FATCA Basics: What Is the IRS FFI List?

For those participating in FATCA, the FATCA regulations and the particular jurisdiction’s Intergovernmental Agreement (IGA) implementing regulations require certain Foreign Financial Institutions (FFIs or FIs) to register in the U.S. Internal Revenue Service (IRS) FATCA portal. An important aspect of registering an FI in the IRS FATCA portal is obtaining a Global Intermediary Identification Number (GIIN). Upon registration approval, the IRS will issue the FI a GIIN and include the registered entity and its GIIN on the published IRS FFI List. The IRS FFI List is updated monthly to add or remove approved entities.

GIIN Inclusion

There is a delay of potentially weeks between an entity registering in the IRS FATCA portal and the entity appearing on the IRS FFI List. The list is static, and the IRS updates it the first of each month. However, the updated list has a cut off period of approximately five days before the end of the previous month.

GIIN Removal

The IRS removes a GIIN from the IRS FFI List when the:

• IRS determines the FI is no longer in approved status due to an error or failure on the FI’s part; or

• The FFI registration is terminated by the FI.

The IRS may reverse the approved status of an FI in such situations as the IRS disagreeing with the FATCA classification selected by the FI in the portal or the FI’s failure to timely submit the Certification of Preexisting Account (COPA) or Periodic Certifications. When the IRS removes the FI from approved status and the IRS FFI List, counterparties consider the FI to be a Non-Participating FI (NPFI or NPFFI). The costly outcome is that these FIs are subject to FATCA withholding.

The FI may choose to terminate its registration if the entity is sold, liquidated, or otherwise terminated; or if there is a change in the FI’s business model resulting in a different FATCA classification.

Government Sharing

Many foreign jurisdictions cross reference the entities that submitted reporting in the local jurisdiction against the IRS FFI list. If an entity is on the IRS FFI list during year 1 and fails to submit a mandatory nil report for year 1 during reporting season in year 2, the FI might be subject to local jurisdiction penalties. Local tax authorities may also identify those FIs that failed to update an existing registration by reviewing the existing list of registered FIs. The local tax authority may penalize those who do not update their local FATCA registration.

IRS FFI List As a Tool

The IRS FFI List allows the user to search by the FI’s name, GIIN or country/jurisdiction. It can be a useful tool for the FI and for counterparties. If a single Responsible Officer (RO) is assigned across a large number of FIs in the broader organization, the IRS FFI List can help quickly identify which FI is being referenced in an IRS email. The IRS does not identify the FI by name or by full GIIN when it sends an email alerting the RO to check the account message board. The IRS message will state:

You have a new message on your Foreign Account Tax Compliance Act (FATCA) message board. You must log into your FATCA account ending in XYZ to read the message.

It is then necessary to check your internal FI database or the IRS FFI List to determine which entity has a GIIN ending in XYZ. It is important to realize that multiple GIINs can end in the same three letter/number combination.

Counterparties (e.g., other companies requiring you provide a GIIN for such purposes as the FI opening a bank account, investment account, etc.) use the IRS FFI List to validate the GIIN the FI provides. Until the GIIN appears on the IRS FFI List, the counterparty may request a screenshot of the homepage of the FI’s IRS FATCA account. However, the counterparty will follow through on a second validation when the IRS FFI List is issued.

The list can be used on the IRS website or by downloading the current full list. Click to access the IRS FFI List and other useful IRS FFI List information.

To read more about GIINs, click to read my post, FATCA Basics: GIINs.

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