The Council’s Portal Eases Compliance
The Council has launched its FATCA compliance Internet portal, W8BENE.com, which allows for one-stop submission of Foreign Account Tax Compliance Act forms from all participating carriers and for one-stop collection and tracking of those forms by participating brokers.
FATCA generally requires a person (known as a “withholding agent”) to withhold 30% of a premium payment unless he or she gathers documentation showing the payee is a United States taxpayer (using the IRS W-9 form), FATCA-compliant or FATCA-exempt (usually with the IRS W-8BEN-E form). FATCA creates a choice for compliance: If a carrier cannot (or will not) demonstrate it is either FATCA-compliant or FATCA-exempt, then you cannot do business with it (because making 70% of a premium payment will not bind the coverage).
W8BENE.com is intended as an industry-wide solution that should ease the compliance burdens for both brokers and carriers.
Use of the portal enables a participating carrier to submit its form to any broker seeking to do business with that carrier with a single keystroke. It eliminates the administrative nightmare of each broker trying to obtain the requisite forms carrier by carrier.
If a carrier replaces or updates its compliance forms for any reason, each broker that previously has accessed that carrier’s form(s) will be notified of the change, thus minimizing the potential administrative burdens for carriers. The portal also will notify participating carriers when the regulatory time frame for use of the form on file is nearing expiration.
On the broker side, W8BENE.com allows each participating broker to go to a single repository to confirm that a carrier is FATCA-compliant or FATCA-exempt and to download the appropriate FATCA form. Although each broker must review each form to ensure there is nothing the broker knows to be incorrect, participating brokers have a bolstered compliance protocol for several reasons:
- Brokers can access the portal during the quotation process to ensure quotes are solicited only from carriers that can demonstrate that they are FATCA compliant or exempt.
- Carrier forms are pre-screened by portal administrators to ensure they are facially compliant (verifying all of the requisite fields are filled out and the forms are signed and dated, etc.). If a form appears to be facially incomplete or invalid for any reason, the portal administrator will contact the carrier to resolve any issues.
- If any other participating broker identifies potential form errors, either they are resolved by the administrators or all brokers who have accessed the form previously are informed of the issue. A note will be added to notify any future users of the potential problem.
- The portal and its administrators also manage the carrier form update and replacement process and notify any brokers who previously accessed a form that it has been updated or replaced.
Search functions built into the platform allow a broker to locate a participating carrier by company name, holding company name and country. Once a broker selects an insurer, it can view certain information about the insurer’s form (e.g., the date the form was uploaded and the person who uploaded it) and download a current form in PDF. The portal also updates a log every time the user accesses the database and records which carrier forms are reviewed. This information is used to push out form update information and also can be a valuable tool if your firm is audited.
- The withholding agent/broker remains fully responsible for making sure FATCA forms satisfy regulatory requirements.
- The withholding agent/broker must have access to agency books, records and personnel related to or involved in the collection and use of FATCA documentation.
- Users must have easy access to the requisite FATCA documentation.
- A withholding agent/broker must be able to easily transmit to the agent any facts the agent/broker becomes aware of that might affect the reliability of the documentation. They must be able to establish that the transmitted data was processed and due diligence was performed.
- The agent must have a system to ensure the information it receives about the reliability of documentation or its FATCA status is provided to all withholding agents.
Agents must also have a process in place to verify a company actually submitted its FATCA documentation. The portal administrator will verify submissions through emails and/or telephone calls. Carriers’ portal usage fee payments also will provide verification.
Representatives from The Council met in September with staff members from the IRS and Treasury Department who are overseeing FATCA’s implementation to discuss portal-related questions and concerns. After walking the government staffers through the portal and showing them its functionality, they had no objections or concerns regarding use of the portal. That is perhaps as strong an endorsement as we can get.