it is a brief descriptive and critical presentation on the Common Reporting Standard CRS and its implications with a note on Lebanon.

1. The
Common Reporting Standard (CRS)

2. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
‫اﻟﺘﺄﺛﻴﺮ‬
‫ﻋﻠﻰ‬
‫اﻟﻮداﺋﻊ‬
Double
Taxation Tax Evasion
Impact on
Deposits
‫اﻟﺘﻬﺮب‬
‫اﻟﻀﺮﻳﺒ‬‫ﻲ‬
‫اﻹزدواج‬
‫اﻟﻀﺮﻳﺒ‬‫ﻲ‬
CRS is intended to be an effective tool to counter Tax Evasion and to increase & improve voluntary Tax
Compliance… CRS is a Tool made available in the Hands of the “Conduit of Monetary Policies” – i.e., Financial
Institutions – to assist Fiscal Authorities!
DeemedCriminal!
ByAllJurisdictions…
BusinessImplications!
Jurisdiction-andInstitution-Specific
dependingonthevolumeofReportable
Accounts…
ContractualMiscalculations!
BetweenTwoParticipating
Jurisdictions,andmustbe
corrected…
It may change the Banking Model with more
reliance on Borrowing (instead of Deposits) for
Funding – Active Money Market! And/or Shadow
Institutions/Transactions…

3. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Borrowers
Deficit Spending
Units ‐DSUs
• Individuals (Current
Income is LESS than Current
Expenditures)
• Firms (Earnings falls short of
what the firm needs currently)
• Government (Current
Revenues fall short of planned
Expenditures)
• Financial
Intermediaries (Funding
is currently LESS than
investment)
Lenders
Surplus Spending
Units ‐SSUs
• Individuals (Current
Income is GREATER than
Current Expenditures)
• Firms (Earnings in excess of
what the firm needs currently)
• Government (Current
Revenues are in excess of
planned Expenditures)
• Financial
Intermediaries (Funding
is currently GREATER than
investment)
WhereWill SSUswarehouse
theirSurplusesofFund?
Shadow Banking
(Non-Reportable
Institutions
Banks
(ReportableInstitutions)
Financial Markets
(NotallareReportable
Institutions)
NOTSubjectTo:
 FATCA
 CRS
 OtherAMLRules
SubjectTo:
 FATCA
 CRS
 OtherAMLRules
 Stocks
 Bonds
 OtherInstruments
BankingModel

4. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Reference:
• http://www.oecd.org/tax/automatic‐exchange/common‐reporting‐
standard/
• http://www.oecd.org/tax/automatic‐exchange/crs‐implementation‐
and‐assistance/crs‐by‐jurisdiction/

5. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Disclaimer:
The jurisdiction‐specific information published on the OECD AEOI Portal do not
necessarily reflect the views of the OECD. While the AEOI Portal is run by the
OECD, each jurisdiction is responsible for its jurisdiction‐specific content and links
to its own pages. Further:
 The Information in this section is of a general nature only and not intended to
address the specific circumstances of any particular individual or entity,
 The Information in this section is not necessarily comprehensive, complete,
accurate or up to date,
 The Information in this section is sometimes linked to external sites over
which the OECD has no control and for which the OECD assumes no
responsibility, and
 The Information in this section is not professional or legal advice. If you need
specific advice, you should always consult a specialist.

6. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Legal Framework
Tax Residency,Tax Evasion,
Double Taxation, ...
ITPlatform:Technical
Framework
FinancialInstitutions:
Administrative Framework
Jurisdiction “A”
 The legal framework for the collection and exchange of
information will be ONLY between “Participating
Jurisdictions,” and it’s only a part of the framework
when it comes to implementing the CRS Standard.
 Tax administrations also require technical and
administrative capacity to properly manage the
information (whether sending or receiving data).
 It is important to consider these requirements early in
the implementation process to ensure adequate resources
are put in place by the time of exchange.
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
Jurisdiction “B”
Sending …..
….. Receiving
ConduitofMonetary
Policies
UnderCRS:Conduit
ofFiscalPolicies!?
Legal Framework
Tax Residency,Tax Evasion,
Double Taxation, ...

7. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Legal Framework
Tax Residency,Tax Evasion,
Double Taxation, ...
ITPlatform:Technical
Framework
FinancialInstitutions:
Administrative Framework
Jurisdiction “A”
 The Four Core Requirements To Implement CRS:
1. Translating the reporting and due diligence rules into
domestic law, including rules to ensure their effective
implementation.
2. Selecting a legal basis for the automatic exchange of
information.
3. Putting in place Information Technology (IT) and
Administrative infrastructure and resources.
4. Protecting Confidentiality and safeguarding data.
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
Jurisdiction “B”
Sending …..
….. Receiving
ConduitofMonetary
Policies
UnderCRS:Conduit
ofFiscalPolicies!?
Legal Framework
Tax Residency,Tax Evasion,
Double Taxation, ...

8. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Legal Framework
Tax Residency,Tax Evasion,
Double Taxation, ...
ITPlatform:Technical
Framework
FinancialInstitutions:
Administrative Framework
Jurisdiction “A” Jurisdiction “B”
Sending …..
….. Receiving
Legal Framework
Tax Residency,Tax Evasion,
Double Taxation, ...
1. Collecting and reporting the information:
• The Format to report the data is decided by the Tax Administration.
• Will There Be Transmission and encryption standards? Who sets these
Standards.
2. Receiving the information to send:
• Operational Security.
• Who Validates the data?
• Restricted Use of the data.
3. Sending the information:
• Sorting the data.
• The format to exchange data
• Will There Be Transmission and encryption
standards? Who sets these Standards.
4. Receiving the information:
• Operational Security.
• Restricted Use of the data.
Every CRS Participating Jurisdiction is on
the Sending & Receiving Ends
simultaneously.

9. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Jurisdiction“A”TaxAdministration
ConfidentialityandDataSafeguard
RequirementsinPlace.
Jurisdiction“B”TaxAdministration
ConfidentialityandDataSafeguard
RequirementsinPlace.
Information Reporting
in relation to Tax
Residents of
jurisdiction “B”, in
accordance with
Jurisdiction “A”’s
domestic reporting
requirements.
Information Reporting
in relation to Tax
Residents of
jurisdiction “A”, in
accordance with
Jurisdiction “B”’s
domestic reporting
requirements.
ITPlatform ITPlatform
Jurisdiction“A”Financial
Institutions
Jurisdiction“B”Financial
Institutions
Information Exchange, in accordance with
the underlying legal instrument and the
Competent Authority Agreement between
Jurisdictions A & B
Jurisdiction “A” Jurisdiction “B”
Account Holders are Individuals & Entities
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders

10. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
FATCA Participating
Countries
MonetaryAuthority
FinancialInstitutions
FiscalAuthority
USFiscalAuthority
 Financial Institutions (FIs) are required to report Directly to US
Tax Authority on Reportable Accounts.
 The Burden of proof is on the FI, and the FI is held accountable,
by US Tax Authority, for “Non-Compliance”.
 Due Diligence is required. The FI, in a non-US Jurisdiction, is
deemed Non-Compliant by the US Tax Authority.
 Scope: Any country where there can be a FATCA Reportable
Account.
 The Monetary and Fiscal Authorities, in “FATCA Participating
Countries”, play no party to all this!
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders

11. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
CRS Participating Countries
MonetaryAuthority
FinancialInstitutions
FiscalAuthority
OECD:CRSParticipatingTaxAuthority
C.R.S.AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
 Financial Institutions (FIs) in participating Jurisdictions are required
to report to own-Jurisdiction Tax Authority on Reportable Accounts.
 The Burden of proof of “Tax Residency” is on the Account Holder.
 Due Diligence is required by the FI. The Account Holder is
responsible to provide the FI accurate, updated and complete
information about his/her/its (Entities) Tax Residency.
 The FI is deemed Non-Compliant by its own Tax Authority! Or … ?
 Scope of CRS Reporting by FI: on any Account Holder who is a Tax
Resident in one (or more of the) CRS Participating Countries; except
its own – A Lebanese FI does not Report on strictly Lebanese Tax Payers under CRS.
 The Monetary Authorities, in the CRS participating countries, play no
party to all this!

12. OECD Member Country
MonetaryAuthority
FinancialInstitutions
FiscalAuthority
OECD:CRSParticipatingTaxAuthority
C.R.S.
What is the role of Own Jurisdiction Tax Authority in case of Non-Compliance? Has Non-
Compliance Been Clearly Defined? How will the issue of non-compliance be addressed?
 Failure To Report on Tax
Residents! Be it:
• Intentional?
• Unintentional?
 Failure To Report on
Tax Evaders! Be it:
• Intentional?
• Unintentional?
 Failure To Report
Due to Account
Holder’s Failure to
effectively &
Accurately report
Tax Residency!
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
AccountHolders
CRS shall blur the
dividing lines
between Tax Evasion
(illegal) and Tax
Avoidance (legal)!

13. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Compliance Requirements
• The Standard requires effective administration by participating jurisdictions
which must have:
• Rules to prevent any Financial Institutions, persons or intermediaries from
adopting practices intended to circumvent the reporting and due diligence
procedures.
• Rules requiring record retention and evidence of performance of due
diligence and reporting. (Effective legislation)
• Administrative procedures to verify compliance by Financial Institutions.
(Program of compliance activity by Ministry of Finance)
• Effective enforcement provisions to address non‐compliance. (Penalties
for non‐compliance)

14. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Lebanon … A CRS Participating Jurisdiction
• Yes / Committed to first exchange in 2018
• Yes / Passed Primary and Secondary Legislation
• No / Guidance (on how to identify Tax Residency and CRS
Compliance) has not been released.
• No / List of low risk non‐reporting Financial Institutions and
excluded accounts have not been released.
• No / Domestic Reporting Format has not been communicated.
Source: OECD Website
August 17th, 2017 @ 4:30pm

15. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Source: OECD Website
August 17th, 2017 @ 4:30pm

16. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Source: OECD Website
August 17th, 2017 @ 4:30pm

17. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
Source: OECD Website
August 17th, 2017 @ 4:30pm

18. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
My Fear is that the only Crime which matters
in this new era of AML Compliance is going
to be “Tax Evasion”…

19. WeSpeakYourLanguage…
Jammal Trust Bank
Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist
With FATCA and CRS, the Burden of Tax Collection and Tax Compliance have landed on the back
of Financial Institutions (FIs) and rendered those FIs effective Conduits of Fiscal Policies Instead
of staying busy doing what they do best – Conduits of Monetary Policies.