Kuwait acts as the Gulf trailblazer for CRS
19 August 2016
Kuwait signs the international CRS agreement.
The OECD has announced that Kuwait is the 83rd signatory to the CRS Multilateral Competent Authority Agreement ("CRS MCAA"). This means that they have committed to the first information exchange in relation to financial accounts maintained by their domestic FIs in 2018.
Whilst this is subject to implementation in local law, it means that Financial Institutions in Kuwait will need to have updated their on-boarding procedures to be able to capture relevant details from account holders with effect from 1 January 2017. They will also need to establish which products they offer will be in scope and plan their remediation review of pre-existing accounts.
When developing their CRS compliance plans, FIs in Kuwait may wish to bear in mind the requirement to provide a “Certificate of Compliance” with their obligations under the Intergovernmental Agreement that country has entered into with the US to implement the Foreign Account Tax Compliance Act (“FATCA”) to the Ministry of Finance by 30 November 2016. However, they should be aware of certain subtle differences between the two regimes.
We anticipate that the other members of the Gulf Co-operation Council (“GCC”) are likely to follow Kuwait’s lead in signing the MCAA. Already, Saudi Arabia, the UAE, Bahrain and Qatar have publicly indicated that they intend to sign the CRS MCAA ready for a “go-live” date of 1 January 2017. FIs in these jurisdictions should therefore also consider their plans as a matter of urgency given that the deadline is less than 20 weeks away.
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