Avoid common CRS & FATCA reporting errors: a checklist for financial institutions
Reporting requirements under the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) are complex and ever-evolving. Even minor mistakes in data handling, due diligence, or submission formatting can lead to validation failures, regulatory scrutiny, or penalties.
This checklist highlights the most frequent errors seen in CRS and FATCA reporting and explains how financial institutions can prevent them, from onboarding and due diligence through to submission and corrections.
1. Register too late for a GIIN
Financial institutions should register for a Global Intermediary Identification Number (GIIN) well before reporting deadlines. Waiting until late in the cycle can result in outdated GIIN lists and validation problems during submission.
2. Relying solely on FATCA GIINs for self-certification
Relying only on a FATCA GIIN to validate whether an entity is reportable is insufficient. Institutions must conduct thorough due diligence when opening new accounts, including verifying tax residency and collecting all necessary documentation.
3. Incorrect or missing TINs and identifiers
Reports with dummy or missing Tax Identification Numbers (TINs), dates of birth, or other key identifiers often fail validation checks. Financial institutions must collect and verify accurate TINs for all relevant accounts and maintain updated documentation.
4. Misspellings and formatting errors
Simple issues like misspelled names, incorrect character formatting, or discrepancies with published GIIN records can trigger rejections during the validation process. Pay attention to exact data formatting, spacing, and case sensitivity.
5. Delaying corrections
Many institutions wait until an AEOI portal re-opens to submit corrections, often months after the reporting deadline. Address errors as soon as they are identified to avoid penalties and unnecessary risk.
6. Inaccurate account status
Failing to mark closed or inactive accounts correctly can lead to inaccurate reporting and audit issues. Ensure that accounts closed during the reporting period are appropriately flagged and included in corrections when required.
7. Neglecting updates to account changes
When a financial institution changes its legal name or other key details, associated GIIN accounts and AEOI portal registrations must be updated promptly. Out-of-date information often leads to submission rejections.
8. Failing to stay current with regulatory changes
CRS and FATCA guidance continues to evolve. Institutions that do not monitor updates risk using outdated rules and schemas, leading to non-compliance and potential penalties.
9. Misinterpreting changes
Even when regulatory updates are monitored, incorrect interpretation can introduce compliance gaps. Ensure that internal policy updates are clear, accurate, and implemented across all relevant teams.
10. Conflicting internal data sources
Using inconsistent data from multiple systems increases the risk of discrepancies in reports. Standardise data sources and implement robust monitoring to eliminate conflicts at the point of reporting.
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