MEMORANDUM OF UNO ERST ANDING 

In connection with the signing today of the Agreement between the Government of the 

United States of America and the Government of Bermuda for Cooperation to Facilitate 

the Implementation of FATCA (hereinafter the "Agreement"), the representatives of 

Bennuda and the United States of America wish to confirm their understanding of the 

following: 

1. For purposes of subparagraph B(4)U)(i) of Section VJ of Annex J of the 

Agreement, an Entity is understood to be "operated in its jurisdiction of 

residence" if it is administered from its jurisdiction of residence. 

2. The United States is committed to discussing concerns raised by Bermuda with 

respect to Bermuda property and casualty insurance companies treated as 

passive NFFEs under relevant U.S. Treasury Regulations and to examining 

potential solutions to those concerns, including through the potential 

modification of existing U.S. Treasury Regulations. 

3. In reference to paragraph 1 of Article 10 (Term of Agreement), the United States 

issued Notice 20I3-43 (the "Notice") on July 12, 2013, which clarifies that: "A 

jurisdiction will be treated as having in effect an IGA [an intergovernmental 

agreement to implement FA TCA] if the jurisdiction is listed on the Treasury 

website as a jurisdiction that is treated as having an IGA in effect. In general, 

Treasury and the IRS intend to include on this list jurisdictions that have signed 

but have not yet brought into force an IGA. Consistent with the Notice, once the 

Agreement is signed, the United States Department of the Treasury intends to 

list Bermuda as having an IGA in effect. 

Upon such listing, Reporting Bermuda Financial Institutions, as that term is 

defined in the Agreement, may register and agree to comply with the terms of an 

FFI Agreement, as that tenn is defined in the Agreement. The United States 

intends to treat a Reporting Bermuda Financial Institution that acts consistently 

with the requirements for Reporting Bermuda Financial Institutions in the 

Agreement (including the requirement to register with the IRS by July I, 2014, 

and comply with the requirements of an FFI Agreement) as complying with, and 

not subject to withholding under section 1471 ofthe U.S. Internal Revenue Code 

during such time as Bennuda is pursuing the necessary internal procedures for 

entry into force of the Agreement. If the Agreement has not entered into force 

prior to March 31 , 2015, and assuming that Bennuda is on the list at that time, 

the United States Department of the Treasury intends to consider removing 

Bermuda from the list of jurisdictions treated as having an IGA in effect. 

If upon consultation with Bennuda, the United States receives credible 

assurances that such a delay is likely to be resolved in a reasonable period of 

time, the United States Department of the Treasury may decide to continue to 

list Bermuda as having an IGA in effect as long as the United States Department 

of the Treasury assesses that Bermuda is likely to be able to send its notification 

under paragraph 1 of Article l 0 by March 31, 20 I 6. It is understood that should 

the Agreement enter into force after March 31 , 2015, any infonnation that would 

have been reported by Reporting Bermuda Financial Institutions or the 
Competent Authority of Bermuda, as those terms are defined under the 

Agreement, thereafter (and prior to the entry' into force of the Agreement) bad 

the Agreement been in force by March 31, 2015, is owed within six months of 

the date of entry into force. 

Signedat~ English Jrngtlage: 

in duplicate, this May~ /w-, 2013, in the 

FOR THE UNITED STATES OF 

AMERICA: 

FOR BERMUDA: