On 24 November 2019 the OECD’s Global Forum released its third annual AEOI implementation report. The Standard on Automatic Exchange of Information (AEOI) outlines the procedure for the automatic exchange of pre-defined financial information between jurisdictions. The information exchanged can then be used for tax risk assessment and to trigger tax investigations, subject to safeguards on privacy.

A commitment process was launched by the Global Forum and 100 jurisdictions committed to the implementation of the AEOI Standard with automatic exchanges of information commencing in 2017 or 2018. In 2018 a total of 90 jurisdictions commenced the automatic exchange of information under the Standard and in 2019 this has increased to 94 jurisdictions exchanging information. The scope of the exchange networks of many jurisdictions also significantly increased in 2019. During 2019 up to the date of the AEOI Report the 94 jurisdictions completed around 6,100 bilateral exchanges of detailed information concerning the financial accounts held by tax residents of their partner jurisdictions.

The Global Forum has reviewed domestic legislative frameworks to ensure compliance with the AEOI Standard and has monitored the international exchange networks to ensure they can meet the commitments made. The emphasis is now on peer reviews to ensure the practical operation of the AEOI Standard.

All the countries and jurisdictions invited to commit to the AEOI Standard have now done so, except the US which exchanges certain information automatically under the Model 1A FATCA intergovernmental agreements.

Progress Made in 2019

In 2019 the Global Forum completed the legal assessments and the test run of tools and processes for assessing the practical effectiveness of the implementation by each jurisdiction of the AEOI Standard. The reviews of implementation of the Standard will be launched in 2020.

The reviews will include assessment of the administrative compliance frameworks put in place by each country to ensure compliance by financial institutions. Feedback will be received from each jurisdiction’s exchange agreement partners in relation to the timeliness and quality of the information received, completeness and conformity to the technical requirements.

Confidentiality assessments will be carried out for the systems used for information exchange to ensure they are in line with the standard on an ongoing basis and can deal with new data security threats.

Following the assessments ratings will be issued of the effectiveness of the practical implementation of the AEOI Standard in each jurisdiction. The legal determinations will be completed in 2020 and the effectiveness ratings are to be published in 2021.