660 Acta Apostolicae Sedis - Commentarium Officiale

incorrect or incomplete information reporting or resulted in other infringements of this Agreement. The HS/VCS Competent Authority shall apply its domestic law (including applicable penalties) to obtain corrected and/or complete informa- tion or to resolve other infringements of this Agreement.

3. Significant Non-Compliance.

a) The U.S. Competent Authority shall notify the HS/VCS Competent Authority when the U.S. Competent Authority has determined that there is significant non-compliance with the obligations under this Agreement with respect to a Reporting HS/VCS Financial Institution. The HS/VCS Competent Authority shall apply its domestic law (including applicable penalties) to address the sig- nificant non-compliance described in the notice.

b) If such enforcement actions do not resolve the non-compliance within a period of 18 months after notification of significant non-compliance is first provided by the U.S. Competent Authority, the United States shall treat the Reporting HS/VCS Financial Institution as a Nonparticipating Financial Institution pursuant to this subparagraph 3(b).

4. Reliance on Third Party Service Providers. The HS/VCS may allow Re- porting HS/VCS Financial Institutions to use third party service providers to fulfill the obligations imposed on such Reporting HS/VCS Financial Institutions by the HS/VCS, as contemplated in this Agreement, but these obligations shall remain the responsibility of the Reporting HS/VCS Financial Institutions.

5. Prevention of Avoidance. The HS/VCS shall implement as necessary re- quirements to prevent Financial Institutions from adopting practices intended to circumvent the reporting required under this Agreement.

Article 6 mUtUAl commitment to continUe to enhAnce the effectiVeness of infor-

mAtion exchAnge And trAnspArency

1. Treatment of Passthru Payments and Gross Proceeds. The Parties are committed to work together, along with Partner Jurisdictions, to develop a prac- tical and effective alternative approach to achieve the policy objectives of foreign passthru payment and gross proceeds withholding that minimizes burden.

2. Documentation of Accounts Maintained as of the Determination Date. With respect to U.S. Reportable Accounts maintained by a Reporting HS/VCS