Notice to Reporting HS/VCS Financial Institution. The HS/VCS Competent Authority should notify the relevant Reporting HS/VCS Financial Institution of the significant non-compliance determination, including the date the U.S. Competent Authority provided notice of such non-compliance to the HS/VCS Competent Authority (per Paragraph 3.3.4). The notice should also indicate that if the significant non-compliance is not cured within 18 months after the date the U.S Competent Authority provided notice to the HS/VCS Competent Authority, the relevant Reporting HS/VCS Financial Institution may be treated as a Nonparticipating Financial Institution, its name may be removed from the IRS FFI list, and it may therefore be subject to 30-percent withholding under section 1471(a) of the U.S. Internal Revenue Code.
