KUWAIT CITY, Jan 13: The Fatwa and Legislation Department has submitted to the Council of Ministers a draft law that allows banks to declassify the data of their customers, as provided by the CRS Convention on Join Reporting, reports Al-Rai daily quoting sources.
The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange of Information (AEOI) regarding bank accounts on a global level, between tax authorities, which the Organization for Economic Co-operation and Development (OECD) developed in 2014.
Its purpose is to combat tax evasion. The sources pointed out that the Ministry of Finance had notified the Fatwa that it had recently received a question from the banks about whether there was a legal cover to provide the required information, stressing that it cannot submit any reports without legal cover so as not to interpret the step as a violation of bank secrecy.
The sources said that the Finance Ministry later agreed with the Department on the preparation of a bill, including the terms of the proposed agreement, and forwarded to the Council of Ministers in order to gain time, the government to decide the final position in this regard, whether to refer the bill to the National Assembly, or take what it sees as an appropriate measure to ensure that Kuwait is not subject to international sanctions.
Sources pointed out that the move of the Ministry of Finance and the Fatwa and Legislation Department towards the preparation of a bill came in order to close the file, which consumed more time than is worth, noting that “the move will reassure banks, in conjunction with the ministry’s commitment to the deadline to submit CRS reports on Joint Reporting, which was set no later than Nov 1, and was postponed in agreement with the OECD.
The Joint Reporting Agreement requires procedures to apply the Joint Disclosure Standard for the exchange of information for tax purposes to financial institutions operating in Kuwait and to collect reports of certain data relating to their accountants on the grounds of residence for tax purposes. This information includes the name and number of the legal person’s account, address, special identification number for tax purposes, account balance, and special identifi- cation number for tax purposes.