Greenland
This report analyses the implementation of the AEOI Standard in Greenland with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall findings
AEOI legal framework
Greenland’s legal framework implementing the AEOI Standard is in place and is consistent with the requirements of the AEOI Terms of Reference. This includes Greenland’s domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) and its international legal framework to exchange the information with all of Greenland’s Interested Appropriate Partners (CR2).
Effectiveness of AEOI in practice
Greenland’s implementation of the AEOI Standard is on track with respect to the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. This includes ensuring Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1) and exchanging the information in an effective and timely manner (CR2). Greenland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
Overall rating in relation to the effectiveness in practice: On Track
General context
Greenland commenced exchanges under the AEOI Standard in 2018.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Greenland enacted the Government of Greenland Executive Order No. 13 of 30 August 2017 on Identification of and Reporting on Foreign Financial Accounts, pursuant to Section 35 of Greenland Landsting’s Act No. 11 of 2 November of 2016 on administration of taxes. The Government of Greenland Executive Order No. 13 was later amended through the Government of Greenland Executive Order No. 15 of 24 October 2019.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2016. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 1 August 2017 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2017.
Following the initial Global Forum peer review, Greenland amended its legislative framework to address issues identified, effective from 1 January 2020.
With respect to the exchange of information under the AEOI Standard, Greenland:
has the Convention on Mutual Administrative Assistance in Tax Matters in place1 and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2018; and
put in place two bilateral agreements.2
Table 1 sets out the number of Financial Institutions in Greenland that reported information on Financial Accounts in 2021 as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that were related to Controlling Persons, resident in a Reportable Jurisdiction). It also sets out the number of Financial Accounts that they reported in 2021. In this regard, it should be noted that Greenland requires the reporting of Financial Accounts based on a prescribed list of exchange partners and some accounts may be required to be reported more than once (e.g. jointly held accounts or accounts with multiple related Controlling Persons), which is reflected in the figures below. These figures provide key contextual information to the development and implementation of Greenland’s administrative compliance strategy, which is analysed in the subsequent sections of this report.
Table 2 sets out the number of exchange partners to which information was successfully sent by Greenland in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Greenland’s exchanges in practice, which is also analysed in subsequent sections of this report.
In order to provide for the effective implementation of the AEOI Standard, in Greenland:
the Greenlandic Tax Agency (the tax authority) has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Greenland’s exchange partners;
technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by requiring Reporting Financial Institutions to submit reports in XML format using a schema developed based on the OECD CRS XML Schema. The information is validated by the system, at file and record level; and
the Common Transmission System (CTS) is used for the exchange of the information, along with the associated file preparation and encryption requirements.
It should be noted that the review of Greenland’s legal frameworks implementing the AEOI Standard concluded with the determination that Greenland’s domestic and international legal frameworks are In Place. This has been taken into account when reviewing the effectiveness of Greenland’s implementation of the AEOI Standard in practice.
Findings and conclusions on the legal frameworks
The detailed findings and conclusions on the AEOI legal frameworks for Greenland are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Greenland’s domestic legislative framework is in place and contains all of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (SRs 1.1 – 1.3). It also provides for a framework to enforce the requirements (SR 1.4).
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Greenland has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Greenland has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Greenland has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Greenland has a legislative framework in place to enforce the requirements in accordance with the CRS and its Commentary.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Greenland’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Greenland’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Greenland and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Greenland has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Greenland put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Greenland’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Findings and conclusions in relation to effectiveness in practice
The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Greenland are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.
Greenland’s implementation of the AEOI Standard is on track with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures and are therefore reporting complete and accurate information. This includes ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5), and collaborating with exchange partners to ensure effectiveness (SR 1.6). Greenland is encouraged to continue its implementation process to ensure its effectiveness.
SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:
an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:
be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);
include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions;
include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain; and
effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;
effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;
strong measures to ensure that valid self-certifications are always obtained for New Accounts;
effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and
effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.
In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Greenland implemented most of the requirements in accordance with expectations. However, some issues were identified. The key findings were as follows:
Greenland has embedded its strategy to ensure compliance with the AEOI Standard within its general tax compliance strategy, incorporating a dedicated element to ensure compliance with the AEOI Standard. Greenland has based its strategy on a risk assessment that takes into account relevant information sources, such as the information reported by the Reporting Financial Institutions and information from the Danish Tax Agency and Financial Supervisory Authority of Denmark. Such an approach appears suited to the small size of Greenland’s financial sector.
Greenland has worked to understand its population of Financial Institutions, including relevant non-regulated entities, utilising various relevant information sources, such as the Foreign Financial Institution list for FATCA purposes and information from the Danish Financial Supervisory Authority and Tax Agency, and has taken action to ensure they are classifying themselves correctly under its domestic rules and reporting information as required. Greenland intends to keep its understanding of its Financial Institution population up to date on a routine basis.
The Greenlandic Tax Agency appears to have the necessary powers and resources to discharge its functions. With respect to resourcing, Greenland has assigned the equivalent of one full time staff member to monitor and ensure compliance by Reporting Financial Institutions, comprised of various people, including a contact point for the Financial Institutions and people working on related IT tasks. Taking into account the size of Greenland’s financial sector, it appears that the resources assigned are sufficient to implement Greenland’s AEOI Standard compliance strategy.
Greenland’s compliance strategy contemplates activities to verify the completeness and accuracy of the reported information. Greenland has carried out reviews and inspected records held by its Reporting Financial Institutions. Greenland also appears to have activities planned to verify that self-certifications have been obtained as required and to follow up on undocumented accounts when they are reported.
Greenland strategy does not explicitly include activities to ensure that the interaction between its AML and CRS frameworks always results in the identification of Controlling Persons in accordance with the AEOI Standard.
It appears that Greenland has defined procedures to apply sanctions where non-compliance is identified. It also appears that Greenland is ready to take effective action to address circumvention of the requirements if such circumvention is detected.
Greenland plans to review its jurisdiction-specific lists of Non-Reporting Financial Institutions and Excluded Accounts on a risk-based approach to ensure that they continue to pose a low risk of being used for tax evasion purposes.
Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.
Greenland was not able to confirm that it collects and monitors information on the proportion of Financial Accounts that are reported that include information on the Tax Identification Numbers and dates of birth with respect to the individuals associated with them. These data points are key to exchange partners to effectively utilise the information and are important to developing an effective compliance strategy to ensure the AEOI Standard is being effectively implemented.
Greenland reported that, so far, no undocumented accounts have been reported by its Reporting Financial Institutions. However, it is unclear if Greenland collects and monitors information in this regard.
More generally, the exchange partners that received a significant number of records from Greenland indicated that they achieved a success rate when matching the information received from Greenland with their taxpayer database that was broadly equivalent to, or better than, what they usually achieve.
Based on these findings it was concluded that, overall, Greenland is meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. It was also noted that there is room for improvement with respect to the compliance strategy not explicitly covering all relevant areas and the lack of statistics collected to inform the compliance strategy. Greenland is therefore encouraged to continue its implementation process accordingly, including by addressing the recommendations made.
Greenland should continue to implement its compliance strategy.
Greenland should actively monitor the interaction between its AML and CRS frameworks to ensure that the collection and reporting of information under the AEOI Standard is in accordance with the requirements.
Greenland should implement systems to collect and monitor information on the reporting of Tax Identification Numbers, dates of birth and undocumented accounts to inform its compliance strategy.
SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:
use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and
have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.
In order to collaborate on compliance and enforcement, it appears that Greenland implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) in accordance with expectations. While no such notifications have yet been received, Greenland has the necessary systems and procedures to process them as required. It also appears that Greenland will notify its partners effectively of errors or suspected non-compliance it identifies when utilising the information received.
Based on these findings it was concluded that Greenland is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Greenland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.
Greenland’s implementation of the AEOI Standard is on track with respect to exchanging the information effectively in practice, including in relation to sorting, preparing and validating the information (SR 2.4), correctly transmitting the information in a timely manner (SRs 2.5 – 2.8) and providing corrections, amendments or additions to the information (SR 2.9). Greenland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).
One exchange partner highlighted a particular issue with respect to preparation and format of the information sent by Greenland. This issue related to the rejection of the files. None of Greenland’s exchange partners reported rejecting more than 25% of the files received. It was also noted that Greenland has already successfully addressed the issue raised.
Based on these findings it was concluded that Greenland is fully meeting expectations in relation to sorting, preparing and validating the information. Greenland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.
In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Greenland linked to the CTS.
Based on these findings it was concluded that Greenland is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Greenland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.
One exchange partner highlighted delays in the sending of information by Greenland. It was noted that Greenland successfully addressed the issue and sent the information as soon as possible thereafter.
Based on these findings it was concluded that Greenland is fully expectations in relation to exchanging the information in a timely manner. Greenland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.7 Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.
Feedback from Greenland’s exchange partners did not raise any concerns with respect to Greenland’s use of the agreed transmission methods and therefore with Greenland’s implementation of this requirement.
Based on these findings it was concluded that Greenland is fully meeting expectations in relation to sending the information in accordance with the agreed transmission methods and encryption standards. Greenland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.
Three exchange partners highlighted delays in the sending of status messages by Greenland, representing 3% of its partners. It was noted that Greenland has successfully addressed one of the issues and is taking steps to address the remaining ones to ensure that status messages are sent in accordance with the requirements. Greenland has not yet sent status messages that were due to be sent in prior years, although Greenland reports that this is due to the upgrade in the XML Schema.
Based on these findings it was concluded that, overall, Greenland is meeting expectations in relation to the receipt of the information. It was also noted that there is room for improvement with respect to the sending of CRS status messages in a timely manner. Greenland is encouraged to continue to ensure the ongoing effectiveness of its implementation, including by addressing the recommendation made.
Greenland should ensure it sends status messages to all of its exchange partners in a timely manner.
SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.
Greenland appears ready to respond to notifications and to provide corrected, amended or additional information in a timely manner and no such concerns were raised by Greenland’s exchange partners and therefore with respect to Greenland’s implementation of these requirements.
Based on these findings it was concluded that Greenland appears to be meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Greenland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
Assessed jurisdiction’s comments on the assessment of effectiveness in practice
Greenland is actively looking to improve and therefore welcomes the recommendations given in this report.
Furthermore Greenland apologises to the jurisdictions which are experiencing problems with exchange between our jurisdictions. The Greenlandic system is very much based on manual work and therefore the system is a bit more prone to errors.