Under Revenue Procedure 2017-15 (the "QI Agreement"), QIs are required to perform certification of sufficiency of internal controls ("Periodic Certification") every three years. For most QIs, the initial Periodic Certification was performed in 2018 and covered the years 2015, 2016 and 2017. The Periodic Certification must be performed by the Responsable Officer ("RO") of the QI, which may be either a certification of sufficient internal controls or, in case compliance matters remain on-going at the time of certification, a qualified certification.
The Periodic Certification involves the certification of effective internal controls, and specifically whether or not there is a Material Failure or Event of Default. The certification requires the RO to certify FATCA compliance in relation to those accounts for which the QI operated in its capacity as a QI, general compliance with the obligations under the QI Agreement as well as specific Factual Information in relation to the Periodic Review.
The RO must take into consideration the results of the review of internal controls when performing the Periodic Certification.
The scope and methodology to be utilized for the Periodic Review is set forth in Appendix I and Appendix II of the QI Agreement. In case certain criteria are met the QI may request a waiver of the Periodic Review.