Good Corporate Governance Principles

We are determined to achieve the sustainable and steady growth and to increase the long-term business value with legitimate, transparent and auditable operation. In addition, we are committed to integrity as important foundation considering risks, responsibilities and fair treatment to stakeholders and all relevant parties together with supporting sustainable economic, social and environmental development.

To achieve such purposes, these Good Corporate Governance Principles are set up in accordance with the good corporate governance criteria stipulated by the Stock Exchange of Thailand (SET), the Securities and Exchange Commission (SEC), and Thai Institute of Directors Association (IOD) as well as in line with Banking Industry Code of Conduct and the ASEAN Corporate Governance Scorecard (ASEAN CG Scorecard).

The Board of Directors has approved these Good Corporate Governance Principles as the guideline for operating the business and improving the business operation standard to achieve international acceptance. These Principles also serve as the behavior framework to be strictly adhered to by all directors, executives and employees in performing their duties. In addition, they are the basic guideline to be applied by its group companies by either adopting these Principles or creating their own good corporate governance principles in alignment with their nature of business.

To ensure that these Good Corporate Governance Principles correspond to the situation and business environment and all relevant laws and regulations, the Board of Directors has assigned the Legal Group to review these Good Corporate Governance Principles every year or without delay if there is any significant change before further proposing to the committees overseeing corporate governance and the Board of Directors, respectively for consideration and approval.

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Foreign Account Tax Compliance Act (FATCA)

What is FATCA?
FATCA which stands for the Foreign Account Tax Compliance Act, is a United States law. The main purpose of FATCA is to prevent individuals and juristic entitles with U.S. person status from avoiding taxation by holding accounts, for financial transaction purposes, with financial institutions outside the U.S.A.

FATCA requires foreign (i.e., non-U.S.) financial institutions (“FFIs”), including commercial banks, to report information about accounts held by U.S. individuals and U.S. owned juristic entitles and income credited to such accounts and in some cases to withhold tax on withholdable payments paid to certain accounts and remit the withheld taxes to the U.S. Internal Revenue Service (IRS.)

How does FATCA affect financial institutions?
FATCA requires that FFIs, including commercial banks, either agree to participate in the FATCA program by entering into an agreement with the IRS to report information on financial transactions of their U.S. individual or U.S. owned juristic customers to the IRS on an annual basic or be subject to withholding tax on any U.S. source income and potentially gross-proceeds from transactions in certain assets as prescribed under FATCA.

Why do Thai Financial Institutions have to comply with FATCA?
FFIs, including commercial banks, In Thailand often have direct investments in U.S. assets, such as equities of U.S. corporations of U.S. government bonds, and/or a substantial volume of financial transactions with financial institutions and commercial banks worldwide. Therefore, In order to avoid being subject to withholding tax on income associated with these investments or from being denied the right to engage in financial transactions by other participating financial institutions in Thailand began to cooperate with the IRS’s requirements under FATCA, by completing the FATCA registration process from April 2014.

What is the impact for Thai financial institutions’ customers?
From 1 July 2014, Thai financial institutions need to request additional information from customers wishing to enter into financial transactions or opening new accounts. Customers will normally be requested to complete a type of U.S. person self-identification questionnaire created to assist the financial institution in its determination of the status of the account holder or payee, as either a U.S. or non-U.S. person, For those customers who are not specified U.S. persons and don’t appear to be U.S. persons, no further action should be required upon completion of the form, However, if a customer (i.e., an account holder or payee) is a U.S. person or appears to be a U.S. persons, they will be required to complete an IRS form in which the customer declared his or her U.S. or non-U.S. status to the financial institution.

Questions & Answers
Q: Are all Thai commercial banks complying with FATCA?
A: Yes, all Thai commercial banks are FATCA compliant banks. They have entered into agreements to comply with FATCA, and will collect information from 1 July 2014 onwards which support identification of customers’ as either U.S. individuals or U.S. owned juristic status.

Q: Why do Thai individuals or juristic customers have to complete a self-identification questionnaire?
A: Under FATCA, from 1 July 2014, banks must conduct identification due diligence on all customers executing certain types of transactions with them, (e.g. opening a new deposit account, purchasing investment units, fund units or certain life insurance policies, etc.,) to determine if the customer is a U.S. person or an entity owned, either directly or indirectly, by U.S. person, based on certain indications of U.S. status. To help facilitate this process, Thai commercial banks have jointly created a standardized self-certification questionnaire for customers to confirm their FATCA status. A U.S. person status is not determined merely by U.S. citizenship. Customers may have other indications of U.S. status, such as U.S. place of birth, U.S. address, etc.

Q: What are the indications of potential U.S. status?
A: Under FATCA, the indications of potential U.S. status include:
For individuals

• U.S. citizenship, U.S. place of birth, U.S. permanent residence (i.e., green-card);
• a current residence or contact address in the U.S.;
• a U.S. telephone number;
• a power of attorney authorizing other persons with U.S. residence to handle accounts on the individual’s behalf;
• a temporary residence in the U.S. or having been present in the U.S.A. for more than 183 days.
For juristic entities
• a place of incorporation in one of the States of the U.S.;
• being a U.S. related company with U.S. shareholders owning shares, either directly or indirectly, in excess of 10 percent;

Q: What is the required action if customers who are U.S. persons or appear to be U.S. persons wish to enter into financial transactions?
A: Customers will be requested to complete any of the following self-identification form:

• Form W-9 to verity their U.S. individual or juristic status and identify their Tax Identification Number (TIN);
• Form W-8BEN to verify their non-U.S. individual status, together with supporting documents; or
• Form W-8BEN-E to verify their non-U.S. juristic status, together with supporting document.

Q: Will the banks impose withholding tax on U.S. individuals or juristic customers on behalf of the IRS?
A: If U.S. individuals or U.S. owned juristic customers cooperate and comply with the FATCA requirements, the banks will have no duty to withhold tax on behalf of the IRS but will merely compile and report information on these accounts and financial transactions to the IRS.

Q: Are the banks required to report information of all customers to the IRS? What is the schedule of such report?
A: The banks will report information of their U.S. individual or juristic customers only, such as account names, addresses, TINs, account numbers, account balances, etc. This report is made on an annual basis.

* The banks reserve the right to request additional documents from customers and/or to comply with their agreements with customers who open an account.
* This document is intended only to provide information to customers of financial institutions and commercial banks, and is not advice or an offer of any advice on the U.S. taxation law. Should you have any questions relating to such law, please seek advice from your professional tax adviser or obtain additional information on www.irs.gov/FATCA

Good Corporate Governance Principles

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