Thank you, Mr. Chairman.
The agreement with the United States with respect to FATCA, of course, was a bilateral agreement. The common reporting standard is a similar system in the sense that it involves a requirement on financial institutions to identify accounts that are held by non-residents and to share that information with the CRA, which will then provide it to the tax authority of the person's residence.
It's essentially an extension to the kind of reporting on financial accounts that we've been used to for many years, the idea that if you open.... If you're a Canadian resident and you have a bank account in Canada, the income you earn on that bank or investment account will be reported to the CRA through a T5 slip or a T3 slip. However, when accounts are held by a non-resident, that person's home country has no way of knowing that information unless the person reports it.
The common reporting standard is an international arrangement by which countries have agreed to collect this information from their financial institutions and to exchange it among their financial criteria. The international community, when it was looking at this approach, considered the fact that the U.S. FATCA agreements have a carve-out for certain small institutions. There were discussions around that, but there was no agreement that small institutions should be exempted.
There was a concern, essentially, that if a group of institutions was carved out, they could then become a pathway for non-reporting. If people know that if they place money in a certain kind of institution, they'll be safe and it won't be reported, this could create an incentive to use those institutions.
More than a hundred countries have now agreed to this standard. I'm not aware that any country has departed from the standard in that way.