Overall findings
Jamaica’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Jamaica’s international legal framework to exchange the information with all of Jamaica’s Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has deficiencies significant to the proper functioning of elements of the AEOI Standard. More specifically, the deficiencies relate to defining certain Entities subject to due diligence and the enforcement framework.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall determination on the legal framework: In Place But Needs Improvement
Conclusions on the legal framework
General context
Jamaica commenced exchanges under the AEOI Standard in 2022.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Jamaica relies on:
the Revenue Administration Act 1985, as amended; and
the Revenue Administration (Convention on Mutual Administrative Assistance in Tax Matters) Regulations, 2020.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2021. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete due diligence procedures on High Value Individual Accounts by 31 December 2021 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2022.
With respect to the exchange of information under the AEOI Standard, Jamaica is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2022.
Detailed findings
The detailed findings for Jamaica are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex B).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Overall determination on the legal framework: In Place But Needs Improvement
Jamaica’s domestic legislative framework is in place and contains many of the key aspects of CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the scope of Reporting Financial Institutions required to report information (SR 1.1), the due diligence procedures that must be applied to Financial Accounts (SR 1.2) and the framework to enforce the requirements (SR 1.4). Most significantly, Jamaica’s domestic legislative framework does not define the terms Investment Entity and Controlling Persons in accordance with the requirements and there are deficiencies in Jamaica’s enforcement framework.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Jamaica has defined the scope of Reporting Financial Institutions in its domestic legislative framework in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Jamaica’s legislative framework does not define Investment Entity in accordance with the requirements. The definition of Investment Entity is a key element of the AEOI Standard and is therefore material to its proper functioning.
Recommendations:
Jamaica should amend its definition of Investment Entity to exclude certain categories of Active NFE, as required by the AEOI Standard.
Jamaica should ensure that the interpretation of Investment Entity is consistent with similar language defining “Financial Institution” in the Financial Action Task Force Recommendations.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Jamaica has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and has incorporated the due diligence procedures that must be applied to identify them in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, Jamaica’s legislative framework does not define Controlling Persons in accordance with the requirements.
Recommendation:
Jamaica should amend its domestic legislative framework to ensure that “Controlling Person” is defined in accordance with the AEOI Standard.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Jamaica has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Jamaica has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Jamaica’s legislative framework has an anti-circumvention rule that does not cover all relevant persons that may engage in practices to avoid due diligence and reporting, and Jamaica does not include an explicit basis to impose or enforce a sanction where a Reporting Financial Institution is a legal arrangement. These are the key elements of the required enforcement framework and are therefore material to the proper functioning of the AEOI Standard.
Recommendations:
Jamaica should ensure that its anti-avoidance rule covers avoidance of CRS reporting and due diligence when entered into by Account Holders or intermediaries, not just by Financial Institutions.
Jamaica should amend its legislative framework to ensure there is an explicit legal basis to enforce a sanction when there is non-compliance by a Reporting Financial Institution that is a legal arrangement.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Determination: In Place
Jamaica’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Jamaica’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Jamaica and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Jamaica has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
Recommendations:
No recommendations made.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Jamaica put in place its exchange agreements without undue delay.
Recommendations:
No recommendations made.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Jamaica’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Recommendations:
No recommendations made.
Comments by the assessed jurisdiction
No comments made.