Use of nominees to circumvent CRS/FATCA reporting?

[CanadaOffshore93]

Hey everyone,

After studying AEOI (FATCA and CRS), I've started wondering about the use of nominess to circumvent CRS/FATCA reporting.

I am sure that both regimes contain elements dealing with the use of nominess, but I am not convinced that the use of nominess to avoid CRS reporting can be completely curtailed. How much investigation is the bank expected to conduct? Banks aren't investigatory bodies, there must be a point where it just isn't feasible for them to go any farther.

What does everyone think? It would be cool if this thread could create a robust discussion on this topic.

 

[Sols]

Not without breaking the law.

The nominees must present you as the UBO, and reporting is then done to the UBO's jurisdiction(s) of residence. Failure to disclose the UBO is a criminal act, entering the territories of money laundering and fraud. That's a path you don't want to find yourself going down.

 

[CyprusLaw]

Hey everyone,

After studying AEOI (FATCA and CRS), I've started wondering about the use of nominess to circumvent CRS/FATCA reporting.

I am sure that both regimes contain elements dealing with the use of nominess, but I am not convinced that the use of nominess to avoid CRS reporting can be completely curtailed. How much investigation is the bank expected to conduct? Banks aren't investigatory bodies, there must be a point where it just isn't feasible for them to go any farther.

What does everyone think? It would be cool if this thread could create a robust discussion on this topic.

As @Sols very rightly so pointed out the nominees are obligated by the EU AML Directive and consequently by local EU laws to disclose the UBOs of all companies they are acting as nominee shareholders for (subject to very minor exceptions) - in this respect failing to do so does have criminal implications.

On another note and separately from this, no EU bank will open an account unless they are satisfied that they have full KYC on the actual UBO. So in short - the point where the bank stops asking about the UBO is when they decide that since you are not making full disclosure they are not onboarding you.

 

[CaptK]

You must declare if you are the UBO of a company there is nothing against the law by using a nominee. The onus is on you to declare.