Legal framework for exchange: Underlying Agreements: Memoranda of understanding
In the context of exchange of information, a Memorandum of Understanding is an agreement between Competent Authorities that is linked to an instrument allowing exchange. In most cases these will be either an agreement to use that instrument toward a common goal, or an agreement about the way in which certain information will be exchanged under the instrument. Memorandum of Understanding is commonly abbreviated to MOU.
As they are agreements between Competent Authorities, and not states, Memoranda of Understanding will almost always be drafted in non-binding language, in a strict legal sense. They are, however, entered into in good faith and with the intention for both parties to adhere to the agreement.
An example of a Memorandum of Understanding stating a common goal could be that the Competent Authorities agree they will use exchange of information to tackle corruption, evasion, or money laundering.
An example of a Memorandum of Understanding stating the way in which information will be exchanged would be a Competent Authority Agreement setting out the nature, timing, and manner of a given exchange. Another example would be one underpinning assistance in collection under a treaty, which will commonly provide the details each Competent Authority’s debt collection team need, the way and date for calculation of interest, and similar procedural information.