Concept
CRS closed the era of banking secrecy. The Common Reporting Standard, developed by the OECD, requires financial institutions worldwide to establish their clients' tax residency and to report account data once a year to the account holder's country of residence. According to the OECD's 2025 review, 116 jurisdictions now exchange information. The 2025 intake was Armenia, Rwanda, Senegal and Uganda; Georgia, Kenya, Moldova and Ukraine started a year earlier, and Kazakhstan has been exchanging since 2021. Hiding an account in a participating country has become practically impossible: it is known both where it is opened and where its holder lives.
How Banking Secrecy Gave Way to Automatic Exchange
The idea of mass automatic exchange grew out of a run of scandals. Swiss banking secrecy was considered inviolable for decades, until in 2009 UBS admitted that it had helped Americans hide income and handed over client data. The United States responded with FATCA (2010): under threat of sanctions, it required banks worldwide to disclose accounts held by Americans. Others quickly adopted the logic — in 2014 the OECD approved the Common Reporting Standard, the G20 states backed it, and the first automatic exchanges took place in 2017–2018. Within ten years the regime turned from a political slogan into a routine annual procedure.
How Automatic Exchange Works
The logic is simple. When an account is opened, the bank or broker determines which countries the holder is a resident of (and, for structures, the controlling persons as well). Once a year the institution reports a set of data to its tax authority: name, address, tax identification number, account number, year-end balance, interest, dividends and proceeds from asset sales. The tax authority passes this to its counterparts in the holder's country of residence. This is AEOI — automatic exchange of information: not on request, but automatically and every year.
CRS and FATCA: What's the Difference
FATCA is the American predecessor of CRS: from 2010 the United States required banks worldwide to report accounts held by its taxpayers. CRS took the same idea and made it multilateral. The fundamental difference lies in the trigger: CRS rests on tax residency, whereas FATCA rests on a connection to the United States (citizenship and the green card). The United States itself does not take part in CRS and shares data back only to a limited extent, which is why American accounts are sometimes called a hole in global transparency. For the rest of the world the network is almost seamless.
What Falls Under Reporting
Reportable accounts are those whose holder is a tax resident of another participating jurisdiction. The exchange covers depository and custodial accounts, many insurance and investment products, and also passive structures — companies and trusts, through which the controlling individuals are visible. CRS rests on tax residency; citizenship is irrelevant to it. A sound structure therefore starts with an honestly determined residency, and in the age of automatic exchange, attempts to conceal it do not work.
How a Bank Determines Your Residency
At the entry point, self-certification applies — a form on which the client declares every country of tax residency and the corresponding tax identification numbers. The bank does not take this at face value: it checks the form against indicia, the markers of a connection to a particular country — address, phone number, place of birth, standing payment instructions. A discrepancy between the declaration and the file triggers a query, and sometimes a freeze on transactions. For passive structures, the institution looks through the company or trust and records the controlling individuals — the same beneficial owners who appear in registers and under the exchange.
Classification: Who Ends Up in the Report, and How
The look-through mechanics rest on the classification grid of Section VIII of the Standard. To a bank, every corporate client is either a financial institution or an NFE (non-financial entity). An Active NFE is an operating business; the test is twofold: less than 50% of gross income for the preceding period is passive (dividends, interest, rent) and less than 50% of assets produce passive income or are held to produce it. Fail either threshold and the entity is a Passive NFE: the bank reports the account and every controlling person to their countries of residence.
A separate category is the Investment Entity under the managed-by test: 50% or more of gross income comes from investing in or trading financial assets, and the assets are run on a discretionary basis by another financial institution. Such an entity becomes a Reporting FI in its own right and reports its equity holders. If it sits in a jurisdiction outside CRS, the Standard flips the optics: it is treated as a Passive NFE, and the custodian bank reports its controlling persons on a look-through basis.
The consequence for the classic personal investment company under a bank or EAM mandate: almost always an Investment Entity or a Passive NFE — hiding behind the company does not work. For calibration: a holding living on rental income is a Passive NFE (rent is passive); a portfolio company under a bank's discretionary mandate is an Investment Entity with reporting duties of its own.
Trusts and Foundations Under CRS
A trust is not invisible to CRS — it is classified on the same grid. Where the trust's assets are mostly financial and are managed by a professional trustee with financial institution status, or by a bank under mandate (managed-by), the trust itself becomes a Reporting FI and reports its equity interest holders: the settlor — always, whether the trust is revocable or not; mandatory beneficiaries — always; discretionary beneficiaries — in the year they receive a distribution (a treatment jurisdictions may allow as a matter of choice); the protector and the trustee are inside the perimeter too. The trustee-documented trust route removes the Reporting FI status from the trust, but not the reporting: the professional trustee, itself a Reporting FI, files for all of the trust's reportable accounts.
If the trust is a Passive NFE (say, it holds real estate directly), the bank where the account sits collects controlling persons across every role — settlor, trustee, protector, beneficiaries — regardless of whether the role carries actual control. Hence the key planning conclusion: discretion does not take the settlor out of the report — the settlor stays reportable in every configuration; what changes is who reports the beneficiaries, and when. Private foundations (Stiftung) are read through the same logic, with founder and council mapped onto the trust roles. The groundwork on the structure itself is in our trusts primer.
Where the System's Limits Remain
The network is dense, but not seamless. The United States itself collects data under FATCA yet shares back sparingly, so an account at a US bank is less visible to the global system than most. CRS covers financial accounts, but direct real estate, art, gold in a safe and stakes in closely held companies without a banking intermediary pass it by. The quality of the exchange also depends on how a jurisdiction implements the standard: the OECD runs peer reviews and publicly names the laggards. It is these gaps that the next phase closes.
CRS 2.0 and CARF: The Next Phase
Transparency is expanding to digital assets. Implementation dates for the Crypto-Asset Reporting Framework (CARF) depend on each jurisdiction; under the OECD commitment process, the first CARF exchanges are planned for 2027. Reporting crypto-asset service providers covered by local rules will report client information. The OECD updates its jurisdiction-by-jurisdiction timetable, so implementation dates should be checked against the current OECD commitment list. In the EU, related reporting rules are implemented through DAC8.
Russia and Automatic Exchange After 2022
For clients with Russian passports the picture has changed. Formally Russia remains a CRS participant, but after 2022 many partners suspended the exchange with it: Switzerland halted the transfer of data, 26 of the 27 EU states dropped off Russia's automatic-exchange list, and the United States suspended a number of articles of the tax treaty from 16 August 2024. In practice, data on Russian residents' accounts from Western countries no longer reaches Russia, while the exchange with a number of CIS, Gulf and Asian jurisdictions is preserved. The specific lists are revised almost every year and need to be checked as at the date. At the same time, Russian currency residency and the obligation to notify the Russian tax authorities of foreign accounts and cash flows remain in force regardless of whether CRS data arrived or not.
Q/A
My account is held by my investment company — will the bank still report me personally?
Almost always, yes. A company run under a bank or EAM discretionary mandate is an Investment Entity: 50% or more of gross income comes from investing in financial assets and another financial institution manages them. It reports its own equity holders. A holding living on rent is a Passive NFE, and there the bank reports the controlling persons.
The trust is discretionary and I have received nothing from it — am I still reported as settlor?
Yes. Where the trust is a Reporting FI, the settlor is treated as holding an equity interest and is reported whether or not the trust is revocable and whether or not anything was ever paid out. A discretionary beneficiary, by contrast, is reported only for a year in which a distribution is received. Discretion covers the beneficiary, never the settlor.
On the self-certification form I named one country of residence out of two. Does that matter?
It does. The bank checks the form against indicia — address, telephone, place of birth, standing payment instructions — and a mismatch triggers a query and sometimes a freeze on transactions, with the bank entitled to report the discrepancy itself. Knowingly false data carries liability up to and including criminal liability in many jurisdictions.
Russia is formally still in CRS — will the Russian tax authority learn of my EU account anyway?
Not through automatic exchange: Federal Tax Service order No. ED-7-17/916@ of 30 October 2024 dropped 26 EU states from the exchange list, and Switzerland is not on it either. The duty to notify the authorities of a foreign account and file the annual cash-flow report survives for a currency resident regardless.
Crypto is still outside the exchange — is there time to wait?
The window is closing. On the OECD commitment list (updated 23 June 2026) 46 jurisdictions run their first CARF exchanges by 2027, another 29 by 2028 and the United States by 2029; in the EU the DAC8 rules apply from 1 January 2026, so 2026 data goes into the exchange during 2027. By then an exchange or a custodian collects the same client data a bank does.