Acta Francisci Pp. 689

ty, or death (except rollover distributions to other retirement funds described in paragraphs A and B of this section or retirement and pension accounts described in subparagraph A(1) of section V of this Annex II), or penalties apply to distributions or withdrawals made before such specified events; or

d) Contributions (other than certain permitted make-up contributions) by employees to the fund are limited by reference to earned income of the employee or may not exceed $50,000 annually, applying the rules set forth in Annex I for account aggregation and currency translation.

B. Pension Fund of an Exempt Beneficial Owner. A fund established in the Holy See or the Vatican City State by an exempt beneficial owner to provide retirement, disability, or death benefits to beneficiaries or participants that are current or former employees of the exempt beneficial owner (or persons designated by such employees), or that are not current or former employ- ees, if the benefits provided to such beneficiaries or participants are in con- sideration of personal services performed for the exempt beneficial owner.

C. Investment Entity Wholly Owned by Exempt Beneficial Owners. An Entity that is a HS/VCS Financial Institution solely because it is an Investment Entity, provided that each direct holder of an Equity Interest in the Entity is an exempt beneficial owner, and each direct holder of a debt interest in such Entity is either a Depository Institution (with respect to a loan made to such Entity) or an exempt beneficial owner.

III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Com- pliant FFIs. The following Financial Institutions are Non-Reporting HS/VCS Fi- nancial Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal Revenue Code.

A. Local Bank. A Financial Institution satisfying the following requirements:

1. The Financial Institution operates solely as (and is licensed and regulat- ed under the laws of the Holy See or the Vatican City State as) (a) a bank or (b) a credit union or similar cooperative credit organization that is operated without profit;

2. The Financial Institution's business consists primarily of receiving de- posits from and making loans to, with respect to a bank, unrelated re- tail customers and, with respect to a credit union or similar cooperative credit organization, members, provided that no member has a greater than five percent interest in such credit union or cooperative credit or- ganization;