This is the second intergovernmental agreement (IGA) signed by the United States. The first was with the United Kingdom in September.
The agreement with Denmark is based on the Reciprocal Model 1 Template released by the Treasury in July. It takes effect as of the later of Jan. 1, 2013 or the date on which both parties have notified the other in writing that the necessary internal procedures to prepare for the enforcement of the agreement are complete.
The agreement includes, in its annexes, a list of exactly who or what will qualify as exempt beneficial owners, deemed-compliant financial institutions and exempt products.
Some highlights of the deemed-compliant financial institutions are: small Danish financial institutions with local client bases and no fixed place of business outside of Denmark, certain collective vehicles, nonprofit organizations and housing cooperatives.
Additionally, similar to the agreement with the United Kingdom this IGA features three articles not included in the Model 1 Template:
- A “most favored nation” provision extending to Denmark any more favorable future terms the U.S. may enter into with another jurisdiction.
- Consultation between the two nations in the event that any conflicts arise during the implementation of the agreement and
- A provision that all annexes are an integral part of the agreement.