Brussels, 17/03/2015 (Agence Europe) - To implement the global OECD standard on the automatic exchange of information (AEI) under the revised directive on administrative cooperation, the member states should, if required, consider a phased approach, according to a group of Commission experts set in place in October of last year to make recommendations on the implementation.
Published on 16 March, the report states that in the event that member states are incapable of setting in place the required legislation and guidance within the timeframe decided upon (entry into force in 2016, first exchange in 2017), then the reporting could be postponed by one year, with exchanges to start in 2018 (instead of 2017) for information concerning 2016 and 2017.
As the European Banking Federation (EBF) states in a press release on the report by the Commission experts, the OECD's commentary on the global standard “is not sufficient in terms of guidance and more detailed guidelines are necessary”. The report urges the member states to ensure that the legal framework and guidance required are in place well before 1 January 2016, to help the financial institutions, which will need 18 months to upgrade their systems, to comply.
As regards confidentiality and data protection, the Commission and member states must ensure that all necessary precautions are taken to ensure that the implementation of the revised directive complies with the data protection rules. “Member states should adopt a common approach to develop objective criteria for assessing whether a third country's legal framework provides appropriate protection of the data transferred under automatic exchange of information”, the report states. The member states are also called upon to ensure coherence and a common framework for the list of accounts and entities excluded from the exchange.
Lastly, the EBF stresses that the expert group has recommended a 'soft landing' period of two years for financial institutions located in the EU, to allow the tax administrations and financial institutions to work together to seek a totally operational system. The expert group also notes that the creation of a system from which the developing countries are excluded should be avoided at all costs, because that would bring with it the risk of the emergence of new tax havens, but would also deprive these countries of necessary information. “The stakes are high, as potential loopholes in the global system of AEI could be devastating”, the report stresses. (Elodie Lamer)