| A. | The following rules and administrative procedures apply to ensure effective implementation of, and compliance with, the reporting and due diligence procedures set out above. |
| (i) | a person enters into any Arrangement or Structure as defined in subparagraph A(1) or (2) of Section XI; and |
| (ii) | the main purpose, or one of the main purposes, of the person in entering into the Arrangement or Structure as defined in subparagraph A(1) or (2) of Section XI is to avoid any obligation under the Common Reporting Standard, |
these Regulations are to have effect as if the Arrangement or Structure as defined in subparagraph A(1) or (2) of Section XI had not been entered into.
| (b) | If a Non-Reporting Financial Institution is no longer a Non-Reporting Financial Institution as it no longer complies with the requirements for a Non-Reporting Financial Institution under paragraph B of Section VIII or Annex II, it becomes a Reportable Financial Institution from the moment that it no longer complies with such requirements. |
| (c) | If an Excluded Account is no longer an Excluded Account as it no longer complies with the requirements for an Excluded Account under subparagraph C(17) of Section VIII or Annex II, it becomes a Reportable Account from the moment that it no longer complies with such requirements. |
| (2) | Sanctions for non-compliance in providing information to a Reporting Financial Institution |
Non-compliance with any obligation under these Regulations includes non-compliance as referred to in section 26(4) of the Act by:
| (a) | a Reportable Person that is an Account Holder, |
| (b) | if the Reportable Person is an entity, any Controlling Person(s) of that entity; or |
from whom a Reporting Financial Institution requires information, a document or thing in order in order to obtain and report the information required under Section I and to comply with any other requirement of these Regulations.
| B. | Suspension or closure of Financial Account for failure to provide a selfcertification |
| (1) | If a self-certification that is to be obtained or is otherwise required under any provision of these Regulations is not provided by an Account Holder or Controlling Person, as the case may be, within 90 days from the date on which it is to be obtained or the date that it is established that a self-certification is required, a Reporting Financial Institution, under its risk management framework in line with the relevant AML/KYC Procedures— |
| (a) | must suspend transactions on the Financial Account until receipt of the self-certification; |
| (b) | if the Account Holder or Controlling Person continues to fail to provide the self-certification, may close the account; or |
| (c) | must report the account under paragraph A of Section I, if an indicium referred to in subparagraphs (B)(2)(a) through (f) of Section III is identified in respect of the Account Holder, the Entity Account, or in respect of the Controlling Person. |
| (2) | For purposes of this subparagraph, “suspension” means steps taken by the Reporting Financial Institution under its risk management framework in line with the relevant AML/KYC Procedures to limit certain transactions and may where applicable result in an increasingly restrictive suspension. |
| (3) | If a self-certification in respect of a Financial Account is outstanding on 31 May 2021, the 90 day period referred to in subparagraph B(1) commences on 1 June 2021. |
