of this Annex II to Entities or accounts that do not satisfy all the requirements of a 

particular description listed herein. As part of such discussion, FATCA Partner must provide the United States 

Treasury with a specific written description of which requirements are satisfied and which are not satisfied, and 

with respect to the requirements that are not satisfied, must demonstrate the existence of a substitute requirement 

that provides equal assurance that such Entity or account presents a low-risk of tax evasion.] 
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1. An integral part of [FATCA Partner] means any person, organization, agency, bureau, 

fund, instrumentality, or other body, however designated, that constitutes a governing 

authority of [FATCA Partner]. The net earnings of the governing authority must be 

credited to its own account or to other accounts of [FATCA Partner], with no portion 

inuring to the benefit of any private person. An integral part does not include any 

individual who is a sovereign, official, or administrator acting in a private or personal 

capacity. 

2. A controlled entity means an Entity that is separate in form from [FATCA Partner] or 

that otherwise constitutes a separate juridical entity, provided that:

a) The Entity is wholly owned and controlled by one or more [FATCA Partner]

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 [FATCA Partner] 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 [FATCA Partner] 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.

2 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 [FATCA Partner]; 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 [FATCA Partner] itself, issuing instruments 

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

 2 [The activities of a national social security scheme will generally be considered to be performed for the general 

public with respect to the common welfare. The income of a pension fund established to provide retirement 

benefits for employees of the government, however, generally will be considered to inure to a private person, 

although the pension fund may still be treated as an exempt beneficial owner under paragraph D of section II of 

this Annex II.]
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is separate from the government of [FATCA Partner], whether or not owned in whole or 

in part by [FATCA Partner].

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

as Non-Reporting [FATCA Partner] Financial Institutions and as exempt beneficial owners

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

A. [Treaty-Qualified Retirement Fund. A fund established in [FATCA Partner], provided 

that the fund is entitled to benefits under an income tax treaty between [FATCA Partner] 

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 [FATCA 

Partner] that satisfies any applicable limitation on benefits requirement, and is operated 

principally to administer or provide pension or retirement benefits.]

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B. Broad Participation Retirement Fund. A fund established in [FATCA Partner] 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 information reporting to the tax 

authorities in [FATCA Partner]; and 

3. Satisfies at least one of the following requirements:

a) The fund is generally exempt from tax in [FATCA Partner] on investment income 

under the laws of [FATCA Partner] 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

 3 [This paragraph would only be included where FATCA Partner and the United States have in effect an income tax 

treaty with such a provision.]
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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 [FATCA Partner] 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 [FATCA Partner] are not entitled to more than 20 

percent of the fund’s assets; and 

5. The fund is subject to government regulation and provides information reporting to 

the tax authorities in [FATCA Partner].

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

Partner] 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

[FATCA Partner] Financial Institution solely because it is an Investment Entity, provided 

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

and each direct holder of a debt interest in such Entity is either a Depository Institution 

(with respect to a loan made to such Entity) or an exempt beneficial owner.

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

The following Financial Institutions are Non-Reporting [FATCA Partner] Financial 

Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of 

the U.S. Internal Revenue Code.
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A. Financial Institution with a Local Client Base. A Financial Institution satisfying the 

following requirements:

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

under the laws of [FATCA Partner]; 

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

Partner]. 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 

[FATCA Partner]. For this purpose, a Financial Institution shall not be considered to 

have solicited customers or Account Holders outside [FATCA Partner] 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 [FATCA Partner] but is 

also incidentally distributed or aired in other countries, provided that the 

advertisement does not specifically indicate that the Financial Institution provides

Financial Accounts or services to nonresidents, and does not otherwise target or 

solicit U.S. customers or Account Holders;

4. The Financial Institution must be required under the laws of [FATCA Partner] 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 [FATCA Partner]’s AML due diligence requirements;

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

Institution4 must be held by residents (including residents that are Entities) of 

[FATCA Partner] [or a Member State of the European Union];

5

 

6. Beginning on or before the Determination Date, 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 

[FATCA Partner] (including a U.S. Person that was a resident of [FATCA Partner] 

 4 [This test is intended to be an annual test. FATCA Partner may specify, in implementing this requirement, a fixed 

date of the year for purposes of testing whether this requirement is met, as long as that date is used consistently 

from year to year, and may also provide a special rule for entities having no prior history (i.e., start-up entities). 

This also applies for purposes of determining the balance sheet date for the local bank and financial institutions 

with only low-value accounts described below.] 

5 [The bracketed language would only be included where FATCA Partner is a Member State of the European 

Union.]
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when the Financial Account was opened but subsequently ceases to be a resident of 

[FATCA Partner]) or any Passive NFFE with Controlling Persons who are U.S. 

residents or U.S. citizens who are not residents of [FATCA Partner]; 

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 [FATCA Partner] or by a Passive 

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

residents of [FATCA Partner] is identified, the Financial Institution must report such 

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

[FATCA Partner] Financial Institution (including by following the applicable 

registration requirements on the IRS FATCA registration website) or close such 

Financial Account;

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

[FATCA Partner] or by an Entity, the Financial Institution must review those 

Preexisting Accounts in accordance with the procedures set forth in Annex I 

applicable to Preexisting Accounts to identify any U.S. Reportable Account or 

Financial Account held by a Nonparticipating Financial Institution, and must report 

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

Reporting [FATCA Partner] Financial Institution (including by following the 

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

such Financial Account;

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

incorporated or organized in [FATCA Partner] and, with the exception of any 

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

section II of this Annex II, satisfy the requirements set forth in this paragraph A; and 

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

opening or maintaining Financial Accounts for individuals who are Specified U.S.

Persons and residents of [FATCA Partner].

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

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

laws of [FATCA Partner] 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 
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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 [FATCA Partner], and any

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

that is a retirement fund described in paragraphs A through D of section II of this 

Annex II or a Financial Institution with only low-value accounts described in 

paragraph C of this section, must satisfy the requirements set forth in this paragraph 

B. 

C. Financial Institution with Only Low-Value Accounts. A [FATCA Partner] Financial 

Institution satisfying the following requirements:

1. The Financial Institution is not an Investment Entity;

2. No Financial Account maintained by the Financial Institution or any Related Entity

has a balance or value in excess of $50,000, applying the rules set forth in Annex I 

for account aggregation and currency translation; and 

3. The Financial Institution does not have more than $50 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken together, 

do not have more than $50 million in total assets on their consolidated or combined 

balance sheets. 

D. Qualified Credit Card Issuer. A [FATCA Partner] Financial Institution satisfying the 

following requirements:

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

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

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

returned to the customer; and

2. Beginning on or before the Determination Date, 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.
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IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special Rules. 

The Financial Institutions described in paragraphs A through E of this section are NonReporting [FATCA Partner] Financial Institutions that shall be treated as deemed-compliant 

FFIs for purposes of section 1471 of the U.S. Internal Revenue Code. In addition, paragraph 

F of this section provides special rules applicable to an Investment Entity. 

A. Trustee-Documented Trust. A trust established under the laws of [FATCA Partner] to 

the extent that the trustee of the trust is a Reporting U.S. Financial Institution, Reporting 

Model 1 FFI, or Participating FFI and the trustee reports all information required to be 

reported pursuant to the Agreement as would be required if the trust were a Reporting 

[FATCA Partner] Financial Institution (including by following the applicable registration 

requirements on the IRS FATCA registration website).

B. Sponsored Investment Entity and Controlled Foreign Corporation. A Financial 

Institution described in subparagraph B(1) or B(2) of this section having a sponsoring 

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

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

Entity established in [FATCA Partner] 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 corporation6 organized under the laws of 

[FATCA Partner] 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:

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

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

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

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

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

combined voting power of all classes of stock entitled to vote of such foreign corporation.
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a) The sponsoring entity is authorized to act on behalf of the Financial Institution 

(such as a fund manager, trustee, corporate director, or managing partner) to 

fulfill applicable registration requirements on the IRS FATCA registration 

website; 

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

IRS FATCA registration website; 

c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect to 

the Financial Institution, the sponsoring entity registers the Financial Institution

pursuant to applicable registration requirements on the IRS FATCA registration 

website on or before the later of December 31, 2015 and the date that is 90 days 

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

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

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

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

Partner] Financial Institution;

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e) The sponsoring entity identifies the Financial Institution and includes the 

identifying number of the Financial Institution (obtained by following applicable 

registration requirements on the IRS FATCA registration website) in all reporting 

completed on the Financial Institution’s behalf; and 

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

C. Sponsored, Closely Held Investment Vehicle. A [FATCA Partner] Financial Institution

satisfying the following requirements:

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

Entity and is not a qualified intermediary, withholding foreign partnership, or 

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

2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Model 1 

FFI, or Participating FFI, is authorized to act on behalf of the Financial Institution

(such as a professional manager, trustee, or managing partner), and agrees to perform, 

on behalf of the Financial Institution, all due diligence, withholding, reporting, and 

other requirements that the Financial Institution would have been required to perform

if it were a Reporting [FATCA Partner] Financial Institution;

 7 [A sponsoring entity that sponsors both a FATCA Partner Financial Institution and an FFI that is not located in an 

Partner Jurisdiction would perform, with respect to the FATCA Partner Financial Institution, all the due diligence, 

withholding, reporting, and other requirements that the FATCA Partner Financial Institution would have been 

required to perform if it were a Reporting FATCA Partner Financial Institution and, with respect to the other FFI, 

all the due diligence, withholding, reporting, and other requirements that the FFI would have been required to 

perform if it were a participating FFI.]
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3. The Financial Institution does not hold itself out as an investment vehicle for 

unrelated parties;

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

Financial Institution (disregarding debt interests owned by Participating FFIs and 

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

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

Financial Institution described in this paragraph C); and

5. The sponsoring entity complies with the following requirements: 

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

IRS FATCA registration website; 

b) The sponsoring entity agrees to perform, on behalf of the Financial Institution, all

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

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

Partner] Financial Institution and retains documentation collected with respect to 

the Financial Institution for a period of six years; 

c) The sponsoring entity identifies the Financial Institution in all reporting 

completed on the Financial Institution’s behalf; and 

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

D. Investment Advisors and Investment Managers. An Investment Entity established in 

[FATCA Partner] that is a Financial Institution solely because it (1) renders investment 

advice to, and acts on behalf of, or (2) manages portfolios for, and acts on behalf of, a

customer for the purposes of investing, managing, or administering funds deposited in the 

name of the customer with a Financial Institution other than a Nonparticipating Financial 

Institution.

E. Collective Investment Vehicle. An Investment Entity established in [FATCA Partner] 

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

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

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

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

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

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

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

vehicle described in paragraph E of this section, the reporting obligations of any 

Investment Entity (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled.
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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 [FATCA Partner]

Financial Institution (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled.

3. With respect to interests in an Investment Entity established in [FATCA Partner] that 

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

[for Model 1A and Model 1B Non-Reciprocal IGAs: paragraph 3 of Article 5][for 

Model 1B Standalone IGA: paragraph 4 of Article 5] of the Agreement, the reporting 

obligations of all other Investment Entities with respect to such interests shall be 

deemed fulfilled if the information required to be reported by the first-mentioned 

Investment Entity pursuant to the Agreement with respect to such interests is reported 

by such Investment Entity or another person.

4. [An Investment Entity established in [FATCA Partner] that is regulated as a 

collective investment vehicle shall not fail to qualify under paragraph E or 

subparagraph F(2) of this section, or otherwise as a deemed-compliant FFI, solely 

because the collective investment vehicle has issued physical shares in bearer form, 

provided that: 

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

shares in bearer form after December 31, 2012; 

b) The collective investment vehicle retires all such shares upon surrender; 

c) The collective investment vehicle (or a Reporting [FATCA Partner] Financial 

Institution) performs the due diligence procedures set forth in Annex I and reports 

any information required to be reported with respect to any such shares when such 

shares are presented for redemption or other payment; and 

d) The collective investment vehicle has in place policies and procedures to ensure 

that such shares are redeemed or immobilized as soon as possible, and in any 

event prior to January 1, 2017.]

8

 8 [This provision would only be included where FATCA Partner has previously allowed collective investment 

vehicles to issue bearer shares.]
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V. Accounts Excluded from Financial Accounts. The following accounts are excluded from 

the definition of Financial Accounts and therefore shall not be treated as U.S. Reportable 

Accounts.

A. Certain Savings Accounts.

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

[FATCA Partner] that satisfies the following requirements under the laws of [FATCA 

Partner].

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 [FATCA Partner] 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 [FATCA 

Partner] with respect to the account;

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

death, or penalties apply to withdrawals made before such specified events; and

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

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

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

translation. 

2. Non-Retirement Savings Accounts. An account maintained in [FATCA Partner] 

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

requirements under the laws of [FATCA Partner].

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 [FATCA Partner] 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
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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 

[FATCA Partner] with a coverage period that will end before the insured individual 

attains age 90, provided that the contract satisfies the following requirements: 

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

during the period the contract is in existence or until the insured attains age 90, 

whichever is shorter;

2. The contract has no contract value that any person can access (by withdrawal, loan, or 

otherwise) without terminating the contract;

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

the contract cannot exceed the aggregate premiums paid for the contract, less the sum 

of mortality, morbidity, and expense charges (whether or not actually imposed) for 

the period or periods of the contract’s existence and any amounts paid prior to the 

cancellation or termination of the contract; and

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

C. Account Held By an Estate. An account maintained in [FATCA Partner] 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 [FATCA Partner] 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;
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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 [FATCA Partner] and 

excluded from the definition of Financial Account under an agreement between the 

United States and another Partner Jurisdiction to facilitate the implementation of FATCA, 

provided that such account is subject to the same requirements and oversight under the 

laws of such other Partner Jurisdiction as if such account were established in that Partner 

Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in that Partner 

Jurisdiction.

VI. Definitions. The following additional definitions shall apply to the descriptions above:

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

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

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

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

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

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

thereof to implement FATCA through reporting by Financial Institutions to such nonU.S. government or agency thereof, followed by automatic exchange of such reported 

information with the IRS. 

B. Participating FFI. The term Participating FFI means a Financial Institution that has 

agreed to comply with the requirements of an FFI Agreement, including a Financial 

Institution described in a Model 2 IGA that has agreed to comply with the requirements 

of an FFI Agreement. The term Participating FFI also includes a qualified intermediary 

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

1 FFI. For purposes of this definition, the term FFI Agreement means an agreement that 

sets forth the requirements for a Financial Institution to be treated as complying with the 

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

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

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