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5. Any Related Entity must be incorporated or organized in Portugal, and any Related Entity that is a Financial

Institution, with the exception of any Related Entity that is a retirement fund described in paragraphs A through

D of section II of this Annex II or a Financial Institution with only low-value accounts described in paragraph C of

this section, must satisfy the requirements set forth in this paragraph B.

C. Financial Institution with Only Low-Value Accounts. A Portuguese Financial Institution satisfying the

following requirements:

1. The Financial Institution is not an Investment Entity;

2. No Financial Account maintained by the Financial Institution or any Related Entity has a balance or value

in excess of $50,000, applying the rules set forth in Annex I for account aggregation and currency translation;

and

3. The Financial Institution does not have more than $50 million in assets on its balance sheet, and the

Financial Institution and any Related Entities, taken together, do not have more than $50 million in total assets

on their consolidated or combined balance sheets.

D. Qualified Credit Card Issuer. A Portuguese Financial Institution satisfying the following requirements:

1. The Financial Institution is a Financial Institution solely because it is an issuer of credit cards that accepts

deposits only when a customer makes a payment in excess of a balance due with respect to the card and the

overpayment is not immediately returned to the customer; and

2. Beginning on or before July 1, 2014, the Financial Institution implements policies and procedures to either

prevent a customer deposit in excess of $50,000, or to ensure that any customer deposit in excess of $50,000,

in each case applying the rules set forth in Annex I for account aggregation and currency translation, is refunded

to the customer within 60 days. For this purpose, a customer deposit does not refer to credit balances to the

extent of disputed charges but does include credit balances resulting from merchandise returns.

IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special Rules. The Financial

Institutions described in paragraphs A through E of this section are Non-Reporting Portuguese Financial

Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal

Revenue Code. In addition, paragraph F of this section provides special rules applicable to an Investment Entity.

A. Trustee-Documented Trust. A trust established under the laws of Portugal to the extent that the trustee of

the trust is a Reporting U.S. Financial Institution, Reporting Model 1 FFI, or Participating FFI and reports all

information required to be reported pursuant to the Agreement with respect to all U.S. Reportable Accounts of

the trust.

B. Sponsored Investment Entity and Controlled Foreign Corporation. A Financial Institution described in

subparagraph B(1) or B(2) of this section having a sponsoring entity that complies with the requirements of

subparagraph B(3) of this section.

1. A Financial Institution is a sponsored investment entity if (a) it is an Investment Entity established in

Portugal that is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant

to relevant U.S. Treasury Regulations; and (b) an Entity has agreed with the Financial Institution to act as a

sponsoring entity for the Financial Institution.

2. A Financial Institution is a sponsored controlled foreign corporation if (a) the Financial Institution is a

controlled foreign corporation1 organized under the laws of Portugal that is not a qualified intermediary,

withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations; (b)

the Financial Institution is wholly owned, directly or indirectly, by a Reporting U.S. Financial Institution that agrees

1 A “controlled foreign corporation” means any foreign corporation if more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, or the total value of the stock of such corporation, is owned, or is considered as owned, by “United States shareholders” on any day during the taxable year of such foreign corporation. The term a “United States shareholder” means, with respect to any foreign corporation, a United States person who owns, or is considered as owning, 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation.