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  • Elizabeth A. McMorrow

FATCA: Mandatory Certification for GIIN Deregistration

The deregistration of an entity from the IRS FATCA portal may be necessary as a result of the sale, liquidation or other termination of an entity. However, simply clicking on “Agreement – Cancel” is not the end of the story. You may be required to submit a Certification of Preexisting Account (COPA) or Periodic Certification within six months of cancellation.

IRS Certifications

Certain entities may register in the IRS FATCA portal and, upon registration approval, receive a Global Intermediary Identification Number (GIIN). For some entities, the FATCA portal registration process involves the entity entering into an FFI Agreement with the IRS.

The FFI Agreement requires that the entity submit to the IRS a COPA and a Periodic Certification.

COPA

Through the COPA, an entity certifies to the IRS that it has timely complied with FATCA due diligence procedures. The following are the specific certifications:

  • Participating Foreign Financial Institution (Including Reporting Model 2 FFIs)

  • Consolidated Compliance Group

  • Registered Deemed-Compliant FFIs – Local FFI

  • Registered Deemed-Compliant FFIs – Restricted Funds

  • Sponsoring Entity of Sponsored FFIs

Periodic Certification

The FATCA Periodic Certification is the vehicle by which an entity certifies to the IRS that it has complied with the terms of the FFI agreement. The following are the specific certifications:

  • Participating Foreign Financial Institution (Including Reporting Model 2 FFIs)

  • Consolidated Compliance Group

  • Registered Deemed-Compliant FFIs – Local FFI

  • Registered Deemed-Compliant FFIs – Nonreporting Member of PFFI

  • Registered Deemed-Compliant FFIs – Qualified Collective Investment Vehicle

  • Registered Deemed-Compliant FFIs – Qualified Credit Card Issuer or Servicer

  • Registered Deemed-Compliant FFIs – Restricted Funds

  • Sponsoring Entity of Sponsored FFI

  • Sponsoring Entity of Sponsored Direct Reporting NFFEs

  • Sponsoring Entity of Sponsored FFI and Sponsored Direct Reporting NFFEs

  • Trustee Documented Trusts

  • Direct Reporting NFFEs

Canceled FFI Agreement Certifications

The first round of COPA and periodic certifications are due to the IRS by December 15, 2018. In future years, the certifications will be due by July 1. The certification timing is based on three-year cycles.

However, if you cancel an FFI Agreement you cannot wait until the three-year cycle has ended. You have only six months from the cancelation date to:

  • complete a COPA if you have not already submitted one; and

  • submit a final periodic certification.

Given the relatively short time frame, It is critical that financial institutions establish internal policies and procedures to facilitate communication regarding the appropriate timing for deregistering an entity in the IRS FATCA portal (and non U.S. FATCA/CRS portal).

This is especially important in the context of asset management restructuring and private equity divestment. In both of these scenarios, there could be a large number of entities which must cancel their FFI Agreements. Submitting late certifications for all of these entities may attract unwanted IRS attention to an otherwise compliant organization.

For assistance, please contact me via my contact page or at elizabeth@elizabethmcmorrowlaw.com.

#ROCertifications #Deregistration #FATCA

Disclaimer: The information on this website is for general informational purposes only. Nothing on this site should be taken as legal advice. The viewing of this website does not constitute an attorney-client relationship. 

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