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, and in 2025 alone ten more joined the standard — among them Armenia, Georgia, Kazakhstan, Moldova and Ukraine. 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.
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. On 1 January 2026 the updated CRS and a separate Crypto-Asset Reporting Framework (CARF) take effect: crypto exchanges and custodians will begin reporting on their clients much as banks already do. The updated CRS additionally covers electronic money, central bank digital currencies and indirect crypto exposure through derivatives and funds. The first exchanges will take place in 2027 on 2026 data: 52 jurisdictions in the first wave, with a second group — including Hong Kong, Singapore and the UAE — joining from 2028. The United States has not signed the multilateral CARF agreement: its stated intention is to join the exchanges from 2029, and in the meantime it operates its own broker reporting for digital assets (Form 1099-DA, from the 2025 reporting year). In the EU the same rules are set out in the DAC8 directive. The notion of "crypto beyond the taxman's reach" is becoming a thing of the past.
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.
This material is for informational and analytical purposes only and does not constitute individual tax or legal advice.