C-3124162-63Elizabeth II2013-2014An Act to implement the Canada–United States Enhanced Tax Information Exchange AgreementCanada–United States Enhanced Tax Information Exchange Agreement Implementation ActCanada–United States Enhanced Tax Information Exchange Agreement Implementation20196

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C-10.5820, s. 992014[Enacted by section 99 of chapter 20 of the Statutes of Canada, 2014, in force on assent June 19, 2014.]

Short title1This Act may be cited as the Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act.

Definition of Agreement2In this Act, Agreement means the Agreement between the Government of Canada and the Government of the United States of America set out in the schedule, as amended from time to time.

Agreement approved3The Agreement is approved and has the force of law in Canada during the period that the Agreement, by its terms, is in force.

Inconsistent laws  —  general rule4(1)Subject to subsection (2), in the event of any inconsistency between the provisions of this Act or the Agreement and the provisions of any other law (other than Part XVIII of the Income Tax Act), the provisions of this Act and the Agreement prevail to the extent of the inconsistency.Inconsistent laws  — exception(2)In the event of any inconsistency between the provisions of the Agreement and the provisions of the Income Tax Conventions Interpretation Act, the provisions of that Act prevail to the extent of the inconsistency.

Regulations5The Minister of National Revenue may make any regulations that are necessary for carrying out the Agreement or for giving effect to any of its provisions.

Entry into force of Agreement*6(1)The Minister of Finance must cause a notice of the day on which the Agreement enters into force to be published in the Canada Gazette within 60 days after that day.Amending instrument(2)The Minister of Finance must cause a notice of the day on which any instrument amending the Agreement enters into force to be published, together with a copy of the instrument, in the Canada Gazette within 60 days after that day.Termination(3)The Minister of Finance must cause a notice of the day on which the Agreement is terminated to be published in the Canada Gazette within 60 days after that day.*[Note: Agreement in force June 27, 2014, see Canada Gazette Part I, Volume 148, page 2234.]

SCHEDULE(Section 2)Agreement Between the Government of Canada and the Government of the United States of America To Improve International Tax Compliance Through Enhanced Exchange of Information Under the Convention Between Canada and the United States of America with Respect to Taxes on Income and on CapitalWHEREAS, THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA (each, a “Party” and together, the “Parties”) have a longstanding and close relationship with respect to mutual assistance in tax matters and desire to conclude an agreement to improve international tax compliance by further building on that relationship;WHEREAS, Article XXVII of the Convention between Canada and the United States of America with Respect to Taxes on Income and on Capital, done at Washington on 26 September 1980, as amended by the Protocols done on 14 June 1983, 28 March 1984, 17 March 1995, 29 July 1997 and 21 September 2007 (the “Convention”) authorizes the exchange of information for tax purposes, including on an automatic basis;WHEREAS, the United States of America enacted provisions commonly known as the Foreign Account Tax Compliance Act (“FATCA”), which introduce a reporting regime for financial institutions with respect to certain accounts;WHEREAS, the Governments of Canada and the United States of America are supportive of applying the underlying policy goal of FATCA on a reciprocal basis to improve tax compliance;WHEREAS, FATCA has raised a number of issues, including that Canadian financial institutions may not be able to comply with certain aspects of FATCA due to domestic legal impediments;WHEREAS, the Government of the United States of America collects information regarding certain accounts maintained by U.S. financial institutions held by residents of Canada and is committed to exchanging such information with the Government of Canada and pursuing equivalent levels of exchange;WHEREAS, the Parties are committed to working together over the longer term towards achieving common reporting and due diligence standards for financial institutions;WHEREAS, the Government of the United States of America acknowledges the need to coordinate the reporting obligations under FATCA with other U.S. tax reporting obligations of Canadian financial institutions to avoid duplicative reporting;WHEREAS, an intergovernmental approach to FATCA implementation would facilitate compliance by Canadian financial institutions while protecting the ability of Canadians to access financial services;WHEREAS, the Parties desire to conclude an agreement to improve international tax compliance and provide for the implementation of FATCA based on domestic reporting and reciprocal automatic exchange pursuant to the Convention and subject to the confidentiality and other protections provided for therein, including the provisions limiting the use of the information exchanged under the Convention;NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:ARTICLE 1Definitions1For purposes of this agreement and any annexes thereto (“Agreement”), the following terms shall have the meanings set forth below:a)The term United States has the same meaning as in the Convention. Any reference to a State of the United States includes the District of Columbia.b)The term U.S. Territory means American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or the U.S. Virgin Islands.c)The term IRS means the U.S. Internal Revenue Service.d)The term Canada has the same meaning as in the Convention.e)The term Partner Jurisdiction means a jurisdiction that has in effect an agreement with the United States to facilitate the implementation of FATCA. The IRS shall publish a list identifying all Partner Jurisdictions.f)The term Competent Authority means:(1)in the case of the United States, the Secretary of the Treasury or the Secretary’s delegate; and(2)in the case of Canada, the Minister of National Revenue or the Minister of National Revenue’s authorized representative.g)The term Financial Institution means a Custodial Institution, a Depository Institution, an Investment Entity, or a Specified Insurance Company.h)The term Custodial Institution means any Entity that holds, as a substantial portion of its business, financial assets for the account of others. An entity holds financial assets for the account of others as a substantial portion of its business if the entity’s gross income attributable to the holding of financial assets and related financial services equals or exceeds 20 percent of the entity’s gross income during the shorter of:(1)the three-year period that ends on December 31 (or the final day of a non-calendar year accounting period) prior to the year in which the determination is being made; or(2)the period during which the entity has been in existence.i)The term Depository Institution means any Entity that accepts deposits in the ordinary course of a banking or similar business.j)The term Investment Entity means any Entity that conducts as a business (or is managed by an entity that conducts as a business) one or more of the following activities or operations for or on behalf of a customer:(1)trading in money market instruments (cheques, bills, certificates of deposit, derivatives, etc.); foreign exchange; exchange, interest rate and index instruments; transferable securities; or commodity futures trading;(2)individual and collective portfolio management; or(3)otherwise investing, administering, or managing funds or money on behalf of other persons.This subparagraph 1(j) shall be interpreted in a manner consistent with similar language set forth in the definition of financial institution in the Financial Action Task Force Recommendations.k)The term Specified Insurance Company means any Entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract.l)The term Canadian Financial Institution means:(1)any Financial Institution that is resident in Canada, but excluding any branch of such Financial Institution that is located outside Canada, and(2)any branch of a Financial Institution that is not resident in Canada, if such branch is located in Canada.m)The term Partner Jurisdiction Financial Institution means:(1)any Financial Institution that is established in a Partner Jurisdiction, but excluding any branch of such Financial Institution that is located outside the Partner Jurisdiction, and(2)any branch of a Financial Institution that is not established in the Partner Jurisdiction, if such branch is located in the Partner Jurisdiction.n)The term Reporting Financial Institution means a Reporting Canadian Financial Institution or a Reporting U.S. Financial Institution, as the context requires.o)The term Reporting Canadian Financial Institution means any Canadian Financial Institution that is not a Non-Reporting Canadian Financial Institution.p)The term Reporting U.S. Financial Institution means:(1)any Financial Institution that is resident in the United States, but excluding any branch of such Financial Institution that is located outside the United States, and(2)any branch of a Financial Institution that is not resident in the United States, if such branch is located in the United States,provided that the Financial Institution or branch has control, receipt, or custody of income with respect to which information is required to be exchanged under subparagraph (2)(b) of Article 2 of this Agreement.q)The term Non-Reporting Canadian Financial Institution means any Canadian Financial Institution, or other Entity resident in Canada, that is identified in Annex II as a Non-Reporting Canadian Financial Institution or that otherwise qualifies as a deemed compliant FFI or an exempt beneficial owner under relevant U.S. Treasury Regulations in effect on the date of signature of this Agreement.r)The term Nonparticipating Financial Institution means a nonparticipating FFI, as that term is defined in relevant U.S. Treasury Regulations, but does not include a Canadian Financial Institution or other Partner Jurisdiction Financial Institution other than a Financial Institution treated as a Nonparticipating Financial Institution pursuant to subparagraph 2(b) of Article 5 of this Agreement or the corresponding provision in an agreement between the United States and a Partner Jurisdiction.s)The term Financial Account means an account maintained by a Financial Institution, and includes:(1)in the case of an Entity that is a Financial Institution solely because it is an Investment Entity, any equity or debt interest (other than interests that are regularly traded on an established securities market) in the Financial Institution;(2)in the case of a Financial Institution not described in subparagraph 1(s)(1) of this Article, any equity or debt interest in the Financial Institution (other than interests that are regularly traded on an established securities market), if:(A)the value of the debt or equity interest is determined, directly or indirectly, primarily by reference to assets that give rise to U.S. Source Withholdable Payments, and(B)the class of interests was established with a purpose of avoiding reporting in accordance with this Agreement; and(3)any Cash Value Insurance Contract and any Annuity Contract issued or maintained by a Financial Institution, other than a noninvestment-linked, nontransferable immediate life annuity that is issued to an individual and monetizes a pension or disability benefit provided under an account, product, or arrangement identified as excluded from the definition of Financial Account in Annex II.Notwithstanding the foregoing, the term Financial Account does not include any account, product, or arrangement identified as excluded from the definition of Financial Account in Annex II. For purposes of this Agreement, interests are “regularly traded” if there is a meaningful volume of trading with respect to the interests on an ongoing basis, and an established securities market means an exchange that is officially recognized and supervised by a governmental authority in which the market is located and that has a meaningful annual value of shares traded on the exchange. For purposes of this subparagraph 1(s), an interest in a Financial Institution is not “regularly traded” and shall be treated as a Financial Account if the holder of the interest (other than a Financial Institution acting as an intermediary) is registered on the books of such Financial Institution. The preceding sentence will not apply to interests first registered on the books of such Financial Institution prior to July 1, 2014, and with respect to interests first registered on the books of such Financial Institution on or after July 1, 2014, a Financial Institution is not required to apply the preceding sentence prior to January 1, 2016.t)The term Depository Account includes any commercial, checking, savings, time, or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument maintained by a Financial Institution in the ordinary course of a banking or similar business. A Depository Account also includes an amount held by an insurance company pursuant to a guaranteed investment contract or similar agreement to pay or credit interest thereon.u)The term Custodial Account means an account (other than an Insurance Contract or Annuity Contract) for the benefit of another person that holds any financial instrument or contract held for investment (including, but not limited to, a share or stock in a corporation, a note, bond, debenture, or other evidence of indebtedness, a currency or commodity transaction, a credit default swap, a swap based upon a nonfinancial index, a notional principal contract, an Insurance Contract or Annuity Contract, and any option or other derivative instrument).v)The term Equity Interest means, in the case of a partnership that is a Financial Institution, either a capital or profits interest in the partnership. In the case of a trust that is a Financial Institution, an Equity Interest is considered to be held by any person treated as a settlor or beneficiary of all or a portion of the trust, or any other natural person exercising ultimate effective control over the trust. A Specified U.S. Person shall be treated as being a beneficiary of a foreign trust if such Specified U.S. Person has the right to receive directly or indirectly (for example, through a nominee) a mandatory distribution or may receive, directly or indirectly, a discretionary distribution from the trust.w)The term Insurance Contract means a contract (other than an Annuity Contract) under which the issuer agrees to pay an amount upon the occurrence of a specified contingency involving mortality, morbidity, accident, liability, or property risk.x)The term Annuity Contract means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals. The term also includes a contract that is considered to be an Annuity Contract in accordance with the law, regulation, or practice of the jurisdiction in which the contract was issued, and under which the issuer agrees to make payments for a term of years.y)The term Cash Value Insurance Contract means an Insurance Contract (other than an indemnity reinsurance contract between two insurance companies) that has a Cash Value greater than $50,000.z)The term Cash Value means the greater of (i) the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan), and (ii) the amount the policyholder can borrow under or with regard to the contract. Notwithstanding the foregoing, the term Cash Value does not include an amount payable under an Insurance Contract as:(1)a personal injury or sickness benefit or other benefit providing indemnification of an economic loss incurred upon the occurrence of the event insured against;(2)a refund to the policyholder of a previously paid premium under an Insurance Contract (other than under a life insurance contract) due to policy cancellation or termination, decrease in risk exposure during the effective period of the Insurance Contract, or arising from a redetermination of the premium due to correction of posting or other similar error; or(3)a policyholder dividend based upon the underwriting experience of the contract or group involved.aa)The term Reportable Account means a U.S. Reportable Account or a Canadian Reportable Account, as the context requires.bb)The term Canadian Reportable Account means a Financial Account maintained by a Reporting U.S. Financial Institution if:(1)in the case of a Depository Account, the account is held by an individual resident in Canada and more than $10 of interest is paid to such account in any given calendar year; or(2)in the case of a Financial Account other than a Depository Account, the Account Holder is a resident of Canada, including an Entity that certifies that it is resident in Canada for tax purposes, with respect to which U.S. source income that is subject to reporting under chapter 3 of subtitle A or chapter 61 of subtitle F of the U.S. Internal Revenue Code is paid or credited.cc)The term U.S. Reportable Account means a Financial Account maintained by a Reporting Canadian Financial Institution and held by one or more Specified U.S. Persons or by a Non-U.S. Entity with one or more Controlling Persons that is a Specified U.S. Person. Notwithstanding the foregoing, an account shall not be treated as a U.S. Reportable Account if such account is not identified as a U.S. Reportable Account after application of the due diligence procedures in Annex I.dd)The term Account Holder means the person listed or identified as the holder of a Financial Account by the Financial Institution that maintains the account. A person, other than a Financial Institution, holding a Financial Account for the benefit or account of another person as agent, custodian, nominee, signatory, investment advisor, or intermediary, is not treated as the Account Holder for purposes of this Agreement, and such other person is treated as the Account Holder. For purposes of the immediately preceding sentence, the term Financial Institution does not include a Financial Institution organized or incorporated in a U.S. Territory. In the case of a Cash Value Insurance Contract or an Annuity Contract, the Account Holder is any person entitled to access the Cash Value or change the beneficiary of the contract. If no person can access the Cash Value or change the beneficiary, the Account Holder is any person named as the owner in the contract and any person with a vested entitlement to payment under the terms of the contract. Upon the maturity of a Cash Value Insurance Contract or an Annuity Contract, each person entitled to receive a payment under the contract is treated as an Account Holder.ee)The term U.S. Person means:(1)a U.S. citizen or resident individual,(2)a partnership or corporation organized in the United States or under the laws of the United States or any State thereof,(3)a trust if(A)a court within the United States would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust, and(B)one or more U.S. persons have the authority to control all substantial decisions of the trust, or(4)an estate of a decedent that is a citizen or resident of the United States.This subparagraph 1(ee) shall be interpreted in accordance with the U.S. Internal Revenue Code.ff)The term Specified U.S. Person means a U.S. Person, other than:(1)a corporation the stock of which is regularly traded on one or more established securities markets;(2)any corporation that is a member of the same expanded affiliated group, as defined in section 1471(e)(2) of the U.S. Internal Revenue Code, as a corporation described in clause (1);(3)the United States or any wholly owned agency or instrumentality thereof;(4)any State of the United States, any U.S. Territory, any political subdivision of any of the foregoing, or any wholly owned agency or instrumentality of any one or more of the foregoing;(5)any organization exempt from taxation under section 501(a) of the U.S. Internal Revenue Code or an individual retirement plan as defined in section 7701(a)(37) of the U.S. Internal Revenue Code;(6)any bank as defined in section 581 of the U.S. Internal Revenue Code;(7)any real estate investment trust as defined in section 856 of the U.S. Internal Revenue Code;(8)any regulated investment company as defined in section 851 of the U.S. Internal Revenue Code or any entity registered with the U.S. Securities and Exchange Commission under the U.S. Investment Company Act of 1940;(9)any common trust fund as defined in section 584(a) of the U.S. Internal Revenue Code;(10)any trust that is exempt from tax under section 664(c) of the U.S. Internal Revenue Code or that is described in section 4947(a)(1) of the U.S. Internal Revenue Code;(11)a dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any State thereof;(12)a broker as defined in section 6045(c) of the U.S. Internal Revenue Code; or(13)any tax exempt trust under a plan that is described in section 403(b) or section 457(b) of the U.S. Internal Revenue Code.gg)The term Entity means a legal person or a legal arrangement such as a trust.hh)The term Non-U.S. Entity means an Entity that is not a U.S. Person.ii)The term U.S. Source Withholdable Payment means any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States. Notwithstanding the foregoing, a U.S. Source Withholdable Payment does not include any payment that is not treated as a withholdable payment in relevant U.S. Treasury Regulations.jj)An Entity is a Related Entity of another Entity if either Entity controls the other Entity, or the two Entities are under common control. For this purpose control includes direct or indirect ownership of more than 50 percent of the vote or value in an Entity. Notwithstanding the foregoing, Canada may treat an Entity as not a Related Entity of another Entity if the two Entities are not members of the same expanded affiliated group as defined in section 1471(e)(2) of the U.S. Internal Revenue Code.kk)The term U.S. TIN means a U.S. federal taxpayer identifying number.ll)The term Canadian TIN means a Canadian taxpayer identifying number.mm)The term Controlling Persons means the natural persons who exercise control over an Entity. In the case of a trust, such term means the settlor, the trustees, the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions. The term Controlling Persons shall be interpreted in a manner consistent with the Financial Action Task Force Recommendations.2Any term not otherwise defined in this Agreement shall, unless the context otherwise requires or the Competent Authorities agree to a common meaning (as permitted by domestic law), have the meaning that it has at that time under the law of the Party applying this Agreement, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.ARTICLE 2Obligations to Obtain and Exchange Information with Respect to Reportable Accounts1Subject to the provisions of Article 3 of this Agreement, each Party shall obtain the information specified in paragraph 2 of this Article with respect to all Reportable Accounts and shall annually exchange this information with the other Party on an automatic basis pursuant to the provisions of Article XXVII of the Convention.2The information to be obtained and exchanged is:a)In the case of Canada with respect to each U.S. Reportable Account of each Reporting Canadian Financial Institution:(1)the name, address, and U.S. TIN of each Specified U.S. Person that is an Account Holder of such account and, in the case of a Non-U.S. Entity that, after application of the due diligence procedures set forth in Annex I, is identified as having one or more Controlling Persons that is a Specified U.S. Person, the name, address, and U.S. TIN (if any) of such Entity and each such Specified U.S. Person;(2)the account number (or functional equivalent in the absence of an account number);(3)the name and identifying number of the Reporting Canadian Financial Institution;(4)the account balance or value (including, in the case of a Cash Value Insurance Contract or Annuity Contract, the Cash Value or surrender value) as of the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure;(5)in the case of any Custodial Account:(A)the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year or other appropriate reporting period; and(B)the total gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Canadian Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder;(6)in the case of any Depository Account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period; and(7)in the case of any account not described in subparagraph 2(a)(5) or 2(a)(6) of this Article, the total gross amount paid or credited to the Account Holder with respect to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Canadian Financial Institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the Account Holder during the calendar year or other appropriate reporting period.b)In the case of the United States, with respect to each Canadian Reportable Account of each Reporting U.S. Financial Institution:(1)the name, address, and Canadian TIN of any person that is a resident of Canada and is an Account Holder of the account;(2)the account number (or the functional equivalent in the absence of an account number);(3)the name and identifying number of the Reporting U.S. Financial Institution;(4)the gross amount of interest paid on a Depository Account;(5)the gross amount of U.S. source dividends paid or credited to the account; and(6)the gross amount of other U.S. source income paid or credited to the account, to the extent subject to reporting under chapter 3 of subtitle A or chapter 61 of subtitle F of the U.S. Internal Revenue Code.ARTICLE 3Time and Manner of Exchange of Information1For purposes of the exchange obligation in Article 2 of this Agreement, the amount and characterization of payments made with respect to a U.S. Reportable Account may be determined in accordance with the principles of Canada’s tax laws, and the amount and characterization of payments made with respect to a Canadian Reportable Account may be determined in accordance with principles of U.S. federal income tax law.2For purposes of the exchange obligation in Article 2 of this Agreement, the information exchanged shall identify the currency in which each relevant amount is denominated.3With respect to paragraph 2 of Article 2 of this Agreement, information is to be obtained and exchanged with respect to 2014 and all subsequent years, except that:a)In the case of Canada:(1)the information to be obtained and exchanged with respect to 2014 is only the information described in subparagraphs 2(a)(1) through 2(a)(4) of Article 2 of this Agreement;(2)the information to be obtained and exchanged with respect to 2015 is the information described in subparagraphs 2(a)(1) through 2(a)(7) of Article 2 of this Agreement, except for gross proceeds described in subparagraph 2(a)(5)(B) of Article 2 of this Agreement; and(3)the information to be obtained and exchanged with respect to 2016 and subsequent years is the information described in subparagraphs 2(a)(1) through 2(a)(7) of Article 2 of this Agreement;b)In the case of the United States, the information to be obtained and exchanged with respect to 2014 and subsequent years is all of the information identified in subparagraph 2(b) of Article 2 of this Agreement.4Notwithstanding paragraph 3 of this Article, with respect to each Reportable Account that is maintained by a Reporting Financial Institution as of June 30, 2014, and subject to paragraph 4 of Article 6 of this Agreement, the Parties are not required to obtain and include in the exchanged information the Canadian TIN or the U.S. TIN, as applicable, of any relevant person if such taxpayer identifying number is not in the records of the Reporting Financial Institution. In such a case, the Parties shall obtain and include in the exchanged information the date of birth of the relevant person, if the Reporting Financial Institution has such date of birth in its records.5Subject to paragraphs 3 and 4 of this Article, the information described in Article 2 of this Agreement shall be exchanged within nine months after the end of the calendar year to which the information relates.6The Competent Authorities of Canada and the United States shall enter into an agreement or arrangement under the mutual agreement procedure provided for in Article XXVI of the Convention, which shall:a)establish the procedures for the automatic exchange obligations described in Article 2 of this Agreement;b)prescribe rules and procedures as may be necessary to implement Article 5 of this Agreement; andc)establish as necessary procedures for the exchange of the information reported under subparagraph 1(b) of Article 4 of this Agreement.7All information exchanged shall be subject to the confidentiality and other protections provided for in the Convention, including the provisions limiting the use of the information exchanged.ARTICLE 4Application of FATCA to Canadian Financial Institutions1Treatment of Reporting Canadian Financial Institutions: Each Reporting Canadian Financial Institution shall be treated as complying with, and not subject to withholding under, section 1471 of the U.S. Internal Revenue Code if Canada complies with its obligations under Articles 2 and 3 of this Agreement with respect to such Reporting Canadian Financial Institution, and the Reporting Canadian Financial Institution:a)identifies U.S. Reportable Accounts and reports annually to the Canadian Competent Authority the information required to be reported in subparagraph 2(a) of Article 2 of this Agreement in the time and manner described in Article 3 of this Agreement;b)for each of 2015 and 2016, reports annually to the Canadian Competent Authority the name of each Nonparticipating Financial Institution to which it has made payments and the aggregate amount of such payments;c)complies with the applicable registration requirements on the IRS FATCA registration website;d)to the extent that a Reporting Canadian Financial Institution is:(1)acting as a qualified intermediary (for purposes of section 1441 of the U.S. Internal Revenue Code) that has elected to assume primary withholding responsibility under chapter 3 of subtitle A of the U.S. Internal Revenue Code,(2)a foreign partnership that has elected to act as a withholding foreign partnership (for purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code), or(3)a foreign trust that has elected to act as a withholding foreign trust (for purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code),withholds 30 percent of any U.S. Source Withholdable Payment to any Nonparticipating Financial Institution; ande)in the case of a Reporting Canadian Financial Institution that is not described in subparagraph 1(d) of this Article and that makes a payment of, or acts as an intermediary with respect to, a U.S. Source Withholdable Payment to any Nonparticipating Financial Institution, the Reporting Canadian Financial Institution provides to any immediate payor of such U.S. Source Withholdable Payment the information required for withholding and reporting to occur with respect to such payment.Notwithstanding the foregoing, a Reporting Canadian Financial Institution with respect to which the conditions of this paragraph 1 are not satisfied shall not be subject to withholding under section 1471 of the U.S. Internal Revenue Code unless such Reporting Canadian Financial Institution is treated by the IRS as a Nonparticipating Financial Institution pursuant to subparagraph 2(b) of Article 5 of this Agreement.2Suspension of Rules Relating to Recalcitrant Accounts: The United States shall not require a Reporting Canadian Financial Institution to withhold tax under section 1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to close such account, if the U.S. Competent Authority receives the information set forth in subparagraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 of this Agreement, with respect to such account.3Specific Treatment of Canadian Retirement Plans: The United States shall treat as deemed-compliant FFIs or exempt beneficial owners, as appropriate, for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, Canadian retirement plans identified in Annex II. For this purpose, a Canadian retirement plan includes an Entity established or located in, and regulated by, Canada, or a predetermined contractual or legal arrangement, operated to provide pension or retirement benefits or earn income for providing such benefits under the laws of Canada and regulated with respect to contributions, distributions, reporting, sponsorship, and taxation.4Identification and Treatment of Other Deemed-Compliant FFIs and Exempt Beneficial Owners: The United States shall treat each Non-Reporting Canadian Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code.5Special Rules Regarding Related Entities and Branches That Are Nonparticipating Financial Institutions: If a Canadian Financial Institution, that otherwise meets the requirements described in paragraph 1 of this Article or is described in paragraph 3 or 4 of this Article, has a Related Entity or branch that operates in a jurisdiction that prevents such Related Entity or branch from fulfilling the requirements of a participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has a Related Entity or branch that is treated as a Nonparticipating Financial Institution solely due to the expiration of the transitional rule for limited FFIs and limited branches under relevant U.S. Treasury Regulations, such Canadian Financial Institution shall continue to be in compliance with the terms of this Agreement and shall continue to be treated as a deemed-compliant FFI or exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code, provided that:a)the Canadian Financial Institution treats each such Related Entity or branch as a separate Nonparticipating Financial Institution for purposes of all the reporting and withholding requirements of this Agreement and each such Related Entity or branch identifies itself to withholding agents as a Nonparticipating Financial Institution;b)each such Related Entity or branch identifies its U.S. accounts and reports the information with respect to those accounts as required under section 1471 of the U.S. Internal Revenue Code to the extent permitted under the relevant laws pertaining to the Related Entity or branch; andc)such Related Entity or branch does not specifically solicit U.S. accounts held by persons that are not resident in the jurisdiction where such Related Entity or branch is located or accounts held by Nonparticipating Financial Institutions that are not established in the jurisdiction where such branch or Related Entity is located, and such branch or Related Entity is not used by the Canadian Financial Institution or any other Related Entity to circumvent the obligations under this Agreement or under section 1471 of the U.S. Internal Revenue Code, as appropriate.6Coordination of Timing: Notwithstanding paragraphs 3 and 5 of Article 3 of this Agreement:a)Canada shall not be obligated to obtain and exchange information with respect to a calendar year that is prior to the calendar year with respect to which similar information is required to be reported to the IRS by participating FFIs pursuant to relevant U.S. Treasury Regulations;b)Canada shall not be obligated to begin exchanging information prior to the date by which participating FFIs are required to report similar information to the IRS under relevant U.S. Treasury Regulations;c)the United States shall not be obligated to obtain and exchange information with respect to a calendar year that is prior to the first calendar year with respect to which Canada is required to obtain and exchange information; andd)the United States shall not be obligated to begin exchanging information prior to the date by which Canada is required to begin exchanging information.7Coordination of Definitions with U.S. Treasury Regulations: Notwithstanding Article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, in implementing this Agreement, Canada may use, and may permit Canadian Financial Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a corresponding definition in this Agreement, provided that such application would not frustrate the purposes of this Agreement.ARTICLE 5Collaboration on Compliance and Enforcement1Minor and Administrative Errors: A Competent Authority shall notify the Competent Authority of the other Party when the first-mentioned Competent Authority has reason to believe that administrative errors or other minor errors may have led to incorrect or incomplete information reporting or resulted in other infringements of this Agreement. The Competent Authority of such other Party shall endeavor, including where appropriate by applying its domestic law (including applicable penalties), to obtain corrected and/or complete information or to resolve other infringements of this Agreement.2Significant Non-Compliance:a)A Competent Authority shall notify the Competent Authority of the other Party when the first-mentioned Competent Authority has determined that there is significant non-compliance with the obligations under this Agreement with respect to a Reporting Financial Institution in the other jurisdiction. The Competent Authority of such other Party shall apply its domestic law (including applicable penalties) to address the significant non-compliance described in the notice.b)If, in the case of a Reporting Canadian Financial Institution, such enforcement actions do not resolve the non-compliance within a period of 18 months after notification of significant non-compliance is first provided, the United States shall treat the Reporting Canadian Financial Institution as a Nonparticipating Financial Institution pursuant to this subparagraph 2(b).3Reliance on Third Party Service Providers: Each Party may allow Reporting Financial Institutions to use third party service providers to fulfill the obligations imposed on such Reporting Financial Institutions by a Party, as contemplated in this Agreement, but these obligations shall remain the responsibility of the Reporting Financial Institutions.4Prevention of Avoidance: The Parties shall implement as necessary requirements to prevent Financial Institutions from adopting practices intended to circumvent the reporting required under this Agreement.ARTICLE 6Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange and Transparency1Reciprocity: The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.2Treatment of Passthru Payments and Gross Proceeds: The Parties are committed to work together, along with Partner Jurisdictions, to develop a practical and effective alternative approach to achieve the policy objectives of foreign passthru payment and gross proceeds withholding that minimizes burden.3Development of Common Reporting and Exchange Model: The Parties are committed to working with Partner Jurisdictions and the Organisation for Economic Co-operation and Development on adapting the terms of this Agreement and other agreements between the United States and Partner Jurisdictions to a common model for automatic exchange of information, including the development of reporting and due diligence standards for financial institutions.4Documentation of Accounts Maintained as of June 30, 2014: With respect to Reportable Accounts maintained by a Reporting Financial Institution as of June 30, 2014:a)The United States commits to establish, by January 1, 2017, for reporting with respect to 2017 and subsequent years, rules requiring Reporting U.S. Financial Institutions to obtain and report the Canadian TIN of each Account Holder of a Canadian Reportable Account as required pursuant to subparagraph 2(b)(1) of Article 2 of this Agreement; andb)Canada commits to establish, by January 1, 2017, for reporting with respect to 2017 and subsequent years, rules requiring Reporting Canadian Financial Institutions to obtain the U.S. TIN of each Specified U.S. Person as required pursuant to subparagraph 2(a)(1) of Article 2 of this Agreement.ARTICLE 7Consistency in the Application of FATCA to Partner Jurisdictions1Canada shall be granted the benefit of any more favorable terms under Article 4 or Annex I of this Agreement relating to the application of FATCA to Canadian Financial Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement pursuant to which the other Partner Jurisdiction commits to undertake the same obligations as Canada described in Articles 2 and 3 of this Agreement, and subject to the same terms and conditions as described therein and in Articles 5 through 9 of this Agreement.2The United States shall notify Canada of any such more favorable terms, and such more favorable terms shall apply automatically under this Agreement as if such terms were specified in this Agreement and effective as of the date of signing of the agreement incorporating the more favorable terms, unless Canada declines the application thereof.ARTICLE 8Consultations and Amendments1In case any difficulties in the implementation of this Agreement arise, either Party may request consultations to develop appropriate measures to ensure the fulfillment of this Agreement.2This Agreement may be amended by written mutual agreement of the Parties. Unless otherwise agreed upon, such an amendment shall enter into force through the same procedures as set forth in paragraph 1 of Article 10 of this Agreement.ARTICLE 9AnnexesThe Annexes form an integral part of this Agreement.ARTICLE 10Term of Agreement1This Agreement shall enter into force on the date of Canada’s written notification to the United States that Canada has completed its necessary internal procedures for entry into force of this Agreement.2Either Party may terminate this Agreement by giving notice of termination in writing to the other Party. Such termination shall become effective on the first day of the month following the expiration of a period of 12 months after the date of the notice of termination.3The Parties shall, prior to December 31, 2016, consult in good faith to amend this Agreement as necessary to reflect progress on the commitments set forth in Article 6 of this Agreement.IN WITNESS WHEREOF, the undersigned, being duly authorized thereto by their respective Governments, have signed this Agreement.DONE in duplicate, at Ottawa, this 5th day of February 2014, in the English and French languages, each version being equally authentic.FOR THE GOVERNMENT OF CANADAFOR THE GOVERNMENT OF THE UNITED STATES OF AMERICAANNEX IDue Diligence Obligations for Identifying and Reporting on U.S. Reportable Accounts and on Payments to Certain Nonparticipating Financial InstitutionsIGeneralACanada shall require that Reporting Canadian Financial Institutions apply the due diligence procedures contained in this Annex I to identify U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions.BFor purposes of the Agreement,1All dollar amounts are in U.S. dollars and shall be read to include the equivalent in other currencies.2Except as otherwise provided herein, the balance or value of an account shall be determined as of the last day of the calendar year or other appropriate reporting period.3Where a balance or value threshold is to be determined as of June 30, 2014, under this Annex I, the relevant balance or value shall be determined as of that day or the last day of the reporting period ending immediately before June 30, 2014, and where a balance or value threshold is to be determined as of the last day of a calendar year under this Annex I, the relevant balance or value shall be determined as of the last day of the calendar year or other appropriate reporting period.4Subject to subparagraph E(1) of section II of this Annex I, an account shall be treated as a U.S. Reportable Account beginning as of the date it is identified as such pursuant to the due diligence procedures in this Annex I.5Unless otherwise provided, information with respect to a U.S. Reportable Account shall be reported annually in the calendar year following the year to which the information relates.CAs an alternative to the procedures described in each section of this Annex I, Canada may permit Reporting Canadian Financial Institutions to rely on the procedures described in relevant U.S. Treasury Regulations to establish whether an account is a U.S. Reportable Account or an account held by a Nonparticipating Financial Institution. Canada may permit Reporting Canadian Financial Institutions to make such election separately for each section of this Annex I either with respect to all relevant Financial Accounts or, separately, with respect to any clearly identified group of such accounts (such as by line of business or the location of where the account is maintained).IIPreexisting Individual AccountsThe following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by individuals (“Preexisting Individual Accounts”).AAccounts Not Required to Be Reviewed, Identified, or Reported: Unless the Reporting Canadian Financial Institution elects otherwise, either with respect to all Preexisting Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Canada provide for such an election, the following Preexisting Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:1Subject to subparagraph E(2) of this section, a Preexisting Individual Account with a balance or value that does not exceed $50,000 as of June 30, 2014.2Subject to subparagraph E(2) of this section, a Preexisting Individual Account that is a Cash Value Insurance Contract or an Annuity Contract with a balance or value of $250,000 or less as of June 30, 2014.3A Preexisting Individual Account that is a Cash Value Insurance Contract or an Annuity Contract, provided the law or regulations of Canada or the United States effectively prevent the sale of such a Cash Value Insurance Contract or an Annuity Contract to U.S. residents (e.g., if the relevant Financial Institution does not have the required registration under U.S. law, and the law of Canada requires reporting or withholding with respect to insurance products held by residents of Canada).4A Depository Account with a balance of $50,000 or less.BReview Procedures for Preexisting Individual Accounts with a Balance or Value as of June 30, 2014, that Exceeds $50,000  ($250,000 for a Cash Value Insurance Contract or Annuity Contract), but Does Not Exceed $1,000,000 (“Lower Value Accounts”)1Electronic Record SearchThe Reporting Canadian Financial Institution must review electronically searchable data maintained by the Reporting Canadian Financial Institution for any of the following U.S. indicia:a)Identification of the Account Holder as a U.S. citizen or resident;b)Unambiguous indication of a U.S. place of birth;c)Current U.S. mailing or residence address (including a U.S. post office box);d)Current U.S. telephone number;e)Standing instructions to transfer funds to an account maintained in the United States;f)Currently effective power of attorney or signatory authority granted to a person with a U.S. address; org)An “in-care-of” or “hold mail” address that is the sole address the Reporting Canadian Financial Institution has on file for the Account Holder. In the case of a Preexisting Individual Account that is a Lower Value Account, an “in-care-of” address outside the United States or “hold mail” address shall not be treated as U.S. indicia.2If none of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the electronic search, then no further action is required until there is a change in circumstances that results in one or more U.S. indicia being associated with the account, or the account becomes a High Value Account described in paragraph D of this section.3If any of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the electronic search, or if there is a change in circumstances that results in one or more U.S. indicia being associated with the account, then the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account.4Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this section, a Reporting Canadian Financial Institution is not required to treat an account as a U.S. Reportable Account if:a)Where the Account Holder information unambiguously indicates a U.S. place of birth, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:(1)A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form);(2)A non-U.S. passport or other government-issued identification evidencing the Account Holder’s citizenship or nationality in a country other than the United States; and(3)A copy of the Account Holder’s Certificate of Loss of Nationality of the United States or a reasonable explanation of:aThe reason the Account Holder does not have such a certificate despite relinquishing U.S. citizenship; orbThe reason the Account Holder did not obtain U.S. citizenship at birth.b)Where the Account Holder information contains a current U.S. mailing or residence address, or one or more U.S. telephone numbers that are the only telephone numbers associated with the account, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:(1)A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and(2)Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder’s non-U.S. status.c)Where the Account Holder information contains standing instructions to transfer funds to an account maintained in the United States, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:(1)A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and(2)Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder’s non-U.S. status.d)Where the Account Holder information contains a currently effective power of attorney or signatory authority granted to a person with a U.S. address, has an “in-care-of” address or “hold mail” address that is the sole address identified for the Account Holder, or has one or more U.S. telephone numbers (if a non-U.S. telephone number is also associated with the account), the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:(1)A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); or(2)Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder’s non-U.S. status.CAdditional Procedures Applicable to Preexisting Individual Accounts That Are Lower Value Accounts1Review of Preexisting Individual Accounts that are Lower Value Accounts for U.S. indicia must be completed by June 30, 2016.2If there is a change of circumstances with respect to a Preexisting Individual Account that is a Lower Value Account that results in one or more U.S. indicia described in subparagraph B(1) of this section being associated with the account, then the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless subparagraph B(4) of this section applies.3Except for Depository Accounts described in subparagraph A(4) of this section, any Preexisting Individual Account that has been identified as a U.S. Reportable Account under this section shall be treated as a U.S. Reportable Account in all subsequent years, unless the Account Holder ceases to be a Specified U.S. Person.DEnhanced Review Procedures for Preexisting Individual Accounts with a Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 31, of 2015 or Any Subsequent Year (“High Value Accounts”)1Electronic Record SearchThe Reporting Canadian Financial Institution must review electronically searchable data maintained by the Reporting Canadian Financial Institution for any of the U.S. indicia described in subparagraph B(1) of this section.2Paper Record SearchIf the Reporting Canadian Financial Institution’s electronically searchable databases include fields for, and capture all of the information described in, subparagraph D(3) of this section, then no further paper record search is required. If the electronic databases do not capture all of this information, then with respect to a High Value Account, the Reporting Canadian Financial Institution must also review the current customer master file and, to the extent not contained in the current customer master file, the following documents associated with the account and obtained by the Reporting Canadian Financial Institution within the last five years for any of the U.S. indicia described in subparagraph B(1) of this section:a)The most recent documentary evidence collected with respect to the account;b)The most recent account opening contract or documentation;c)The most recent documentation obtained by the Reporting Canadian Financial Institution pursuant to AML/KYC Procedures or for other regulatory purposes;d)Any power of attorney or signature authority forms currently in effect; ande)Any standing instructions to transfer funds currently in effect.3Exception Where Databases Contain Sufficient InformationA Reporting Canadian Financial Institution is not required to perform the paper record search described in subparagraph D(2) of this section if the Reporting Canadian Financial Institution’s electronically searchable information includes the following:a)The Account Holder’s nationality or residence status;b)The Account Holder’s residence address and mailing address currently on file with the Reporting Canadian Financial Institution;c)The Account Holder’s telephone number(s) currently on file, if any, with the Reporting Canadian Financial Institution;d)Whether there are standing instructions to transfer funds in the account to another account (including an account at another branch of the Reporting Canadian Financial Institution or another Financial Institution);e)Whether there is a current “in-care-of” address or “hold mail” address for the Account Holder; andf)Whether there is any power of attorney or signatory authority for the account.4Relationship Manager Inquiry for Actual KnowledgeIn addition to the electronic and paper record searches described above, the Reporting Canadian Financial Institution must treat as a U.S. Reportable Account any High Value Account assigned to a relationship manager (including any Financial Accounts aggregated with such High Value Account) if the relationship manager has actual knowledge that the Account Holder is a Specified U.S. Person.5Effect of Finding U.S. Indiciaa)If none of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the enhanced review of High Value Accounts described above, and the account is not identified as held by a Specified U.S. Person in subparagraph D(4) of this section, then no further action is required until there is a change in circumstances that results in one or more U.S. indicia being associated with the account.b)If any of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the enhanced review of High Value Accounts described above, or if there is a subsequent change in circumstances that results in one or more U.S. indicia being associated with the account, then the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account.c)Except for Depository Accounts described in subparagraph A(4) of this section, any Preexisting Individual Account that has been identified as a U.S. Reportable Account under this section shall be treated as a U.S. Reportable Account in all subsequent years, unless the Account Holder ceases to be a Specified U.S. Person.EAdditional Procedures Applicable to High Value Accounts1If a Preexisting Individual Account is a High Value Account as of June 30, 2014, the Reporting Canadian Financial Institution must complete the enhanced review procedures described in paragraph D of this section with respect to such account by June 30, 2015. If based on this review such account is identified as a U.S. Reportable Account on or before December 31, 2014, the Reporting Canadian Financial Institution must report the required information about such account with respect to 2014 in the first report on the account and on an annual basis thereafter. In the case of an account identified as a U.S. Reportable Account after December 31, 2014, and on or before June 30, 2015, the Reporting Canadian Financial Institution is not required to report information about such account with respect to 2014, but must report information about the account on an annual basis thereafter.2If a Preexisting Individual Account is not a High Value Account as of June 30, 2014, but becomes a High Value Account as of the last day of 2015 or any subsequent calendar year, the Reporting Canadian Financial Institution must complete the enhanced review procedures described in paragraph D of this section with respect to such account within six months after the last day of the calendar year in which the account becomes a High Value Account. If based on this review such account is identified as a U.S. Reportable Account, the Reporting Canadian Financial Institution must report the required information about such account with respect to the year in which it is identified as a U.S. Reportable Account and subsequent years on an annual basis, unless the Account Holder ceases to be a Specified U.S. Person.3Once a Reporting Canadian Financial Institution applies the enhanced review procedures described in paragraph D of this section to a High Value Account, the Reporting Canadian Financial Institution is not required to re-apply such procedures, other than the relationship manager inquiry described in subparagraph D(4) of this section, to the same High Value Account in any subsequent year.4If there is a change of circumstances with respect to a High Value Account that results in one or more U.S. indicia described in subparagraph B(1) of this section being associated with the account, then the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account.5A Reporting Canadian Financial Institution must implement procedures to ensure that a relationship manager identifies any change in circumstances of an account. For example, if a relationship manager is notified that the Account Holder has a new mailing address in the United States, the Reporting Canadian Financial Institution is required to treat the new address as a change in circumstances and, if it elects to apply subparagraph B(4) of this section, is required to obtain the appropriate documentation from the Account Holder.FPreexisting Individual Accounts That Have Been Documented for Certain Other PurposesA Reporting Canadian Financial Institution that has previously obtained documentation from an Account Holder to establish the Account Holder’s status as neither a U.S. citizen nor a U.S. resident in order to meet its obligations under a qualified intermediary, withholding foreign partnership, or withholding foreign trust agreement with the IRS, or to fulfill its obligations under chapter 61 of Title 26 of the United States Code, is not required to perform the procedures described in subparagraph B(1) of this section with respect to Lower Value Accounts or subparagraphs D(1) through D(3) of this section with respect to High Value Accounts.IIINew Individual AccountsThe following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and opened on or after July 1, 2014 (“New Individual Accounts”).AAccounts Not Required to Be Reviewed, Identified, or ReportedUnless the Reporting Canadian Financial Institution elects otherwise, either with respect to all New Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Canada provide for such an election, the following New Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:1A Depository Account unless the account balance exceeds $50,000 at the end of any calendar year or other appropriate reporting period.2A Cash Value Insurance Contract unless the Cash Value exceeds $50,000 at the end of any calendar year or other appropriate reporting period.BOther New Individual Accounts(1)With respect to New Individual Accounts not described in paragraph A of this section, upon account opening (or within 90 days after the end of the calendar year in which the account ceases to be described in paragraph A of this section), the Reporting Canadian Financial Institution must obtain a self-certification, which may be part of the account opening documentation, that allows the Reporting Canadian Financial Institution to determine whether the Account Holder is resident in the United States for tax purposes (for this purpose, a U.S. citizen is considered to be resident in the United States for tax purposes, even if the Account Holder is also a tax resident of another jurisdiction) and confirm the reasonableness of such self-certification based on the information obtained by the Reporting Canadian Financial Institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.(2)If the self-certification establishes that the Account Holder is resident in the United States for tax purposes, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account and obtain a self-certification that includes the Account Holder’s U.S. TIN (which may be an IRS Form W-9 or other similar agreed form).(3)If there is a change of circumstances with respect to a New Individual Account that causes the Reporting Canadian Financial Institution to know, or have reason to know, that the original self-certification is incorrect or unreliable, the Reporting Canadian Financial Institution cannot rely on the original self-certification and must obtain a valid self-certification that establishes whether the Account Holder is a U.S. citizen or resident for U.S. tax purposes. If the Reporting Canadian Financial Institution is unable to obtain a valid self-certification, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account.IVPreexisting Entity AccountsThe following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Preexisting Accounts held by Entities (“Preexisting Entity Accounts”).AEntity Accounts Not Required to Be Reviewed, Identified or ReportedUnless the Reporting Canadian Financial Institution elects otherwise, either with respect to all Preexisting Entity Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Canada provide for such an election, a Preexisting Entity Account with an account balance or value that does not exceed $250,000 as of June 30, 2014, is not required to be reviewed, identified, or reported as a U.S. Reportable Account until the account balance or value exceeds $1,000,000.BEntity Accounts Subject to ReviewA Preexisting Entity Account that has an account balance or value that exceeds $250,000 as of June 30, 2014, and a Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014, but the account balance or value of which exceeds $1,000,000 as of the last day of 2015 or any subsequent calendar year, must be reviewed in accordance with the procedures set forth in paragraph D of this section.CEntity Accounts with Respect to Which Reporting Is RequiredWith respect to Preexisting Entity Accounts described in paragraph B of this section, only accounts that are held by one or more Entities that are Specified U.S. Persons, or by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held by Nonparticipating Financial Institutions shall be treated as accounts for which aggregate payments as described in subparagraph 1(b) of Article 4 of the Agreement are reported to the Canadian Competent Authority.DReview Procedures for Identifying Entity Accounts with Respect to Which Reporting Is RequiredFor Preexisting Entity Accounts described in paragraph B of this section, the Reporting Canadian Financial Institution must apply the following review procedures to determine whether the account is held by one or more Specified U.S. Persons, by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, or by Nonparticipating Financial Institutions:1Determine Whether the Entity Is a Specified U.S. Persona)Review information maintained for regulatory or customer relationship purposes (including information collected pursuant to AML/KYC Procedures) to determine whether the information indicates that the Account Holder is a U.S. Person. For this purpose, information indicating that the Account Holder is a U.S. Person includes a U.S. place of incorporation or organization, or a U.S. address.b)If the information indicates that the Account Holder is a U.S. Person, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless it obtains a self-certification from the Account Holder (which may be on an IRS Form W-8 or W-9, or a similar agreed form), or reasonably determines based on information in its possession or that is publicly available, that the Account Holder is not a Specified U.S. Person.2Determine Whether a Non-U.S. Entity Is a Financial Institutiona)Review information maintained for regulatory or customer relationship purposes (including information collected pursuant to AML/KYC Procedures) to determine whether the information indicates that the Account Holder is a Financial Institution.b)If the information indicates that the Account Holder is a Financial Institution, or the Reporting Canadian Financial Institution verifies the Account Holder’s Global Intermediary Identification Number on the published IRS FFI list, then the account is not a U.S. Reportable Account.3Determine Whether a Financial Institution Is a Nonparticipating Financial Institution Payments to Which Are Subject to Aggregate Reporting under Subparagraph 1(b) of Article 4 of the Agreementa)Subject to subparagraph D(3)(b) of this section, a Reporting Canadian Financial Institution may determine that the Account Holder is a Canadian Financial Institution or other Partner Jurisdiction Financial Institution if the Reporting Canadian Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder’s Global Intermediary Identification Number on the published IRS FFI list or other information that is publicly available or in the possession of the Reporting Canadian Financial Institution, as applicable. In such case, no further review, identification, or reporting is required with respect to the account.b)If the Account Holder is a Canadian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement.c)If the Account Holder is not a Canadian Financial Institution or other Partner Jurisdiction Financial Institution, then the Reporting Canadian Financial Institution must treat the Account Holder as a Nonparticipating Financial Institution payments to which are reportable under subparagraph 1(b) of Article 4 of the Agreement, unless the Reporting Canadian Financial Institution:(1)Obtains a self-certification (which may be on an IRS Form W-8 or similar agreed form) from the Account Holder that it is a certified deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or(2)In the case of a participating FFI or registered deemed-compliant FFI, verifies the Account Holder’s Global Intermediary Identification Number on the published IRS FFI list.4Determine Whether an Account Held by an NFFE Is a U.S. Reportable AccountWith respect to an Account Holder of a Preexisting Entity Account that is not identified as either a U.S. Person or a Financial Institution, the Reporting Canadian Financial Institution must identify (i) whether the Account Holder has Controlling Persons, (ii) whether the Account Holder is a Passive NFFE, and (iii) whether any of the Controlling Persons of the Account Holder is a U.S. citizen or resident. In making these determinations the Reporting Canadian Financial Institution must follow the guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the order most appropriate under the circumstances.a)For purposes of determining the Controlling Persons of an Account Holder, a Reporting Canadian Financial Institution may rely on information collected and maintained pursuant to AML/KYC Procedures.b)For purposes of determining whether the Account Holder is a Passive NFFE, the Reporting Canadian Financial Institution must obtain a self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder to establish its status, unless it has information in its possession or that is publicly available, based on which it can reasonably determine that the Account Holder is an Active NFFE.c)For purposes of determining whether a Controlling Person of a Passive NFFE is a U.S. citizen or resident for tax purposes, a Reporting Canadian Financial Institution may rely on:(1)Information collected and maintained pursuant to AML/KYC Procedures in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that does not exceed $1,000,000; or(2)A self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder or such Controlling Person in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that exceeds $1,000,000.d)If any Controlling Person of a Passive NFFE is a U.S. citizen or resident, the account shall be treated as a U.S. Reportable Account.ETiming of Review and Additional Procedures Applicable to Preexisting Entity Accounts1Review of Preexisting Entity Accounts with an account balance or value that exceeds $250,000 as of June 30, 2014 must be completed by June 30, 2016.2Review of Preexisting Entity Accounts with an account balance or value that does not exceed $250,000 as of June 30, 2014, but exceeds $1,000,000 as of December 31 of 2015 or any subsequent year, must be completed within six months after the last day of the calendar year in which the account balance or value exceeds $1,000,000.3If there is a change of circumstances with respect to a Preexisting Entity Account that causes the Reporting Canadian Financial Institution to know, or have reason to know, that the self-certification or other documentation associated with an account is incorrect or unreliable, the Reporting Canadian Financial Institution must redetermine the status of the account in accordance with the procedures set forth in paragraph D of this section.VNew Entity AccountsThe following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 (“New Entity Accounts”).AEntity Accounts Not Required to Be Reviewed, Identified or ReportedUnless the Reporting Canadian Financial Institution elects otherwise, either with respect to all New Entity Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Canada provide for such election, a credit card account or a revolving credit facility treated as a New Entity Account is not required to be reviewed, identified, or reported, provided that the Reporting Canadian Financial Institution maintaining such account implements policies and procedures to prevent an account balance owed to the Account Holder that exceeds $50,000.BOther New Entity AccountsWith respect to New Entity Accounts not described in paragraph A of this section, the Reporting Canadian Financial Institution must determine whether the Account Holder is:(1)a Specified U.S. Person;(2)a Canadian Financial Institution or other Partner Jurisdiction Financial Institution;(3)a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or(4)an Active NFFE or Passive NFFE.CSubject to paragraph D of this section, a Reporting Canadian Financial Institution may determine that the Account Holder is an Active NFFE, a Canadian Financial Institution, or other Partner Jurisdiction Financial Institution if the Reporting Canadian Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder’s Global Intermediary Identification Number or other information that is publicly available or in the possession of the Reporting Canadian Financial Institution, as applicable.DIf the Account Holder is a Canadian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement.EIn all other cases, a Reporting Canadian Financial Institution must obtain a self-certification from the Account Holder to establish the Account Holder’s status. Based on the self-certification, the following rules apply:1If the Account Holder is a Specified U.S. Person, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account.2If the Account Holder is a Passive NFFE, the Reporting Canadian Financial Institution must identify the Controlling Persons as determined under AML/KYC Procedures, and must determine whether any such person is a U.S. citizen or resident on the basis of a self-certification from the Account Holder or such person. If any such person is a U.S. citizen or resident, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account.3If the Account Holder is:a)a U.S. Person that is not a Specified U.S. Person;b)subject to subparagraph E(4) of this section, a Canadian Financial Institution or other Partner Jurisdiction Financial Institution;c)a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations;d)an Active NFFE; ore)a Passive NFFE none of the Controlling Persons of which is a U.S. citizen or resident,then the account is not a U.S. Reportable Account and no reporting is required with respect to the account.4If the Account Holder is a Nonparticipating Financial Institution (including a Canadian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution), then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement.VISpecial Rules and DefinitionsThe following additional rules and definitions apply in implementing the due diligence procedures described above:AReliance on Self-Certifications and Documentary EvidenceA Reporting Canadian Financial Institution may not rely on a self-certification or documentary evidence if the Reporting Canadian Financial Institution knows or has reason to know that the self-certification or documentary evidence is incorrect or unreliable.BDefinitionsThe following definitions apply for purposes of this Annex I:1AML/KYC ProceduresAML/KYC Procedures means the customer due diligence procedures of a Reporting Canadian Financial Institution pursuant to the anti-money laundering or similar requirements of Canada to which such Reporting Canadian Financial Institution is subject.2NFFEAn NFFE means any Non-U.S. Entity that is not an FFI as defined in relevant U.S. Treasury Regulations or is an Entity described in subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity that is resident in Canada or another Partner Jurisdiction and that is not a Financial Institution.3Passive NFFEA Passive NFFE means any NFFE that is nota)an Active NFFE; orb)a withholding foreign partnership or withholding foreign trust pursuant to relevant U.S. Treasury Regulations.4Active NFFEAn Active NFFE means any NFFE that meets any of the following criteria:a)Less than 50 percent of the NFFE’s gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50 percent of the assets held by the NFFE during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the production of passive income;b)The stock of the NFFE is regularly traded on an established securities market or the NFFE is a Related Entity of an Entity the stock of which is regularly traded on an established securities market;c)The NFFE is organized in a U.S. Territory and all of the owners of the payee are bona fide residents of that U.S. Territory;d)The NFFE is a government (other than the U.S. government), a political subdivision of such government (which, for the avoidance of doubt, includes a state, province, county, or municipality), or a public body performing a function of such government or a political subdivision thereof, a government of a U.S. Territory, an international organization, a non-U.S. central bank of issue, or an Entity wholly owned by one or more of the foregoing;e)Substantially all of the activities of the NFFE consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution, except that an NFFE shall not qualify for this status if the NFFE functions (or holds itself out) as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes;f)The NFFE is not yet operating a business and has no prior operating history, but is investing capital into assets with the intent to operate a business other than that of a Financial Institution, provided that the NFFE shall not qualify for this exception after the date that is 24 months after the date of the initial organization of the NFFE;g)The NFFE was not a Financial Institution in the past five years, and is in the process of liquidating its assets or is reorganizing with the intent to continue or recommence operations in a business other than that of a Financial Institution;h)The NFFE primarily engages in financing and hedging transactions with, or for, Related Entities that are not Financial Institutions, and does not provide financing or hedging services to any Entity that is not a Related Entity, provided that the group of any such Related Entities is primarily engaged in a business other than that of a Financial Institution;i)The NFFE is an excepted NFFE as described in relevant U.S. Treasury Regulations; orj)The NFFE meets all of the following requirements:(1)It is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in its jurisdiction of residence and it is a professional organization, business league, chamber of commerce, labor organization, agricultural or horticultural organization, civic league or an organization operated exclusively for the promotion of social welfare;(2)It is exempt from income tax in its jurisdiction of residence;(3)It has no shareholders or members who have a proprietary or beneficial interest in its income or assets;(4)The applicable laws of the NFFE’s jurisdiction of residence or the NFFE’s formation documents do not permit any income or assets of the NFFE to be distributed to, or applied for the benefit of, a private person or non-charitable Entity other than pursuant to the conduct of the NFFE’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the NFFE has purchased; and(5)The applicable laws of the NFFE’s jurisdiction of residence or the NFFE’s formation documents require that, upon the NFFE’s liquidation or dissolution, all of its assets be distributed to a governmental entity or other non-profit organization, or escheat to the government of the NFFE’s jurisdiction of residence or any political subdivision thereof.5Preexisting AccountA Preexisting Account means a Financial Account maintained by a Reporting Financial Institution as of June 30, 2014.CAccount Balance Aggregation and Currency Translation Rules1Aggregation of Individual AccountsFor purposes of determining the aggregate balance or value of Financial Accounts held by an individual, a Reporting Canadian Financial Institution is required to aggregate all Financial Accounts maintained by the Reporting Canadian Financial Institution, or by a Related Entity, but only to the extent that the Reporting Canadian Financial Institution’s computerized systems link the Financial Accounts by reference to a data element such as client number or taxpayer identification number, and allow account balances or values to be aggregated. Each holder of a jointly held Financial Account shall be attributed the entire balance or value of the jointly held Financial Account for purposes of applying the aggregation requirements described in this paragraph 1.2Aggregation of Entity AccountsFor purposes of determining the aggregate balance or value of Financial Accounts held by an Entity, a Reporting Canadian Financial Institution is required to take into account all Financial Accounts that are maintained by the Reporting Canadian Financial Institution, or by a Related Entity, but only to the extent that the Reporting Canadian Financial Institution’s computerized systems link the Financial Accounts by reference to a data element such as client number or taxpayer identification number, and allow account balances or values to be aggregated.3Special Aggregation Rule Applicable to Relationship ManagersFor purposes of determining the aggregate balance or value of Financial Accounts held by a person to determine whether a Financial Account is a High Value Account, a Reporting Canadian Financial Institution is also required, in the case of any Financial Accounts that a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled, or established (other than in a fiduciary capacity) by the same person, to aggregate all such accounts.4Currency Translation RuleFor purposes of determining the balance or value of Financial Accounts denominated in a currency other than the U.S. dollar, a Reporting Canadian Financial Institution must convert the U.S. dollar threshold amounts described in this Annex I into such currency using a published spot rate determined as of the last day of the calendar year preceding the year in which the Reporting Canadian Financial Institution is determining the balance or value.DDocumentary EvidenceFor purposes of this Annex I, acceptable documentary evidence includes any of the following:1A certificate of residence issued by an authorized government body (for example, a government or agency thereof, or a municipality) of the jurisdiction in which the payee claims to be a resident.2With respect to an individual, any valid identification issued by an authorized government body (for example, a government or agency thereof, or a municipality), that includes the individual’s name and is typically used for identification purposes.3With respect to an Entity, any official documentation issued by an authorized government body (for example, a government or agency thereof, or a municipality) that includes the name of the Entity and either the address of its principal office in the jurisdiction (or U.S. Territory) in which it claims to be a resident or the jurisdiction (or U.S. Territory) in which the Entity was incorporated or organized.4With respect to a Financial Account maintained in a jurisdiction with anti-money laundering rules that have been approved by the IRS in connection with a QI agreement (as described in relevant U.S. Treasury Regulations), any of the documents, other than a Form W-8 or W-9, referenced in the jurisdiction’s attachment to the QI agreement for identifying individuals or Entities.5Any financial statement, third-party credit report, bankruptcy filing, or U.S. Securities and Exchange Commission report.EAlternative Procedures for Financial Accounts Held by Individual Beneficiaries of a Cash Value Insurance ContractA Reporting Canadian Financial Institution may presume that an individual beneficiary (other than the owner) of a Cash Value Insurance Contract receiving a death benefit is not a Specified U.S. Person and may treat such Financial Account as other than a U.S. Reportable Account unless the Reporting Canadian Financial Institution knows, or has reason to know, that the beneficiary is a Specified U.S. Person. A Reporting Canadian Financial Institution has reason to know that a beneficiary of a Cash Value Insurance Contract is a Specified U.S. Person if the information collected by the Reporting Canadian Financial Institution and associated with the beneficiary contains U.S. indicia as described in subparagraph (B)(1) of section II of this Annex I. If a Reporting Canadian Financial Institution knows, or has reason to know, that the beneficiary is a Specified U.S. Person, the Reporting Canadian Financial Institution must follow the procedures in subparagraph B(3) of section II of this Annex I.FReliance on Third PartiesRegardless of whether an election is made under paragraph C of section I of this Annex I, Canada may permit Reporting Canadian Financial Institutions to rely on due diligence procedures performed by third parties, to the extent provided in relevant U.S. Treasury Regulations.ANNEX IINon-Reporting Canadian Financial Institutions and ProductsIGeneralAThis Annex may be modified by a mutual written decision entered into between the Competent Authorities of Canada and the United States:1To include additional Entities, accounts, and products that present a low risk of being used by U.S. Persons to evade U.S. tax and that have similar characteristics to the Entities, accounts, and products identified in this Annex as of the date of signature of the Agreement; or2To remove Entities, accounts, and products that, due to changes in circumstances, no longer present a low risk of being used by U.S. Persons to evade U.S. tax.Any such addition or removal shall be effective on the date of signature of the mutual decision unless otherwise provided therein.BProcedures for reaching a mutual decision described in paragraph A of this section may be included in the mutual agreement or arrangement described in paragraph 6 of Article 3 of the Agreement.IIExempt Beneficial OwnersThe following Entities shall be treated as Non-Reporting Canadian Financial Institutions and as exempt beneficial owners for the purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code:ACentral Bank1The Bank of Canada.BInternational Organizations1A Canadian office of an international organization as defined under paragraph (1) of Section 2 of the Foreign Missions and International Organizations Act.CRetirement Funds1Any plan or arrangement established in Canada and described in paragraph 3 of Article XVIII (Pensions and Annuities) of the Convention, including any plan or arrangement that the Competent Authorities may agree under subparagraph 3(b) of Article XVIII is similar to a plan or arrangement under that subparagraph.DInvestment Entity Wholly Owned by Exempt Beneficial Owners1An Entity that is a Canadian Financial Institution solely because it is an Investment Entity, provided that each direct holder of an Equity Interest in the Entity is an exempt beneficial owner, and each direct holder of a debt interest in such Entity is either a Depository Institution (with respect to a loan made to such Entity) or an exempt beneficial owner.IIIDeemed-Compliant Financial InstitutionsThe following Financial Institutions are Non-Reporting Canadian Financial Institutions that shall be treated as deemed-compliant FFIs for the purposes of section 1471 of the U.S. Internal Revenue Code:AFinancial Institution with a Local Client BaseA Financial Institution that qualifies as a local FFI as described in relevant U.S. Treasury Regulations, applying subparagraphs A(1), A(2) and A(3) of this section in lieu of the relevant paragraphs in those regulations:1Beginning on or before July 1, 2014, the Financial Institution must have policies and procedures, consistent with those set forth in Annex I, to prevent the Financial Institution from providing a Financial Account to any Nonparticipating Financial Institution and to monitor whether the Financial Institution opens or maintains a Financial Account for any Specified U.S. Person who is not a resident of Canada (including a U.S. Person that was a resident of Canada when the Financial Account was opened but subsequently ceases to be a resident of Canada) or any Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not residents of Canada;2Such policies and procedures must provide that if any Financial Account held by a Specified U.S. Person who is not a resident of Canada or by a Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not residents of Canada is identified, the Financial Institution must report such Financial Account as would be required if the Financial Institution were a Reporting Canadian Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account;3With respect to a Preexisting Account held by an individual who is not a resident of Canada or by an Entity, the Financial Institution must review those Preexisting Accounts in accordance with the procedures set forth in Annex I applicable to Preexisting Accounts to identify any Financial Account held by a Specified U.S. Person who is not a resident of Canada, by a Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not residents of Canada, or by a Nonparticipating Financial Institution, and must report such Financial Account as would be required if the Financial Institution were a Reporting Canadian Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account;BLocal BankA Financial Institution that qualifies as a nonregistering local bank as described in relevant U.S. Treasury Regulations, using the following definitions where applicable:1The term bank shall include any Depository Institution to which the Bank Act or the Trust and Loan Companies Act applies, or which is a trust or loan company regulated by a provincial Act; and2The term credit union or similar cooperative credit organization that is operated without profit shall include any credit union or similar cooperative credit organization that is entitled to tax-favored treatment with respect to distributions to its members under Canadian law, including any credit union as defined in subsection 137(6) of the Income Tax Act.CFinancial Institution with Only Low-Value AccountsA Canadian Financial Institution satisfying the following requirements:1The Financial Institution is not an Investment Entity;2No Financial Account maintained by the Financial Institution or any Related Entity has a balance or value in excess of $50,000, applying the rules set forth in Annex I for account aggregation and currency translation; and3The Financial Institution does not have more than $50 million in assets on its balance sheet, and the Financial Institution and any Related Entities, taken together, do not have more than $50 million in total assets on their consolidated or combined balance sheets.DSponsored Investment Entity and Controlled Foreign CorporationA Financial Institution described in subparagraph D(1) or D(2) of this section having a sponsoring entity that complies with the requirements of subparagraph D(3) of this section.1A Financial Institution is a sponsored investment entity if:a)It is an Investment Entity established in Canada that is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations; andb)An Entity has agreed with the Financial Institution to act as a sponsoring entity for the Financial Institution.2A Financial Institution is a sponsored controlled foreign corporation if:a)The Financial Institution is a controlled foreign corporation1 organized under the laws of Canada that is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations;1A controlled foreign corporation means any foreign (i.e., non-U.S.) corporation if more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, or the total value of the stock of such corporation, is owned, or is considered as owned, by “United States shareholders” on any day during the taxable year of such foreign corporation. The term a United States shareholder means, with respect to any foreign corporation, a United States person who owns, or is considered as owning, 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation.b)The Financial Institution is wholly owned, directly or indirectly, by a Reporting U.S. Financial Institution that agrees to act, or requires an affiliate of the Financial Institution to act, as a sponsoring entity for the Financial Institution; andc)The Financial Institution shares a common electronic account system with the sponsoring entity that enables the sponsoring entity to identify all Account Holders and payees of the Financial Institution and to access all account and customer information maintained by the Financial Institution including, but not limited to, customer identification information, customer documentation, account balance, and all payments made to the Account Holder or payee.3The sponsoring entity complies with the following requirements:a)The sponsoring entity is authorized to act on behalf of the Financial Institution (such as a fund manager, trustee, corporate director, or managing partner) to fulfill applicable registration requirements on the IRS FATCA registration website;b)The sponsoring entity has registered as a sponsoring entity with the IRS on the IRS FATCA registration website;c)If the sponsoring entity identifies any U.S. Reportable Accounts with respect to the Financial Institution, the sponsoring entity registers the Financial Institution pursuant to applicable registration requirements on the IRS FATCA registration website on or before the later of December 31, 2015 and the date that is 90 days after such a U.S. Reportable Account is first identified;d)The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, reporting, and other requirements (including providing to any immediate payor the information described in subparagraph 1(e) of Article 4 of the Agreement), that the Financial Institution would have been required to perform if it were a Reporting Canadian Financial Institution;e)The sponsoring entity identifies the Financial Institution and includes the identifying number of the Financial Institution (obtained by following applicable registration requirements on the IRS FATCA registration website) in all reporting completed on the Financial Institution’s behalf; andf)The sponsoring entity has not had its status as a sponsor revoked.ESponsored, Closely Held Investment VehicleA Canadian Financial Institution satisfying the following requirements:1The Financial Institution is a Financial Institution solely because it is an Investment Entity and is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations;2The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Model 1 FFI, or Participating FFI, and is authorized to act on behalf of the Financial Institution (such as a professional manager, trustee, or managing partner);3The Financial Institution does not hold itself out as an investment vehicle for unrelated parties;4Twenty or fewer individuals own all of the debt interests and Equity Interests in the Financial Institution (disregarding debt interests owned by Participating FFIs and deemed-compliant FFIs and Equity Interests owned by an Entity if that Entity owns 100 percent of the Equity Interests in the Financial Institution and is itself a sponsored Financial Institution described in this paragraph E); and5The sponsoring entity complies with the following requirements:a)The sponsoring entity has registered as a sponsoring entity with the IRS on the IRS FATCA registration website;b)The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, reporting, and other requirements (including providing to any immediate payor the information described in subparagraph 1(e) of Article 4 of the Agreement), that the Financial Institution would have been required to perform if it were a Reporting Canadian Financial Institution and retains documentation collected with respect to the Financial Institution for a period of six years;c)The sponsoring entity identifies the Financial Institution in all reporting completed on the Financial Institution’s behalf; andd)The sponsoring entity has not had its status as a sponsor revoked.FRestricted FundA Financial Institution that qualifies as a restricted fund as described in relevant U.S. Treasury Regulations, applying the procedures set forth in, or required under, Annex I in lieu of the procedures set forth in, or required under, Treasury Regulation section 1.1471-4, and applying references to “report” or “reports” in lieu of references in relevant paragraphs in those regulations to “withhold and report” or “withholds and reports”, provided that the Financial Institution provides to any immediate payor the information described in subparagraph 1(e) of Article 4 of the Agreement, or fulfills the requirements described in subparagraph 1(d) of Article 4 of the Agreement, as applicable.GLabour-Sponsored Venture Capital Corporations prescribed under section 6701 of the Income Tax Regulations.HAny Central Cooperative Credit Society as defined in section 2 of the Cooperative Credit Associations Act and whose accounts are maintained for member financial institutions.IAny entity described in paragraph 3 of Article XXI (Exempt Organizations) of the Convention.JAn Investment Entity established in Canada that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions.KSpecial RulesThe following rules apply to an Investment Entity:1With respect to interests in an Investment Entity that is a collective investment vehicle described in paragraph J of this section, the reporting obligations of any Investment Entity (other than a Financial Institution through which interests in the collective investment vehicle are held) shall be deemed fulfilled.2With respect to interests in:a)An Investment Entity established in a Partner Jurisdiction that is regulated as a collective investment vehicle, all of the interests in which (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions; orb)An Investment Entity that is a qualified collective investment vehicle under relevant U.S. Treasury Regulations;the reporting obligations of any Investment Entity that is a Canadian Financial Institution (other than a Financial Institution through which interests in the collective investment vehicle are held) shall be deemed fulfilled.3With respect to interests in an Investment Entity established in Canada that is not described in paragraph J or subparagraph K(2) of this section, consistent with paragraph 3 of Article 5 of the Agreement, the reporting obligations of all other Investment Entities with respect to such interests shall be deemed fulfilled if the information required to be reported by the first-mentioned Investment Entity pursuant to the Agreement with respect to such interests is reported by such Investment Entity or another person.IVAccounts Excluded from Financial AccountsThe following accounts and products established in Canada and maintained by a Canadian Financial Institution shall be treated as excluded from the definition of Financial Accounts, and therefore shall not be treated as U.S. Reportable Accounts under the Agreement:ARegistered Retirement Savings Plans (RRSPs)  —  as defined in subsection 146(1) of the Income Tax Act.BRegistered Retirement Income Funds (RRIFs)  —  as defined in subsection 146.3(1) of the Income Tax Act.CPooled Registered Pension Plans (PRPPs)  —  as defined in subsection 147.5(1) of the Income Tax Act.DRegistered Pension Plans (RPPs)  —  as defined in subsection 248(1) of the Income Tax Act.ETax-Free Savings Accounts (TFSAs)  —  as defined in subsection 146.2(1) of the Income Tax Act.FRegistered Disability Savings Plans (RDSPs)  —  as defined in subsection 146.4(1) of the Income Tax Act.GRegistered Education Savings Plans (RESPs)  —  as defined in subsection 146.1(1) of the Income Tax Act.HDeferred Profit Sharing Plans (DPSPs)  —  as defined in subsection 147(1) of the Income Tax Act.IAgriInvest accounts  —  as defined under “NISA Fund No. 2” and “net income stabilization account” in subsection 248(1) of the Income Tax Act including Quebec’s Agri-Quebec program as prescribed in section 5503 of the Income Tax Regulations.JEligible Funeral Arrangements – as defined under subsection 148.1 of the Income Tax Act.KEscrow Accounts. An account maintained in Canada established in connection with any of the following:1 A court order or judgment.2A sale, exchange, or lease of real or immovable property or of personal or movable property, provided that the account satisfies the following requirements:a)The account is funded solely with a down payment, earnest money, deposit in an amount appropriate to secure an obligation directly related to the transaction, or a similar payment, or is funded with a financial asset that is deposited in the account in connection with the sale, exchange, or lease of the property;b)The account is established and used solely to secure the obligation of the purchaser to pay the purchase price for the property, the seller to pay any contingent liability, or the lessor or lessee to pay for any damages relating to the leased property as agreed under the lease;c)The assets of the account, including the income earned thereon, will be paid or otherwise distributed for the benefit of the purchaser, seller, lessor, or lessee (including to satisfy such person’s obligation) when the property is sold, exchanged, or surrendered, or the lease terminates;d)The account is not a margin or similar account established in connection with a sale or exchange of a financial asset; ande)The account is not associated with a credit card account.3An obligation of a Financial Institution servicing a loan secured by real or immovable property to set aside a portion of a payment solely to facilitate the payment of taxes or insurance related to the real or immovable property at a later time.4An obligation of a Financial Institution solely to facilitate the payment of taxes at a later time.LAn account maintained in Canada and excluded from the definition of Financial Account under an agreement between the United States and another Partner Jurisdiction to facilitate the implementation of FATCA, provided that such account is subject to the same requirements and oversight under the laws of such other Partner Jurisdiction as if such account were established in that Partner Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in that Partner Jurisdiction.