Determination: In Place But Needs Improvement
Uruguay’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 scope of Reporting Financial Institutions required to report information (SR 1.1), the scope of Financial Accounts required to be reported (SR 1.2) and the framework to enforce the requirements (SR 1.4). Most significantly, it is not clear that fiscally transparent Reporting Financial Institutions are fully in scope, certain definitions related to Reportable Accounts are incomplete, and Uruguay’s enforcement framework does not contain rules to prevent circumvention of due diligence and reporting obligations.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Uruguay 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. Most significantly, Uruguay’s legislative framework does not specify how the residence of a fiscally transparent Reporting Financial Institution is to be determined. The scope of Reporting Financial Institutions is material to the proper functioning of the AEOI Standard.
Recommendations:
Uruguay should amend its domestic legislative framework to ensure that the residency of a fiscally transparent Financial Institution is determined in accordance with the AEOI Standard.
Uruguay should amend its domestic legislative framework to require the term Investment Entity to be interpreted in accordance with similar language defining “financial institution” in the FATF Recommendations.
Uruguay should amend its domestic legislative framework to remove Health Insurance Companies from its jurisdiction-specific list of categories of Non-Reporting Financial Institutions as their characteristics are not substantially similar to those set out in the AEOI Standard.
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.
Uruguay has defined the scope of 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, Uruguay’s domestic legal framework does not fully incorporate the definitions of Entity, Equity Interest and Annuity Contract. The scope of Financial Accounts and the due diligence procedures are material to the proper functioning of the AEOI Standard.
Recommendations:
Uruguay should amend its domestic legislative framework to define Entity in accordance with the AEOI Standard.
Uruguay should amend its domestic legislative framework to define the term Equity Interest in the case of partnerships, in accordance with the AEOI Standard.
Uruguay should amend its domestic legislative framework to include the complete definition of the term Annuity Contract in accordance with the AEOI Standard.
Uruguay should amend its domestic legislative framework to remove three entries from its jurisdiction-specific list of categories of Excluded Accounts as they do not meet the requirements. These are: i) insurance contracts and ii) retirement account policies held by Uruguayan residents, and iii) Dormant Accounts.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Uruguay 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.
Uruguay 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. Most significantly, Uruguay’s legislative framework does not include rules to prevent Financial Institutions, persons or intermediaries from adopting practices intended to circumvent the reporting and due diligence procedures as required. This is a key element to the required enforcement framework and is therefore material to the proper functioning of the AEOI Standard.
Recommendations:
Uruguay should amend its domestic legislative framework to introduce rules to prevent Financial Institutions, persons and intermediaries from adopting practices intended to circumvent the due diligence and reporting procedures.
Uruguay should amend its domestic legislative framework to require Reporting Financial Institutions to maintain records for at least five years from the deadline to report the information, rather than from when they file the report.
