The Deposit Guarantee Fund (the "Fund"), which is governed by Articles 154 to 173 of the Legal Framework of Credit Institutions and Financial Companies and by their Regulations, is intended to guarantee the repayment of deposits made with the credit institutions participating in the Fund. Best Bank is a participant in the Fund.
The Fund guarantees the repayment, per credit institution, of the total value of the cash balances of each deposit holder, up to a maximum of €100,000. To this end, balances existing at the date on which deposits are confirmed to be unavailable will be taken into consideration.
The aforementioned limit does not apply to the following deposits, for a period of one year from the date on which the amount was credited to the respective account:
Deposits arising from real estate transactions related to private urban housing.Deposits with corporate objectives, determined in a separate decree.Deposits for which the amount results from the payment of insurance benefits or compensation for damage resulting from the commission of a crime or from wrongful conviction.The Fund does, within the aforementioned limits, guarantee the repayment of:
Deposits made in Portugal or other European Union Member States with credit institutions headquartered in Portugal.Deposits made in Portugal with Portugal-based branches of credit institutions headquartered in countries that are not European Union Member States, unless such deposits are covered by a guarantee system in the country of origin under terms that the Bank of Portugal considers to be equivalent to those provided by the Fund, in particular as regards the scope of cover and the limit of the guarantee, and without prejudice to any existing bilateral agreements on the matter.Deposits are repaid in euro, and the balances of deposits denominated in foreign currency will be converted into euro at the exchange rate on that day.
Deposits excluded from the repayment guarantee are set forth in Article 165 of the Legal Framework of Credit Institutions and Financial Companies and indicated on the Fund's website.
In particular, the following are excluded from the repayment guarantee:
Deposits made in the name of and on behalf of credit institutions, investment firms, financial institutions, insurance and reinsurance companies, collective investment institutions, pension funds, national and foreign administrative public sector entities and supranational or international organizations, with the exception of: (i) deposits of pension funds whose members are small- or medium-sized enterprises; (ii) deposits of local authorities with an annual budget of €500,000 or less.Deposits arising from transactions in relation to which a criminal conviction has been declared, res judicata, for money laundering activities.Deposits whose holder has not been identified in accordance with Article 8 of Law no. 25/2008, of June 5 (which establishes preventive and repressive measures to combat laundering of illicit proceeds and the financing of terrorism), through the submission of the items stipulated in Article 7 of said law, by the date on which deposits are confirmed to be unavailable.The deposits of persons and entities that, in the two years prior to the date on which deposits are confirmed to be unavailable or on which a resolution has been adopted, have directly or indirectly held 2% or more of the credit institution's share capital or have been members of the administrative bodies of the credit institution, unless proven that they were not involved, by action or omission, in the origin of the credit institution's financial difficulties and that they have not contributed, by action or omission, to the aggravation of such a situation.Credit institutions headquartered in Portugal and authorized to receive deposits, and credit institutions headquartered in countries that are not European Union Member States, as regards deposits held by their Portugal-based branches, are required to participate in the Fund, unless such deposits are covered by a guarantee system in the country of origin under terms that the Bank of Portugal considers to be equivalent to those provided by the Fund, in particular as regards the scope of cover and the limit of the guarantee, and without prejudice to any existing bilateral agreements on the matter.
Repayment must be made within seven working days of the date on which deposits are confirmed to be unavailable and do not depend on the depositors in the Fund submitting a request to that end.
This repayment period applies from January 1, 2024.
Through December 31, 2023, the following periods apply:
20 business days, through December 31, 2018.15 business days, from January 1, 2019 through January 31, 2020.10 business days, from January 1, 2021 through December 31, 2023.During this transition period, the Fund must make an installment of up to €10,000 available to depositors for all deposits secured by the Fund within seven business days.
This information is not exhaustive. Learn more at www.fgd.pt and www.bportugal.pt on the Bank Customer Website.
What to do in the event of defaults on credit agreements
The deterioration of economic and financial conditions, as well as the increase in defaults on credit agreements, mean that these situations need to be continuously and systematically monitored.
In order to reduce financial difficulties, we have implemented measures to prevent and regularize arrears, as well as action plans for risk of default.
If you find yourself in this situation, please speak to your Manager or External Consultant, or contact us. If you prefer, you can also visit our Investment Centers.
See the information note on default on credit agreements and the out-of-court support network.
The Foreign Account Tax Compliance Act ("FATCA") is a United States (US) law aimed at combating tax evasion by non-tax-exempt US taxpayers (known as US Persons) in relation to income or other investment gains obtained outside that country.
This system came into force on July 1, 2014 and applies to all financial institutions around the world.
In order to facilitate the implementation of the FATCA system, several countries, including Portugal, have already confirmed the existence of an intergovernmental agreement (IGA) with the US that allows the annual exchange of tax information. These countries have undertaken to include FATCA in their legal system.
Foreign Financial Institutions ("FFIs"), which include Best, must identify customers known as US Persons. All banks and financial institutions based in Portugal will be obligated to identify and report information on the financial assets held by their customers identified as US Persons annually to the Portuguese tax authorities.
Best promoted joining the FATCA system through a group-wide program in the various jurisdictions in which it is represented.
Best strove to join this system on the date it entered into force, July 1, 2014.
For the purposes of FATCA, customers with any of the following characteristics will be considered US Persons:
American citizenship, including those with dual nationality and an American passport, even if they reside outside the US.Holdership of a Green Card.Place of birth in the US, except for those who have renounced citizenship.Permanent residence in the US or substantial presence (has resided there for at least 183 days in the last three years, with specific rules on how this is determined).Entities incorporated under US law.Foreign entities with end beneficiary owners who are US Persons and who directly or indirectly hold a share of more than 25% in the company's capital (Substantial US owners).FATCA has no impact on most Best Bank customers.
Best has already adapted its account opening procedures in order to collect the information required to correctly characterize its customers who are US Persons within the scope of FATCA.
Best also reviewed the information in its database in order to identify customers characterized as US Persons within the scope of FATCA.
Additional information can be found on the IRS website at: www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA.
The Common Reporting Standard (CRS) is a scheme developed within the Global Standard for Automatic Exchange of Financial Account Information in Tax Matters — a model presented by the Organisation for Economic Co-operation and Development ("OECD"), with a view to combating cross-border tax evasion and avoidance worldwide, relating to assets and income or other investment gains obtained in countries other than the customer's tax residence.
Portugal was one of the first countries to sign up to the Multilateral Convention formalized by the OECD, and the European Union ("EU") has signed up to this scheme through the publication of Council Directive 2014/107/EU, which requires Member States to transpose it into national law, thus formalizing the obligation to exchange information between tax authorities for tax purposes.
This scheme, which has been in force since January 1, 2016, applies to all financial institutions in participating countries.
As such, since 2017—relating to the 2016 fiscal year—Best Bank, like all banks and financial institutions based in Portugal, has been obligated to identify and report tax information on its customers classified as residents for tax purposes in any of the remaining CRS participating countries, to the Portuguese tax authorities.
The transposition of the European Directive into Portuguese law requires financial institutions to comply with the principles set forth; this system was implemented at Best Bank on January 1, 2016, the date on which the CRS system entered into force in all participating countries.
In compliance with CRS principles, Best Bank customers holding financial accounts and possessing any of the following characteristics shall be considered to fall within scope of the system:
Individuals with a tax residence in any country participating in the CRS.Non-financial entities (active or passive) with a tax residence in any country participating in the CRS.Passive non-financial entities with a tax residence in a country not participating in the CRS, but where at least one of their beneficiary owners has a tax residence in a country participating in the CRS.Conversely, the following types of customer are excluded from reporting within the scope of CRS:
Active non-financial individuals or entities with a tax residence in any country participating in the CRS.Passive non-financial entities with a tax residence in a country not participating in the CRS with no beneficiary owners that have a tax residence in a country participating in the CRS.The following entities are also excluded, even if they have a tax residence in countries participating in the CRS:
Entities listed on stock exchanges, or entities related thereto.International organizations.Central banks.Financial institutions.Other entities with accounts that have low risk of tax evasion.Note: "CRS participating country" means all countries that are members of the system, except the country of the reporting financial institution.
The CRS has no major impact on Best Bank customers, as most customers with a tax residence outside of Portugal were reported under the Savings Directive (replaced by the CRS scheme, which is more comprehensive in terms of the information to be reported).
Best Bank has already adapted its account opening procedures in order to collect the information required to correctly characterize its customers with a tax residence outside of Portugal.
Best Bank also reviewed the information in its database in order to identify customers characterized as reportable within the scope of CRS.
