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How to prepare for changes in the legislation regarding Central Point of Contact (CAP/PCC 2.1)?

Introduction

The Law of 14 April 2011 has entrusted the National Bank of Belgium to maintain a database to which registrants communicate on a regular basis information regarding their customers. This database is the so called “Central Point of Contact” or “CAP/PCC”.

The CAP/PCC database can be consulted by the National Bank upon request from the tax authorities when they want to obtain information on persons or entities for which there are indications of tax fraud or for which taxes need to be recovered. The National Bank will subsequently communicate the results to the tax authorities. Also natural or legal persons can contact the National Bank to consult the database with respect to their own data.

Through the program law of December 20, 2020 and the Royal Decree of 6 June 2021 the information to be reported to the National Bank will be extended as of 1 January 2022. As of then, financial institutions shall not only communicate the list of bank accounts and financial contracts, but also the account balances and globalized amounts of financial contracts at a certain reporting date.

This article will give you an overview of the important elements:

  • Institutions subjected to the change in CAP/PCC legislation
  • Overview of the information that needs to be submitted
  • Deadlines as of 1 January 2022

Are you impacted by the change in CAP/PCC?

The following declarants are impacted by CAP/PCC 2.1.:

  • Credit institutions with regards to their bank accounts and financial contracts
  • Payment institutions and institutions for electronic money with regards to payment accounts
  • Asset managers with regards to financial contracts
  • Insurance companies with regards to life insurance contracts

Note that leasing companies and exchange rate offices are not impacted by the changes in regulation although the current reporting requirements under CAP/PCC 2.0 remain for those institutions.

Which additional information needs to be reported under CAP/PCC 2.1.?

Additional data to be reported

Bank- and payment accounts

The following information should be additionally reported:

  • Events such as opening and closing of an account and the begin and end date of authorization power
  • Account balances per 30/06 and 31/12.

Financial contracts

Regarding financial contracts, the globalized amounts shall be reported for following contract types:

  • Life insurance contracts: Insurance contracts within branch 21, 23, 25 or 26 in which the investment risk is borne by the policyholder with an exception of life insurance contracts with a death cover and contracts with regards to one of the pillars of the Belgian pension system.
  • Investment contracts: Contracts with regards to investment services or ancillary services.

The globalized amounts refer to the sum of the individual amounts of ongoing contracts for each of the contract. The amounts should be globalized per customer. For contracts for which multiple customers are the holder of the contract, the complete amount shall be reported per customer. This means no pro rata calculation will be applied.

Other changes

Extension to accounts without IBAN CODE

In the prior legislation an IBAN code was required to identify the payment account. However not all accounts are foreseen of an IBAN code. As such the legislator foresees a payment account id which can be reported.

Abolishment of the threshold for deposit in or withdrawal of cash

The prior legislation imposed a threshold for deposit in or withdrawal of cash for an amount of 1.000 EUR on payment accounts. This threshold is abolished with the new legislation. Note that there is an exemption for deposit in or withdrawal of cash from the own bank account at the declarant (e.g. ATM). Those kinds of transactions, should not be reported to CAP/PCC.

What should be reported to CAP/PCC?

General

All events that are reported shall include information regarding:

  • Identification of the person involved
  • Identification of the account or financial contract to which the event relates
  • Role of the person involved (agent, holder, co-contractor…)
  • The type of the event: opening or closing, change in power of attorney
  • Date of the event

Bank- and payment accounts

Depending on the type of event, other information shall be given regarding bank- and payment accounts.

  • Opening of an account:
    • IBAN/alphanumerical ID
    • Date of opening
    • Identity of account holder(s)
    • Identity of person with power of attorney
  • Change in an account:
    • IBAN/alphanumerical ID
    • Nature and date of change
    • Changes performed to the data
  • Closing of an account:
    • IBAN/alphanumerical ID
    • Date of closing
    • Identity of account holders
    • Identity of person with power of attorney

The following data is to be reported as from value date 31/12/2020 relating to account balances:

  • Account identification (IBAN/payment account id)
  • Balance in euros (negative amounts accepted)
  • Value date of the balance (30/06 or 31/12).

Financial contracts

Following information shall be given regarding events relating to financial contracts:

  • Nature of the financial contract (mortgage, leasing, overdraft facility, life insurance…)
  • Identity of the customer
  • Whether it concerns opening or closing of the contractual relationship
  • Date of the event

The following data is to be reported as from value date 31/12/2020 relating to contract amounts:

  • Person identification or company identification
  • Type of contract (investment or life insurance)
  • Globalized amount in euros (negative amounts are accepted)
  • Value date of the globalized amount (30/06 or 31/12).

Financial transactions involving cash

Following information shall be reported regarding financial transactions involving cash:

  • Nature of the financial transaction (via account, via transfer, against precious metal or cash)
  • Identity of the client
  • Identity of the person who offers or receives the cash payment on behalf of the client
  • Contractual relation (customer or representative)
  • Date of the transaction

Practicalities of reporting

The information can be reported to CAP/PCC by:

  • Application to application (A2A): Internal application has direct link with NBB application
  • User to Application (U2A): Upload of XML file through GlobalScape

Which deadlines are you facing as of 1 January 2022?

The deadlines for the different types of information to be declared is presented below:

As CAP/PCC 2.1. will be introduced retroactively, the information per 31/12/2020 and 30/06/2021 should also be reported, next to the information on 31/12/2021. Regarding the year 2022, following reporting deadlines are in place:

Regarding life insurance contracts, the legislator decided not to impose half-yearly reporting and considered the reporting deadline of 90 days after the closing date more appropriate.

Should you report something to your clients?

Declarants should inform their customers of the new reporting requirements to CAP/PCC. This can be done in different ways, namely:

  • Include clauses and adapt contractual documentation for new accounts and financial contracts.
  • Include a declaration in the bank statements for existing accounts
  • Include a declaration in the periodic overview for existing financial contracts

The communication to the clients should happen the day of the notification to the NBB at the latest.

Have you thought about your reporting software?

As new information needs to be reported to CAP/PCC, it is important to know that adaptations to your reporting solution will be necessary as well. If you are not using a reporting solution yet, the new requirements can be a catalysator to digitalize your reporting workstream. As a partner in regulatory reporting, b.fine supports different credit institutions, investment firms and leasing companies with their current and new regulatory reporting processes through our SaaS reporting platform b.rx. It is the first user centric platform which supports the full regulatory reporting process in the most optimized & efficient way. b.fine helps you apply the new regulation requirements and takes care of your reporting supply chain so that you don’t have to worry about not being compliant in time for the CAP/PCC 2.1.

Are you searching for an efficient way to report to CAP/PCC? Contact our CAP/PCC specialists: Klaas Van Imschoot & Liesbeth Eeckhaudt.

Klaas Van Imschoot

Co-Founder b.fine

klaas@b-fine.eu

Liesbeth Eeckhaudt

Senior consultant Insurance

liesbeth@b-fine.eu

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