101 governments have meanwhile signed the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters (AEI, AEoI) and have thus agreed to send information on foreign account holders to the home tax authority of each account holder, beginning with information from the year 2016 or, for later adopters, 2017.
The defining document, https://www.oecd.org/ctp/exchange-of-tax-information/automatic-exchange-financial-account-information-common-reporting-standard.pdf , describes in its Annex, Section VIII, that a Reporting Financial Institution is essentially every institution that keeps money in user accounts.
Banks have picked this up and will fulfill their obligation. Some banks have warned their customers before beginning to collect user data. Some banks have kept quiet about it. Other financial institutions, for example, bitcoin exchanges that keep user accounts, are very quiet. Some may even be unaware of their obligations under the contract.
Hence my question. If a government signs an international contract, how is that binding for companies in its jurisdiction? Does the government have to inform all effected institutions? Does it have to pass a law? What happens if an institution does not fulfill its obligation? What happens if an institution does not even know its obligation? Is everybody obliged to read every contract which their government signs?
Would a financial institution be obliged to inform its customers before it begins reporting user data that had hitherto been kept secret to the tax authority in each user's home country?