Why Would an Individual Obtain a GIIN for Herself?
That is actually not a rhetorical question and I don’t know the answer. I came across a peculiar FATCA Expanded Affiliated Group (EAG) recently. I am not going to share the names and countries where the members are located so the individuals are not harassed but this is the composition of the EAG:
What Is a GIIN?
A Global Intermediary Identification Number (GIIN) is the identification number that the IRS assigns to a foreign financial institution (FFI), branch of a financial institution (FI), direct reporting non-financial foreign entity (NFFE), sponsoring entity, sponsored entity, and sponsored subsidiary branch once the entity’s FATCA registration has been approved.
The GIIN serves the purpose of identifying the registered entity to withholding agents and tax administrators for FATCA reporting purposes. It is comprised of 19 characters including period separators. The 14th and 15th characters are abbreviations for the entity type:
LE - a lead FI
SL - a single FI
ME - a member FI
BR - an FI branch
SP - a sponsoring entity
SF - a sponsored entity that is a sponsored fund
SD - a sponsored entity that is a sponsored direct reporting NFFE
SS - a sponsored entity that is a sponsored subsidiary
SB - a sponsored subsidiary’s branch
The 17th through 19th characters are the three number country code of the GIIN holder.
Who Is Required to Obtain a GIIN?
For those participating in FATCA, the FATCA regulations and the Intergovernmental Agreement (IGA) implementing regulations require certain FIs to obtain a GIIN. Other entities can also obtain a GIIN but it is not required.
FATCA Portal Registration
When an entity registers in the IRS FATCA portal, a GIIN will ordinarily be issued the day following online registration.
Once the GIIN is issued, the registered entity will be identified on the published IRS FFI List the next time the list is updated. The IRS FFI List is updated monthly to add or remove approved entities. If the GIIN does not yet appear on the IRS FFI List, counterparties will often accept a screen shot of the entity’s GIIN registration home page.
Back to my initial question, why would a bunch of individuals obtain GIINs? I thought perhaps they were taken advantage of by someone seeking to collect registration fees so I sent a message to the head of the foundation (who I don’t know) over a month ago recommending he speak with his foundation’s lawyer about the GIINs. I never heard back from him and the GIINs are still on the IRS FFI list.
This is an example where a flag should be raised during FATCA due diligence. An individual should not provide a counterparty with an IRS withholding form meant for an entity. A Form W-8BEN is for individuals and does not have a line for a GIIN. It is important to ensure that your staff understands the difference between an IRS Form W-8BEN and the other forms in the W-8 series.