1. Monitoring and reviewing the implementation of the AEOI Standard – the results
123 jurisdictions, including developed and developing countries, have either commenced exchanges under the AEOI Standard or are set to do so in the near future. Maximising the benefits that the AEOI Standard has to offer is ensured through its widespread and effective implementation. This is delivered through the Global Forum’s monitoring and review processes, as well as through its capacity building programme.
The OECD, working with G20 countries, developed the AEOI Standard in 2014. The G20 then asked the Global Forum to monitor the implementation of the AEOI Standard worldwide. As a first step, the Global Forum initiated a commitment process to ensure the widespread implementation of the AEOI Standard.
The Global Forum quickly put in place a commitment process to ensure the widespread implementation of the AEOI Standard. All of its members, except for developing countries that did not host a financial centre, were invited to commit to implement the AEOI Standard to specific timelines. This led to 100 jurisdictions committing to:
exchange information with all Interested Appropriate Partners (which are all jurisdictions interested in receiving information from a jurisdiction and that meet the expected standards in relation to confidentiality and data safeguards); and
A total of 23 additional jurisdictions have subsequently committed to implement the AEOI Standard, with commencement dates ranging from 2019 to 2026. This includes developing countries not asked to commit to the AEOI Standard but that wish to access the benefits it has to offer and jurisdictions identified through the Global Forum’s “jurisdiction of relevance” process, established to maintain a level playing field.
Once commitments are made, the Global Forum monitors the timeliness of the delivery of each aspect of the implementation process. These include:
putting in place a domestic legislative framework requiring Financial Institutions to collect and report the information for exchange, in accordance with the due diligence and reporting rules contained in the AEOI Standard;
putting in place an international legal framework that allows the automatic exchange of information with a jurisdiction’s exchange partners, which includes an underlying legal basis for exchange and an administrative agreement containing the detailed specificities. In the overwhelming majority of cases the multilateral frameworks are used; the multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention) and the associated Multilateral Competent Authority Agreement (MCAA); and
establishing a technical infrastructure to receive the information from Financial Institutions and to process and transmit it to exchange partners. All jurisdictions use the Common Transmission System (CTS), procured by the OECD and managed by the Global Forum, to transmit the information.
In addition, both before and after jurisdictions receive information from their partners, their confidentiality and data safeguards frameworks are assessed to provide assurance that the information will be kept safe and only be used for the purposes agreed with each partner. Where substantive issues are identified, they must be addressed to receive, or continue to receive, information.
Delivery of the commitments
Table 1.1 presents details of the numbers of partners to which information was successfully sent by each implementing jurisdiction from 2018 to 2023. The data presented includes jurisdictions that received information as well as all instances where the necessary (domestic and international) legal frameworks were in place containing an obligation on Reporting Financial Institutions to report information with respect to tax residents of an exchange partner, but where no relevant Reportable Accounts were identified in practice (i.e. essentially a nil return).
97% of jurisdictions have delivered their commitment to exchange information under the AEOI Standard.
Jurisdictions yet to commence exchanges as committed to
As set out above, the overwhelming majority (97%) of the jurisdictions that have committed to commence exchanges under the AEOI Standard have done so. This is a huge success.
There are nevertheless some jurisdictions that were invited to commence exchanges from a certain date, either under the original commitment process (Trinidad and Tobago, committed to commence exchanges from 2018) or identified later through the Global Forum’s jurisdictions of relevance process (Jordan and Montenegro, committed to commence exchanges from 2023) that have not yet delivered on the commitments made.
A fully effective AEOI Standard requires a level playing field and the Global Forum therefore continues to work closely with these jurisdictions to facilitate the delivery of their commitments.
While the timeliness of implementation is critical, the potential benefits of the AEOI Standard will only be fully delivered if all of the requirements are implemented in a complete and effective manner. To ensure this, the Global Forum conducts peer reviews with respect to the quality of the implementation of all aspects of the AEOI Standard. Conclusions are drawn on the completeness of the domestic and international legal frameworks and on the effectiveness in practice of the domestic collection of the information and its international exchange.
Below is an analysis of the peer review results to date after which the results are set out in full.
An analysis of the peer review results to date
The results of the reviews of the AEOI legal frameworks
Chapter 3 of this report contains three new reports on the AEOI legal frameworks, for the jurisdictions that committed to commence exchanges from 2021 (Albania, Ecuador and Kazakhstan). It also contains revised reports for ten jurisdictions that underwent a reassessment as they amended their legal frameworks, including to address recommendations made. This brings the total number of jurisdictions that have brought in amendments to address recommendations made through the Global Forum peer reviews to 78, with 611 recommendations having been successfully addressed. This includes 111 Non-Reporting Financial Institutions and Excluded Accounts being removed from jurisdiction-specific lists as they were found to insufficiently meet the requirements.
The peer review results show that there is a very high level of compliance in relation to the legal frameworks put in place to implement the AEOI Standard. Of the 109 jurisdictions committed to commencing exchanges by 2021, virtually all of them (108, or 99%) have an international legal framework that is fully in accordance with the AEOI Terms of Reference. The Global Forum has therefore issued them with a determination of “In Place” for Core Requirement 2. Furthermore, the majority of jurisdictions (73, or 70%) have domestic legislative frameworks that are also fully in accordance with the AEOI Terms of Reference. The Global Forum has therefore issued these jurisdictions with a determination of “In Place” for Core Requirement 1. 73, or 70% of jurisdictions therefore received an overall determination of “In Place”.
By far the next largest group of jurisdictions 30 (or 28%) are those for which the Global Forum issued a determination of “In Place” for Core Requirement 2 and “In Place But Needs Improvement” for Core Requirement 1. Their peer review reports include one or more recommendations to amend their domestic legislative framework in order for it to be fully consistent with the AEOI Terms of Reference. Consequently, 30 (or 28%) jurisdictions received an overall determination of “In Place But Needs Improvement”. In total, 103 (or 94%) of the jurisdictions now have domestic and international legal frameworks that are fully or substantially in place. This demonstrates a high level of compliance with the Terms of Reference.
Following the actions taken, 94% of jurisdictions have now been determined to have domestic and international legal frameworks that are fully or substantially in accordance with the AEOI Terms of Reference
Of the remaining jurisdictions, five have implemented a domestic legislative framework which contains many of the requirements, but that include significant deficiencies. One jurisdiction (Trinidad and Tobago) has not yet implemented a domestic legal framework. Six jurisdictions have therefore received an overall determination of “Not In Place”. Figure 2.1 summarise the distribution of the peer review results.
Common issues identified
While compliance with the requirements is generally high, there are some common issues where recommendations remain. They most commonly relate to the following:
The largest category of remaining recommendations relate to jurisdiction-specific Non-Reporting Financial Institutions and Excluded Accounts that are not in accordance with the requirements of the AEOI Standard.
The legal frameworks for compliance and enforcement have also been found to have issues in a number of cases. These include gap in the powers to address avoidance of the due diligence and reporting requirements, the ability to impose sanctions on Account Holders and Controlling Persons for submitting false self-certifications and having record-keeping obligations that cover the full scope of the records required to be kept under the AEOI Standard. Their significance is reflected in the fact that all of the jurisdictions with legal frameworks that have been determined to be “Not In Place” have multiple recommendations with respect to their legal frameworks for compliance and enforcement.
Several more specific recommendations have also been made in cases where jurisdictions have summarised the detailed definitions in the AEOI Standard with the omission of relevant details that are needed to ensure their full and proper operation.
The Global Forum continues to work with the jurisdictions concerned to assist them in addressing the issues where recommendations have been made.
The results of the reviews of the effectiveness in practice
Chapter 3 of this report contains two new initial review reports on the effectiveness in practice of the jurisdictions that committed to commence exchanges from 2019 (Ghana and Kuwait).
Overall, the results of the initial reviews show that most jurisdictions are delivering as expected. In this regard it should be noted that the initial reviews are conducted in parallel to the implementation of the AEOI Standard by jurisdictions. Significant advancements therefore continue to be made. As of now, almost two thirds (65, or 64%) of the 101 jurisdictions that committed to commence exchanges in 2017, 2018 or 2019 have been rated as “On Track” with respect to their frameworks and activities to ensure the effectiveness of the AEOI Standard in practice. They have therefore been found to have developed complete administrative compliance frameworks to ensure that Financial Institutions effectively implement their due diligence and reporting obligations, which they are also implementing, and they are successfully conducting the exchanges in practice, addressing any issues as they emerge. A further 16 (or 16%) jurisdictions have been found to have credible frameworks and plans in place and are generally successfully exchanging the information in accordance with the technical requirements, but need to further implement their plans. These jurisdictions have therefore been rated as “Partially Compliant”. It is expected that the implementation in many of these jurisdictions will generally become much more mature in the near future, based on the plans they have in place. Finally, 20 (or 20%) jurisdictions have been found to have fundamental deficiencies in their frameworks (i.e. they are not yet fully developed) and have therefore been found to be “Non-Compliant”, six of which are constrained due to their lack of enforcement powers in their legislative frameworks. So, while the exchanges are taking place each year, they have not yet completed operational frameworks to verify that Financial Institutions are effectively complying with all of the due diligence and reporting requirements.
Figure 2.2 summarise the distribution of the peer review results.
In general, the rate of advancement and the increasing maturity in implementation continues at pace. Building on a steady improvement over the previous years, two-thirds of jurisdictions have again, over the last year, seen improvements in their ability to match the information received. This indicates an increase in the quality of the information being sent. In this regard, over the last three years, three-quarters of jurisdictions have seen improvements in the collection of Tax Identification Numbers, as well as reductions in the numbers of undocumented accounts reported. Furthermore, the rate of the collection and exchange of dates of birth is close to 100%. As regards the exchanges themselves, delays in the exchanges are relatively rare and have decreased by another quarter for the 2022 reporting period. Two-thirds of jurisdictions showed improvements in the preparation of the files, resulting in considerably fewer rejections being experienced.
Common issues identified
While around two thirds of jurisdictions assessed have been found to be “On Track” with their implementation, amongst the other jurisdictions, several common issues were identified.
The most significant issues identified relate to jurisdictions that have been delayed in putting in place a complete and credible operational plan to ensure compliance with the requirements by Financial Institutions. In many cases some activities had been conducted to ensure Financial Institutions are reporting information (e.g. by cross checking relevant lists of regulated entities), but there has been limited activities to ensure that the information being reported is complete and accurate. These jurisdictions generally understood the deficiencies identified. Furthermore, support is being given by the Global Forum Secretariat, which has developed a Model Administrative Compliance Strategy, organised knowledge-sharing events and recently released additional tools to support its bilateral technical assistance programme. It is therefore expected that these issues be successfully addressed in the near term. Jurisdictions that need to address constraints in their legal frameworks to enforce the requirements will generally take longer.
There is another group of jurisdictions that have credible plans in place but that have only very recently started implementing them. For example, the checks to ensure that the information being reported is complete and accurate is not yet very mature, such as being limited to analysing the information reported but not yet including reviewing the policies, procedures and documentation of individual Financial Institutions. These jurisdictions often already have credible plans in place, so will deepen the checks in the near future.
With respect to the exchanges in practice, the level of implementation has been very high and, where issues emerge, they are generally promptly addressed.
A summary of the peer reviews to date
Table 1.3 contains a summary of the determinations made with respect to legal frameworks introduced by each jurisdiction to implement the AEOI Standard and the ratings made following the initial review of the effectiveness of their implementation in practice. Further details on the analysis and reasons for the determinations for each jurisdiction can be found in Peer Review of the Automatic Exchange of Financial Account Information 2022 (https://doi.org/10.1787/36e7cded-en) and in Chapter 3 of this report for assessments and reassessments completed after the publication of the 2022 report.
The second round of AEOI effectiveness reviews
With the completion of the initial peer reviews of the effectiveness of the implementation of the AEOI Standard for the first 99 jurisdictions, the Global Forum put in place a framework to carry out a second round of AEOI effectiveness reviews. Further details of the framework can be found in Chapter 2. The results are due to be published in 2025.