Overall findings
Sint Maarten’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements in the AEOI Terms of Reference. While Sint Maarten’s international legal framework to exchange the information with all of Sint Maarten’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, deficiencies have been identified in relation to the scope of Financial Accounts and there are deficiencies in 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
Sint Maarten committed to commence the exchanges under the AEOI Standard on a non-reciprocal basis in 2018 (i.e. it will send but not receive information), although was delayed in delivering its commitment and is expecting to commence exchanges in September 2022.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Sint Maarten:
enacted amendments to the General National Ordinance on National Taxes (amended by National Ordinance No. 48 of 2020); and
introduced National Decree No. 77 of 2021, in force from 31 January 2022 and with retroactive effect from 1 January 2018.
Under this framework Reporting Financial Institutions were required to apply the due diligence procedures in relation to New Accounts from 1 January 2018. With respect to Preexisting Accounts, Reporting Financial Institutions were required to apply the due diligence procedures on Preexisting Individual Accounts and Entity Accounts by 31 December 2018.
With respect to the exchange of the information under the AEOI Standard, Sint Maarten has the Convention on Mutual Administrative Assistance in Tax Matters1 in place, which entered into force from 10 October 2010, and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2022.
In order to provide for the effective implementation of the AEOI Standard, in Sint Maarten:
the Sint Maarten’s Competent Authority for purposes of the AEOI Standard has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Sint Maarten’s exchange partners;
technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place through the Multi Data Exchange System; and
the Common Transmission System (CTS) will be used to carry out the exchanges of information, along with the associated file preparation and encryption requirements.
Detailed findings
The detailed findings for Sint Maarten 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.
Determination: In Place But Needs Improvement
Sint Maarten’s domestic legislative framework is in place and contains most of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to 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, Sint Maarten’s legislative framework does not fully incorporate the definition and processes related to the identification of Controlling Persons of trusts and similar arrangements.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Sint Maarten has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
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.
Sint Maarten has defined the Financial Accounts that are required to be reported in its domestic legislative framework and 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, deficiencies have been identified. Most significantly, Sint Maarten’s legislative framework:
does not incorporate the definition of Documentary Evidence in accordance with the CRS and its relevant Commentary; and
does not fully incorporate the definition of Controlling Persons as required and does not fully incorporate the due diligence procedures to identify Controlling Persons.
The due diligence procedures are material to the proper functioning of the AEOI Standard.
Recommendations:
Sint Maarten should amend its domestic legislative framework to require Reporting Financial Institutions to always identify and determine the reportable status of the Controlling Persons of trusts and similar legal arrangements in accordance with the AEOI Standard.
Sint Maarten should amend its domestic legislative framework to ensure that its Financial Institutions apply the definition of Controlling Persons in the AEOI Standard.
Sint Maarten should amend its domestic legislative framework to require Reporting Financial Institutions to only use Documentary Evidence in relation to the due diligence procedures for Preexisting Entity Accounts in accordance with the conditions in the AEOI Standard.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Sint Maarten 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.
Sint Maarten 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, Sint Maarten’s legislative framework:
does not include rules to prevent all relevant persons (including Reporting Financial Institutions, other persons and intermediaries) from adopting any practices intended to circumvent the reporting and due diligence procedures as required;
does not impose sanctions on Account Holders and Controlling Persons for the provision of a false self-certification; and
only has sanctions for noncompliance where it is intentional or due to gross negligence, which does not cover a sufficiently broad range of behaviours causing noncompliance.
These are the key elements of the required enforcement framework relates to and are therefore material to the proper functioning of the AEOI Standard.
Recommendations:
Sint Maarten should amend its legislative framework to prevent Financial Institutions, intermediaries and other persons from adopting practices intended to circumvent the reporting and due diligence procedures.
Sint Maarten should amend its domestic legislative framework to include sanctions on Account Holders and Controlling Persons for the provision of a false self-certification.
Sint Maarten should amend its domestic legislative framework to ensure that sanctions are not limited to noncompliance that is intentional or due to gross negligence.
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
Sint Maarten’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 Sint Maarten’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Sint Maarten 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.
Sint Maarten 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.
Sint Maarten 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.
Sint Maarten’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.