The Swiss Federal Tax Administration (“SFTA”) is planning to perform audits in the field of Automatic Exchange of Information (“AEoI”) across Swiss financial institutions.
The SFTA recently commenced a first pilot audit of a bank in the German speaking part of Switzerland. Audits of other Swiss banks and other financial institutions are likely to follow in the further course of 2019 and the coming years. The upcoming audits should act as an encouragement for Swiss financial institutions to review their AEoI compliance programs and fine-tune their processes and systems.
Specifically, areas of AEoI implementation in which Swiss financial institutions continue to face challenges include, from our experience:
- The need to have written policies and procedures in place for AEoI purposes to document the Bank’s approach to AEoI;
- The requirement to ensure that proper controls are in place to manage AEoI risks, and that such controls are properly documented and monitored;
- The requirement to perform a reasonableness check of self-certifications received from clients, and implementing respective control mechanisms;
- The correct treatment of those accounts for which no self-certification can be obtained; and
- The need for ongoing monitoring, including new reportable jurisdictions, related client communications, changes in circumstances and other aspects of AEoI compliance.
In light of the forthcoming AEoI audits, Swiss financial institutions should ensure their AEoI compliance programs are in line with the requirements and that any shortcomings are addressed appropriately.
Further information on this topic can be found here.