UAE Risk Assessment Questionnaire for FATCA and CRS Compliance

The risk self-assessment questionnaire is a tool that the UAE Ministry of Finance uses to assess the compliance level of the UAE reporting financial institutions (RFIs) with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements. The questionnaire is mandatory for all UAE RFIs that are registered on the FATCA/CRS system and have reporting obligations for the relevant reporting year. The questionnaire aims to identify the potential risks and challenges the UAE RFIs face in implementing the FATCA and CRS rules and provide guidance and support to improve their compliance performance.

What are the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements?

FATCA and CRS are two regimes for the automatic exchange of information (AEOI) between different jurisdictions for tax purposes. FATCA stands for Foreign Account Tax Compliance Act and applies to the exchange of information between the UAE and the US. CRS stands for Common Reporting Standard and applies to the exchange of information between the UAE and other participating countries.

Under these regimes, UAE reporting financial institutions (RFIs) are required to identify and report certain information about their account holders and/or controlling persons to the UAE Ministry of Finance (MoF) annually. The UAE MoF then exchanges the information with the relevant foreign tax authorities.

The UAE has issued laws and regulations to implement FATCA and CRS in the UAE, as well as guidance and policy manuals for the RFIs. The RFIs also need to register on the CRS/FATCA system and submit data and risk assessment by the stipulated deadlines.

Who should complete the Questionnaire?

• According to the UAE Ministry of Finance, all UAE reporting financial institutions registered on the Ministry of Finance FATCA/CRS system for that reporting year are required to complete a risk assessment questionnaire by the stipulated deadline for each compliance type (i.e., FATCA and/or CRS). This applies to banks, insurance companies, investment funds, and other financial entities that are subject to the reporting obligations under FATCA and CRS.
• If a UAE RFI is subject to more than one UAE Regulatory Authority (“RA”), it must submit a separate Risk Assessment Questionnaire (within the relevant ‘Groups’) for FATCA and/or CRS, depending on its obligations.
• The FATCA and CRS Risk Assessment Questionnaires can be filled out by an Administrator, Maker, or Maker+ Checker user in each Group. This is known as the ‘Maker’ Action. Then, a different Administrator, Checker, or Maker+ Checker user must review the questionnaire and either ‘Accept’ or ‘Reject’ it. This is called the ‘Checker’ action.

It is important to note that the same user cannot perform both the ‘Maker’ and ‘Checker’ actions. That is, different users must carry out different actions.

How to fill out the questionnaire?

The questionnaire can be accessed through the FATCA/CRS system, which is an online portal that the UAE Ministry of Finance provides for the UAE RFIs to register, submit, and manage their FATCA and CRS reports. To fill out the risk assessment questionnaire, you need to follow these steps:

• Log in to the FATCA/CRS system with your user credentials and select the group to which you want to submit the questionnaire.
• Select “Risk Assessments” > “Submit a risk assessment” from the menu.
• Select the relevant report type (FATCA or CRS) and reporting period.
• Answer all the questions in the questionnaire and provide any additional information or comments as required.
• Click “Save” to save your progress or “Check” to validate your answers.
• Once you have checked your answers, click “Complete Checking” to submit the questionnaire to the regulatory authorities for review. You will not be able to edit the questionnaire after this step.
• If you need to make any changes to the questionnaire after submitting it, you can click “Send Back to Maker” and edit the questionnaire again. You will need to repeat the checking and submission process afterward.

How to submit the questionnaire?

The questionnaire is only considered complete when the user has clicked “Complete Checking”, after which the questionnaire will be submitted to the RA for review. 

The user must ensure that the questionnaire is submitted by the stipulated deadline. The FATCA/CRS system does not allow for late submission of the questionnaire, and failure to do so may result in penalties and sanctions by the RA. The user can track the status of the questionnaire on the FATCA/CRS system and receive feedback from the RA.

How Farahat & Co. can assist with the risk self-assessment

Farahat & Co. is a leading Tax consultant in UAE, with extensive experience and expertise in FATCA and CRS compliance. Farahat & Co. can assist UAE RFIs with the following services related to risk self-assessment:

• Conducting a gap analysis and a risk assessment of the UAE RFI’s current FATCA and CRS compliance framework, and providing recommendations for improvement.
• Developing and implementing policies, procedures, and controls for FATCA and CRS compliance, and ensuring alignment with the MoF’s regulations and guidance.
• Performing due diligence and data validation on the UAE RFI’s reportable accounts and investors, and ensuring accuracy and completeness of the information.
• Preparing and submitting the risk self-assessment questionnaire on behalf of the UAE RFI, and liaising with the MoF and the regulatory authorities as required.
• Conducting internal and external audits and reviews on the UAE RFI’s FATCA and CRS compliance, and providing assurance and remediation services.

Farahat & Co. can help UAE RFIs achieve and maintain compliance with FATCA and CRS, and reduce their risk exposure and compliance costs. Farahat & Co. can also help UAE RFIs leverage the benefits of FATCA and CRS, such as enhancing their reputation, attracting more customers and investors, and facilitating cross-border transactions.

Conclusion

The risk self-assessment questionnaire is an important part of the FATCA and CRS compliance process in the UAE. The UAE RFIs should complete the questionnaire carefully and timely, and follow the instructions and guidance provided by the UAE Ministry of Finance and the RA. The questionnaire is a valuable opportunity for the UAE RFIs to evaluate their compliance level, identify their strengths and weaknesses, and implement the necessary improvements and corrective actions. By doing so, the UAE RFIs can demonstrate their commitment to the FATCA and CRS standards and enhance their reputation and trustworthiness in the global financial market.