CASPs operating globally face varying due diligence requirements across jurisdictions. This guide covers strategies for efficient multi-jurisdiction compliance.
Multi-Jurisdiction Challenges
- Varying implementation timelines
- Different data requirements
- Inconsistent TIN formats
- Varying penalty regimes
- Multiple reporting deadlines
Harmonization Approach
Implement superset of requirements:
- Collect maximum required data elements
- Apply strictest validation standards
- Design for most comprehensive requirements
- Filter output by jurisdiction
By collecting the maximum data required by any jurisdiction, you simplify compliance processes and avoid having to request additional information when regulations change.
Jurisdiction-Specific Requirements
Key variations to track:
- Implementation effective dates
- Additional data elements (e.g., DAC8 nationality)
- TIN validation service availability
- Reporting format variations
- Pre-existing account remediation periods
Centralized vs Distributed
Centralized Approach
- Single due diligence process
- Consistent user experience
- Easier to maintain
- May over-collect for some jurisdictions
Distributed Approach
- Jurisdiction-specific processes
- Tailored to local requirements
- More complex to manage
- May miss cross-border scenarios
Users with tax residency in multiple jurisdictions require special attention. Your due diligence process must handle dual/multiple residencies gracefully.
Best Practices
- Maintain jurisdiction requirement matrix
- Regular monitoring for regulatory changes
- Centralized data collection, jurisdiction-specific validation
- Clear documentation of compliance by jurisdiction
Conclusion
Multi-jurisdiction due diligence requires careful planning. A centralized approach with jurisdiction-specific outputs typically offers the best balance of efficiency and compliance.
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