Know your customer – why does the bank ask?

Banking is based on trust. The ingredients of trust are good service, the right solutions and the fact that the bank knows its customers. We ask you questions on different matters because we want to know you and your life situation. When we know you, we will be able to give you good advice and offer you banking services suiting your needs.

However, some of the questions are based on other reasons. Nordea is one of Europe's largest banks and we want to be socially responsible. The banks are subject to many laws including ones that seek to prevent, for example, money laundering, terrorism and white-collar crime.

We ask you questions when you become our customer and also after that when you visit our branches or do your banking via Netbank or over the phone with Nordea Customer Service 0200 70 000 or Nordea Business Centre 0200 26262.

Be alert when online

Make sure that the device you are using is protected, the antivirus software is updated and the firewall is in operation. Be alert when you are online and do not open e-mails or links from unknown sources. Keep and use your access codes carefully and do not let other people use your accounts.

Why does the bank ask? Forms - FATCA / CRS FAQ - FATCA /CRS Why does the bank ask?

What kind of questions do we ask?

Banks have a statutory obligation to identify and know their customers. In addition to the personal details, the bank must have sufficient information on the customer's business, financial position and origin of funds. By giving us the information we request, you support our work against crime and bear your share of social responsibility. All information you give us is treated confidentially in accordance with the regulations on bank secrecy.

For example, we may ask you about the origin and purpose of the funds paid to your account, or why you want to use our services. When we are investigating the origin of the funds paid to your account, we may need deeds of sale or other documents in addition to a written statement.

We must also find out if you are a politically exposed person (PEP) in another country or if you are a family member or close business partner of a PEP. This does not mean that we are asking your political opinions.

We use various channels to acquire customer information 

We ask for information about our customers and their banking through a number of different channels. We will approach some of our customers by letter or phone, and some will receive a questionnaire in Netbank or Mobile Bank. 

Filling in the questionnaire in Netbank and Mobile Bank is secure, as it is done after identification. You can verify the security of the website and the SSL encryption in Netbank by clicking the padlock icon in the address bar at the top or bottom of the screen.

We will verify both the personal data and the information related to banking. The questions will concern, among other things, the recipient's citizenship, country of birth, country of taxation and the origin of funds received at Nordea. The questions are the same as the ones asked at customer meetings in branches.

We would like to remind you once more that Nordea will never request your personal Netbank access codes, card information or personal identity number by e-mail or over the phone.

See also: questions and answers

Identity documents accepted by Nordea

The bank is obliged to verify the customer's identity from an official and undamaged identity document. This obligation concerns both existing and new customers.

Read more: Identity documents accepted in Nordea

Forms - FATCA / CRS

Tax liability in the United States - FATCA

The United States and Finland have agreed on information exchange subject to FATCA, Foreign Account Tax Compliance Act concerning the taxation of US foreign accounts. By virtue of the agreement, financial institutions must recognise the accounts and assets of US persons and report their number and amounts to local tax authorities. These will report the information further to the US tax authority, the Internal Revenue Service (IRS).

‘US persons’ refers, among others, to persons residing in the United States, US citizens, persons with dual nationality, holders of a permanent residence permit (Green Card) and businesses registered in the United States.

We kindly ask you to fill in one of the forms listed below if you receive from Nordea a letter concerning FATCA-related matters. The documents you reach from these links replaces the earlier used forms W-8BEN, W-8BEN-E and W9. Please return it to us as instructed in the letter.

If you have questions on this subject, see frequently asked questions and answers or contact Nordea Customer Service (0200 70 000; service in English) Mon–Fri 10.00–16.30 (local network charge/mobile call charge).

Please note that Nordea cannot provide tax advice related to the FATCA act. If you have taxation-related questions, contact a taxation specialist or refer to the IRS website. 

FATCA and CRS forms
CustomerForm
Individuals
Self certification (pdf, 258 KB)Opens new window - replaces earlier used forms W-8BEN and W9.
Entities
Self certification (pdf, 277 KB)Opens new window - replaces earlier used form W-8BEN-E
If you need another form, you can find all forms on the IRS homepageOpens new window
FAQ - FATCA /CRS
QuestionAnswer

Why do you ask these questions?

At Nordea, we are working actively to protect your financial interests. As a bank, our responsibility also includes counteracting illegal activities such as fraud attempts, ID theft, human trafficking, drug dealing, terrorist financing and financial crime like money laundering and tax evasion. To maintain confidence in Nordea as a responsible corporate citizen, it is crucial that we attend to this responsibility.
We take our responsibility seriously and it is our duty to possess sound knowledge of how our customers use the bank’s products and services. It is in fact a regulatory requirement, and we are obliged by the authorities to have this knowledge about our customers.

Do you ask all of your customers these questions?

Yes, we ask all our customers these questions, but we do not ask all our customers these questions at the same time.
We know that almost all customers are honest, but in order to find the few that are not, we need to ask everybody questions without exception. And when you and other customers answer our questions, you contribute to preventing illegal operations.

What do you use this information for?

We use the information to get to know and understand our customers to be able to protect your financial interests and detect any possible illegal activity. This is to protect you as a customer, and the society in total. We know that most of our customers are honest.

The information is used to update our customer systems so that all information we have about you is correct and up-to-date.

Do I have to answer these questions?

Yes, all customers need to answer these questions. It is an obligation we have as a bank and as a responsible corporate citizen to ask all our customers these questions.
It is important to save on each page. That way your information doesn't disappear if you do not complete all the questions during the first log-in.
Reminders to complete the form will be sent out/posted if you have not completed the form.

What happens if I do not answer the questions?

If you do not answer all the questions, ultimately we might not be permitted to provide you with a full range of our services, or give you the support that you need.
It is important to save on each page. That way your information doesn't disappear if you do not complete all the questions during the first log-in.
Reminders to complete the form will be sent out/posted if you have not completed the form.

Will you be able to terminate my relationship with Nordea if I don’t answer these questions?

Since we need your answers to these questions we will try to contact you if you do not answer. It might be so that you have different reasons for not being able to answer the questions and that is why we want to get in contact with you.

If we do not succeed to get in contact with you, ultimately we might not be permitted to provide you with a full range of our services, or give you the support that you need.

Do all banks ask questions like this?

Yes, the authorities have obliged all banks to ask their customers these questions, but they might do it in different ways and at different times, but the requirements from the authorities are the same for all banks.

It is up to the banks themselves to determine how they obtain this information.

Can I answer at a later stage?

Yes, it can be done later. If you have received a letter with a personal code, it is valid for 30 days.

Do you share this information with other banks?

No. The responses will only be used to make sure that the information we have about you is correct and up-to-date, and in connection with statutory reporting.

The information you provide will be kept confidential in accordance with the bank's duty of confidentiality. We also comply with the Personal Data Act.

Can I change my answers?

If you need to correct or update your previous answers, please contact your Nordea branch office or you can call 0200 3000

How often will you ask me questions like this?

We need to ask you these questions on a regular basis since the authorities have obliged all Finnish banks to update their customer information.

Our main interest is to protect your financial interests and to protect you against illegal activities such as ID-theft, fraud and phishing. It is part of our responsibility as a bank and that is why we need to ask you these questions.

Why do you ask about in which country/countries I am tax residence?

CRS (Common Reporting Standard) is an international standard decided by OECD (The Organisation for Economic Co-operation and Development) that covers automated exchange of information about financial accounts. More than 40 countries have signed this standard, including Finland and all the EU countries.

The standard means that financial institutions are obliged to gain knowledge about their customer’s taxable country/countries and to yearly report information about accounts owned by customers who are taxable in other countries/jurisdictions.

Why do you ask about my country of birth and citizenships?

This is a requirement from the authorities. As a bank we are required to know this about our customers.

How do I know that this letter/homepage is really from Nordea – and not a fraud/phishing attempt?

If you received a letter with a link and a personal code, make sure that you type the address to the web page yourself.

When you are logged into the netbank or have typed the address to the web page, you will see a padlock in the address field. This shows that you are on a secure page.

Before you complete the form you can check that your name and national identity number are filled in automatically.

If you are uncertain whether Nordea has contacted you, please contact us 0200 3000.

I feel that some of the questions are intruding my privacy, are you really allowed to ask me these questions?

It is our responsibility to have this knowledge about our customers. To maintain confidence in Nordea as a responsible corporate citizen, it is crucial that we attend to this responsibility.

We are obliged by the authorities to collect this information about our customers, and when you answer these questions you help us maintain our responsibility and fight illegal activities.

We know that almost all customers are honest, but in order to find the few that are not, we need to ask everybody questions without exception. It is important to know, that we do not ask these questions based on any suspicions against you.

I’ve been a customer for more than 10/20/30 years, why do I need to answer these questions now? 

I know my banking advisor personally, why do you need this information?

The authorities have obliged all Finnish banks to update their customer information. Our main interest is to protect your financial interests and to protect you against illegal activities such as ID-theft, fraud and phishing. It is part of our responsibility as a bank and that is why we need to ask you these questions.

We ask all our customers, new and existing, these questions, regardless of how long they have been our customer.

The reason that we ask you these questions now is that the Finnish authorities and regulators have implemented stricter rules as to what kind of information financial institutions need to have about their customers.

Will you contact me if the answers to these questions deviate from what I actually do?

Our primary objective is to look after your economic interests. This includes protecting you against ID theft, attempted fraud/scams and other forms of economic crime.

Depending on your answers, we may need to collect additional information. In the event of discrepancies, you may be contacted to confirm that the provided information is correct

Will you use this information against me in future meetings with the bank?

Our main interest is to protect your financial interests and to protect you against illegal activities such as ID-theft, fraud and phishing.

That is why we might contact you if there are deviations between the answers you have given and what you actually do.

Our main reason for contacting you is to make sure that the information we have about you is correct and to update the information if it is not correct.

You have already asked me these questions xx weeks/months ago. Why do you ask them again?

If you have recently answered similar questions, we apologize, but please answer nevertheless. If you know all the answers, it should only take a couple of minutes.

I’m a customer in other banks as well, and they don’t do it this way. How can you say that all banks ask these questions?

The authorities have obliged all Finnish banks to update their customer information. The questions we ask you are to make sure that the information we have about you is correct and updated.

It is up to each bank to decide how and when to contact their customers, but the requirements from the authorities are the same for all banks.

Why am I getting a letter when my wife got a prompt in the netbank and my father was interviewed in a branch office?

We will ask the information in different ways, depending on how they use our services. We will contact our customers either in the netbank, in the mobile bank, by phone or by letters to make sure that the information that we have about you is correct and updated.

The letters are only sent to the customers who do not use our netbank or mobile services.

QuestionAnswer

What is FATCA?

FATCA is the Foreign Account Tax Compliance Act valid in the United States.

The purpose of the act is to prevent tax evasion in the US. By virtue of FATCA, financial institutions must identify US Reportable Persons among their customers.

FATCA has been or will be transposed into local legislation in several countries, including all Nordic and Baltic countries.

What are the impacts of FATCA?

As a result of FATCA, financial institutions are under an obligation to identify those of their customers that are US persons, companies and corporations and subsequently report information about financial accounts and assets held by these customers, directly or indirectly, on an annual basis. The financial institutions usually report to the local tax authorities in their respective countries.

FATCA has been or will be transposed into local legislation in each Nordea country. An exception to this is Russia where Nordea has signed an agreement on compliance directly with the IRS.

Thus Nordea must comply with the FATCA requirements in each country and review all current and new customers to confirm their FATCA status. Where necessary, Nordea will contact customers for further information.

Nordea must also withhold tax on FDAP (fixed or determinable, annual or periodical) payments from a US source to certain financial institutions that do not comply with FATCA.

Does FATCA replace other US tax rules?
 

No. FATCA and the related local laws only regulate the customer due diligence and reporting that financial institutions must perform. It does not affect the tax laws you as a person must consider.

Nordea recommends that you consult a tax professional if you have any questions regarding tax rules.

 

What is Nordea required to do in order to comply?

Nordea must:

  • Conduct a review of existing and new customers to identify those that are US reportable under FATCA.
  • Report information to the local tax authorities about all accounts held directly or indirectly by US persons. In Russia and Switzerland Nordea reports directly to the IRS.
  • Nordea will also have to report information about accounts and other assets held by customers who do not respond to questions regarding their US status.
  • Withhold tax on FDAP (fixed or determinable, annual or periodical) payments from a US source to certain financial institutions that do not comply with FATCA.

Is Nordea the only bank doing this?

No, all financial institutions are required to comply with the requirements of FATCA. However, their approach may differ from the one taken by Nordea.

I was contacted by another bank. Why did they ask for different documentation than Nordea?

Financial institutions may have different approaches to how they collect information from customers in order to verify their FATCA status; therefore the forms may differ between banks.

Nordea cannot advise you on your FATCA classification or US tax status. If you need further support, you should consult a tax professional.

What information will Nordea report to the local tax authorities?
 

The information to be submitted on the year 2014 includes name, address and US taxpayer identification number as well as account numbers and balances.

How does this affect individual persons?

Am I only affected if I am a US citizen?
No. The law specifies a number of criteria that financial institutions must look for in respect of all customer accounts in order to determine if someone may be a US person. Customers that meet any of these criteria may be contacted in order to obtain further information:

  • US citizenship or residence
  • US place of birth
  • Work permits (“Green Cards”)
  • Persons who spend a significant number of days in the US each year
  • US address in the beneficiary register
  • US telephone number in the beneficiary register
  • Recurring payments to an account maintained in the US
  • Powers of attorney or signatory authority granted to a person with a US address
  • Instances where a “care of” address or post office box address is the only address known to Nordea.

Note that financial institutions are required to search their customer bases for indications of US persons. They may therefore contact customers who in fact are not US persons.
 
I am a US person. How am I affected?
If you are a US person, Nordea may contact you in order to obtain further documentation. You may also wish to determine if you are required to submit any other information to the US authorities.

Note that Nordea cannot give you any advice on this, so please contact a professional tax adviser.

Nordea is required to report information about you and your accounts to the local tax authorities annually. In Russia and Switzerland Nordea reports directly to the IRS.
 
I am not a US person. How am I affected?
Most customers who are not US persons will see no impact and will not be required to act.

However, Nordea may contact you to confirm your status as a non-US person if there is reason to believe that you may be a US person for FATCA purposes.
Note that if you have a joint account with a US person, this account will be treated as being subject to the FATCA regulations.
 

I am a US person and own a large part of the shares of a company. How am I affected?
 

Since you own a large part of the shares of a company, you are most likely a beneficial owner/controlling person in that company.

Nordea may be required to report information about you, but that depends on the business your company is conducting. If your company’s business is “passive”, Nordea must report information about you if you are a beneficial owner/controlling person in that company. A company may be seen as passive if, for instance, more than 50 per cent of the income of the company consists of interest or dividends.

What are the impacts on companies and corporations?
 

Are only US companies affected?
No, FATCA has a wider impact that goes beyond just US companies.

Nordea will contact many customers worldwide to determine their FATCA status in order to be able to classify each customer. This may take place using Nordea forms or US tax forms, depending on what information is needed.

What types of documentation will I have to provide?

Nordea will contact affected customers and provide full details as to what information is needed and what forms must be completed for FATCA purposes. 

Will Nordea provide me with all necessary forms?
 

When Nordea contacts a customer, we will either include the relevant forms or provide links to a website from which they can be downloaded.

What will Nordea do if I do not provide the information requested under FATCA?

Under the FATCA regulations, financial institutions are under an obligation to treat customers who do not provide the information requested as US reportable persons. This means that Nordea will report the same information about such customers to the local tax authorities as it will about those who have provided documentation confirming their status as US persons.

In some exceptional circumstances, financial institutions may be required to withhold tax on certain payments from US sources coming into accounts held by customers who have not provided the information requested.

Frequently asked questions - CRS

QuestionAnswers
What is CRS?

CRS ("Common Reporting Standard") is a global standard for the automatic exchange of information on financial accounts. The standard requires financial institutions to identify financial accounts held by customers with a tax residence in another state or jurisdiction other than its own. The objective of CRS is to fight international tax evasion.

CRS entered into force on the 1st of January 2016. All financial institutions must by then:

  • identify new individual and entity customers’ tax residencies (including customers that only have a domestic tax residency),
  • review existing individual and entity customers in order to identify customers with a tax residency outside the bank country (end date 31 Dec 2018),
  • identify certain corporate/entity customers, and their beneficial owners/controlling persons who have a tax residency other the bank country, and
  • report the customers with other tax residency/-ies than the bank country to the local Tax Authority.

The CRS regulation is based on the FATCA regulations, but CRS also differs in significant aspects in comparison with FATCA. The main difference is that CRS encompasses numerous countries and customers compared to FATCA which only covered the United States and account holders who have a tax residency in the United States.

All EU Member States are participating in CRS and have signed an agreement on automatic exchange of financial information (the DAC II directive).

Who is affected by the national CRS legislation?

CRS affects individuals and corporates/entities that are tax resident in any country other than the bank country, and who holds a product in scope for the CRS.

What does the term ‘Tax Residence’ mean?

The term ‘tax residence’ means that a person is resident in a country (tax residence) for tax purposes in accordance with internal law.

Corporate/Entity

Generally, an entity will be resident for tax purposes in a jurisdiction if, under the laws of that jurisdiction, it pays or should be paying tax therein by reason of its domicile, residence, place of management or incorporation, or other criterion of a similar nature.

Subsidiaries/Branches of entities:

The tax residence of the branch of an entity is normally only in the country of tax residence of the entity to which the branch belongs. Example: a Swedish subsidiary/branch of a Danish company normally only have tax residence in Denmark.

When is an entity tax resident in another country?

The domestic laws of the other countries lay down the conditions under which an entity is to be treated as tax resident. They cover various forms of attachment to a country which, in the domestic tax laws, form the basis of a comprehensive taxation (full tax liability).

Individuals

In general, tax residence is the country in which you live. Special circumstances (such as studying abroad, working overseas, or extended travel) may cause you to be resident elsewhere or resident in more than one country at the same time.

When is an individual tax resident in another country?

In general, the tax residence is the same as the permanent residence or whereabouts. However, each country has its own set of rules for determining tax residence.

For more information about tax residency rules in a certain jurisdiction, please visit the OECD Automatic Exchange Portal at: http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/#d.en.347760.

If the customer has questions about how to determine their tax residency, the customer should consult a tax advisor or contact their local tax authority.

How will the CRS impact the Financial Services industry?

Banks and other financial institutions such as securities institutions, fund management companies, investment companies and life insurance companies are obliged to identify all of their customers according to the CRS regulation. Further these institutions must report customers and their customers’ financial assets to the tax authorities.

The tax authorities will in turn send the data to the tax authorities in other CRS-countries.

How is Nordea working with CRS?

The CRS as well as FATCA is part of the common customer due diligence procedures. Nordea will ask new questions to customers when they, for example, open a new account, when investing in financial assets or when amounts are paid or credited from life insurance benefits/contracts.

With the help of the answers, Nordea can identify the customers that Nordea should report to the tax authority.

What actions are required from a customer who is tax resident in a country other than the bank country?

The customer needs to answer the questions asked by the bank/other financial institutions. If the customer is liable to tax in one or more countries other than the bank country, we might ask the customer to fill out a self-certification. In this self-certification the customer should provide their tax residencies and TIN(s) ("Taxpayer Identification Number").

What is a TIN?

The term Taxpayer Identification Number (TIN), or similar, is a unique combination of letters or numbers assigned by a jurisdiction to an individual or an entity for tax administration purposes.

What if a customer states that he/she does not have a TIN, what should the customer do then?

Some jurisdictions do not issue a TIN. If so, the customer must state so. However, most countries issue TIN and if that is the case, the customer must provide its TIN.

Please note that the customer in certain situations may not have a TIN and must in such cases apply for a TIN according to local regulations.

Further details on jurisdiction specific TIN formats can be found at: http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/#d.en.347759.

When will Nordea start to collect this information?

Nordea will start collecting information relating to CRS in the beginning of 2016. The first time Nordea will report under CRS is in 2017.

Please note that the customer in certain situations may not have a TIN and must in such cases apply for a TIN according to local regulations.

Further details on jurisdiction specific TIN formats can be found at: http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/#d.en.347759.

What is the difference between the Dodd-Frank, FATCA and CRS regulation?

Dodd-Frank (“US restrictions”)

Under Dodd-Frank, it is the residence/domicile in the USA that is decisive. I e the requirements differ from FATCA (where also US citizenship is important).

FATCA

In case the customer is tax resident in the U.S, i.e. holds a U.S. Citizenship or e.g. “green card”, FATCA (the national laws implementing FATCA) will apply. Under these laws the customer have to provide a self-certification including TIN, etc. You can find more detailed information about FATCA on nordea.com. FATCA is applicable to both natural and legal persons..

CRS

The CRS regulation affects customers with a tax residency other than the bank country. The CRS is applicable to both natural and legal persons.

What customer information will Nordea report under the CRS?

With respect to the year 2016 and onwards on an annual basis, the Nordea will report the following information starting in 2017:

  • balance/value on depository accounts, custodial accounts, insurances and fund accounts
  • information about interest, dividends and other returns
  • gross proceeds and gross amounts (for example from sale of securities and equity and/or funds), and redemption payments.
  • For "Passive Non-Financial Entities", we will also report the beneficial owners/controlling persons that have a tax residency other than the bank country.

Are there any accounts/products that are excluded with respect to reporting under CRS?

The following accounts are considered to be Excluded accounts (no reporting):

  • pension related insurances and pension savings accounts which meet certain criteria
  • accounts held by estate,
  • escrow accounts and,
  • accounts held by publicly traded corporations or a related entity of such publicly traded corporation

What can the customer do if the customer has not declared his/her taxes where the customer has a tax residency?

A customer who is liable to submit a tax return where he/she has a tax residency but has not submitted a tax return, should submit a tax return afterwards.

If a person voluntarily submits a tax return via a posteriori (self-correcting), any penalties are normally lighter compared to if a tax authority discovers any failure to submit a tax return and pay taxes.

Credit of tax, to avoid double taxation, may in some cases be allowed for income taxed in another country. This depends on whether there is a double taxation treaty between the countries in question.

We should recommend the customer to contact a tax advisor in case the customer needs assistance with correcting a tax return or has questions how this procedure works. Generally, we may recommend any of the major accounting firms (PwC, EY, Deloitte, KPMG) as they usually have local contacts in all countries and can handle any issues that may come up because of the tax liability in another country.

What is an ‘Active Non-Financial Entity’?

A company (other than a financial institution) is considered active if the company’s:

1) income to more than 50% comes from sales of goods and services and

2) whose assets more than 50% is attributable to business activities relating to the sale of goods and services

Active companies includes, for example:

  • A company whose revenue to more than 50% derives from manufacturing and/or sale of goods and/or services.
  • A listed company or a related company (subsidiary/affiliate) of a listed company
  • Governmental entities/units and international organizations and companies owned exclusively by such entities
  • Foundations, non-profit organizations, registered religious communities and other legal entities that are exempt from tax under Chapter 7. 3-17 §§ in the Swedish Income Tax Law

What is a ‘Passive Non-Financial Entity’?

A company (which is not a financial company) is considered passive if:

1) more than 50% of its income is passive or

2) more than 50% of its assets are those that generate passive income.

Passive income can be, for example, dividends and interest. It can also be rent and royalties if the company does not have employees. Further, it may be annuities (often related to life insurances), capital gains/profits on the sale of assets/property that can produce passive income, certain insurance return or payment/redemption.

What is a ‘Financial Institution’?

A financial institution is a company which is a depositary institution (typically companies that manage depository accounts), custodial institutions (companies offering custodial accounts or similar to customers), investment entities (typically investment funds) or an insurance company which offers savings products such as an endowment insurance.

What is a ‘Beneficial Owner/Controlling Person’?

A The term beneficial owner/controlling person mean the natural persons who exercise control over an entity. For this purpose control includes direct or indirect ownership of more than 25 per cent of the entity’s financial assets.