6. Due diligence procedures

(1) Subject to this Regulation, a reporting financial institution shall, in order to identify reportable accounts maintained by the institution, apply the due diligence procedures, and comply with the rules, set out in sections II to VII of Annex I, and the rules set out in Annex II, to the Directive.

(2) A reporting financial institution may——

(a) with respect to pre-existing accounts, apply the due diligence procedures relating to new accounts as set out in sections II to VII of Annex I to the Directive to those pre-existing accounts, and

(b) with respect to lower value accounts, apply the due diligence procedures relating to high value accounts as set out in sections II to VII of Annex I to the Directive to those lower value accounts.

(3) Notwithstanding the fact that a reporting financial institution applies the procedures referred to at paragraph (2)(a) to a pre-existing account, the rules specified for pre-existing accounts in sections I(C) and V(A) of Annex I to the Directive shall also continue to apply to that account.

(4) (a) Where a reporting financial institution has applied the due diligence procedure set out in subparagraph B(1) of section III of Annex I to the Directive and there is a change in circumstances that causes a reporting financial institution to know, or have reason to know, that the original documentary evidence or other equivalent documentation is incorrect or unreliable, a reporting financial institution shall obtain a self-certification and new documentary evidence to establish the residence for tax purposes of the account holder by the later of the last day of the calendar year or 90 calendar days following the notice or discovery of such change in circumstances.

(b) Where a reporting financial institution fails to obtain a self-certification and new documentary evidence as described in paragraph (a), the reporting financial institution shall apply the electronic record search procedure specified in subparagraphs B(2) to B(6) of section III of Annex I to the Directive.

(5) A reporting financial institution may, with respect to pre-existing entity accounts, use, as documentary evidence, an entity classification determined, based on a standardised industry coding system provided that—

(a) the information was recorded by the reporting financial institution consistent with its normal business practices for the purposes of AML/KYC procedures or other regulatory purposes (other than tax purposes),

(b) the standardised industry coding system was in place prior to the date the financial account was identified as a pre-existing account, and

(c) the reporting financial institution does not know, or does not have reason to know, that such classification is incorrect or unreliable.

(6) With respect to new entity accounts and for the purposes of determining whether a controlling person of a passive NFE is a reportable person, a reporting financial institution may only rely on a self-certification from either the account holder or the controlling person.

(7) (a) An account shall be treated as a reportable account from the date it is identified as such pursuant to the due diligence procedures in sections II to VII of Annex I to the Directive, and

(b) unless otherwise provided for by these Regulations, information with respect to a reportable account shall be reported annually in the calendar year following the year to which the information relates.

(8) Where an amount is referred to in US$ in sections II to VII of Annex I to the Directive, a reporting financial institution may use an equivalent amount in Euro, converted using a published spot rate determined as of the last day of the calendar year preceding the year in which the due diligence procedures are being applied.

(9) A reporting financial institution shall implement arrangements to obtain the information required under Regulation 3(2) in respect of each reportable account.

(10) Information obtained by a reporting financial institution solely for the purpose of reporting under these Regulations shall not be used for any other purpose.