The case

The financial industry has welcomed the model change from Model 2 to Model 1 as part of the FATCA implementation, although – among others – the introduction of penal provisions for negligence offences as part of the FATCA implementation (Art. 28 para. 2 VE-FATCA) is viewed critically.

Source: Financial industry and own findings & Consultation

The commentary

Article 28 para. 2 of the VE-FATCAG stipulates that negligent breaches of reporting and due diligence obligations are punishable. The deletion of Article 28 paragraph 2 VE-FATCAG has been requested.

The financial industry argues that the retention of this penal provision is not justified and makes the implementation of the FATCA agreement more difficult. The call for the deletion of Article 28 paragraph 2 of the VE-FATCAG reflects the concerns of the financial industry who claims that such provisions could increase legal uncertainty and make the practical implementation of the law more difficult.

A similar discussion has already taken place in the area of social security. Various rulings have established that a mere breach of the reporting obligation does not automatically qualify as a criminal offence. It has been emphasised that additional elements must be present in order to constitute a criminal offence.

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