Paragraph 4 REMEDIATION AND ENFORCEMENT

4.1: The U.S. Competent Authority and the Netherlands Competent Authority should each seek to ensure that all of the information specified in Articles 2(2) and 4(1)(b) of the IGA has been identified and reported to the U.S. Competent Authority and the Netherlands Competent Authority, as applicable, so that such information is available to be exchanged in the time and manner described in Article 3(5) of the IGA and in Paragraph 3.4.2: Non-compliance with the IGA may be administrative or minor in nature, or may constitute significant non-compliance.4.2.1: Under Article 5(2) of the IGA, the receiving Competent Authority has the discretion to determine whether there is significant non-compliance with the obligations to obtain and exchange information described in Articles 2(2) and 4(1)(b) of the IGA with respect to a Reporting Financial Institution in the other jurisdiction. The U.S. Competent Authority also has the discretion to determine significant non-compliance based on failure to satisfy due diligence, reporting, withholding and other obligations with respect to a Reporting Netherlands Financial institution. The receiving Competent Authority may determine that certain failures constitute significant non-compliance with respect to a Reporting Financial Institution regardless of whether the failure is attributable to the providing Competent Authority or the Reporting Financial Institution. Examples of significant non-compliance are set forth in Paragraphs 4.2.1.1 through 4.2.1.3.4.2.1.1: The U.S. Competent Authority may find significant non-compliance based on a failure by a Reporting Netherlands Financial Institution to report information on U.S. Reportable Accounts, as specified in Article 4(1)(a) of the IGA, or on 2015 and 2016 payments to Nonparticipating Financial institutions, as specified in Article 4(1)(b) of the IGA.4.2.1.2: Failure by a Reporting Financial Institution to correct administrative or other minor errors may, in the discretion of the receiving Competent Authority, lead to a determination of significant non-compliance. The Competent Authorities expect, however, that in the ordinary course a determination of such significant non-compliance would not occur until at least 120 days after the notice specified in Paragraph 4.3.1 is provided to, and received by, the providing Competent Authority (per Paragraph 3.3.4).4.2.1.3: The U.S. Competent Authority may make a determination of significant non-compliance with respect to a Reporting Netherlands Financial Institution to the extent it does not meet the conditions set forth in Article 4 of the IGA, including by failing to (i) withhold on any U.S. Source Withholdable Payment made to any Nonparticipating Financial Institution to the extent required under Article 4(1)(d) of the IGA; (ii) provide to any immediate payor of a U.S. Source Withholdable Payment the information required for withholding and reporting on any such payment to a Nonparticipating Financial Institution to the extent required under Article 4(1)(e) of the IGA; and (iii) comply with Article 4(5) of the IGA with respect to Related Entities and branches that are Nonparticipating Financial Institutions. Lack of compliance with other conditions set forth in Article 4, such as compliance with applicable registration requirements, may also lead to a determination of significant non-compliance with regard to a Reporting Netherlands Financial Institution.4.2.1.4: In the ordinary course, the Competent Authorities anticipate consultation prior to a determination of significant non-compliance.4.2.2: Under Article 5(1) of the IGA, administrative and other minor errors include incorrect or incomplete reporting of information described under Articles 2(2) and 4(1)(b) of the IGA or other errors that result in infringements of the IGA.4.2.2.1: In the event a providing Competent Authority receives a notice from a Reporting Financial Institution or by or on behalf of a Paragraph 1.1.2 Financial Institution regarding an omission or other error in an exchanged report, the report should be amended. The providing Competent Authority should forward any amended reports to the receiving Competent Authority as soon as practicable.4.3: To address non-compliance, the receiving Competent Authority would notify the providing Competent Authority pursuant to Article 5 of the IGA. The notification procedures would differ depending upon whether the receiving Competent Authority seeks to address administrative or other minor errors or significant non-compliance.4.3.1: As provided in Article 5(1) of the IGA, the receiving Competent Authority would notify the providing Competent Authority when the receiving Competent Authority has reason to believe that administrative errors or other minor errors may have led to incorrect or incomplete information reporting or result in other infringements of the IGA. The providing Competent Authority would then apply its domestic law (including applicable penalties) to obtain complete and correct information or to resolve other minor or administrative infringements of the IGA and exchange such information with the receiving Competent Authority.4.3.2:4.3.2.1: Under Article 5(2) of the IGA, the receiving Competent Authority would notify the providing Competent Authority when the receiving Competent Authority has determined there is significant non-compliance with the obligations under the IGA with respect to a Reporting Financial Institution. After such notification of significant non-compliance from the receiving Competent Authority, the providing Competent Authority would apply its domestic laws (including applicable penalties) to address the significant non-compliance described in the notice. The Competent Authorities may consult on the steps needed to address such non-compliance. If the U.S. Competent Authority were to notify the Netherlands Competent Authority of a determination of significant non-compliance, the date on which notification was provided to, and received by, the Netherlands Competent Authority (per Paragraph 3.3.4) would constitute the beginning of the eighteen (18) month period set forth in Article 5(2)(b) of the IGA.4.3.2.2: The Netherlands Competent Authority should notify the relevant Reporting Netherlands Financial Institution of the significant non-compliance determination, including the date the U.S. Competent Authority provided notice of such non-compliance to the Netherlands Competent Authority (per Paragraph 3.3.4). The notice should also indicate that if the significant non-compliance is not cured within eighteen (18) months after the date the U.S Competent Authority provided notice to the Netherlands Competent Authority, the relevant Reporting Netherlands 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.4.4:4.4.1The Competent Authorities intend calendar years 2014 and 2015 to be a transition period for purposes of the enforcement and administration of any data collection, due diligence, information reporting, automatic information exchange, and withholding requirements described in the IGA.The Competent Authorities intend to take into account the good faith efforts of each other, Reporting Financial Institutions, and Paragraph 1.1.2 Financial Institutions toward compliance with any such requirements during this transition period when pursuing enforcement.4.4.2The transition period described in Paragraph 4.4.1 may be extended by mutual written decision of the Competent Authorities.