Finance Ministry to help banks reduce risk of sanctions related to FATCA
MOSCOW, April 10 (RAPSI) – The Finance Ministry has drafted amendments to allow Russian banks to directly report to the US Internal Revenue Service (IRS) about their American clients’ accounts and transactions without violating Russian legislation, and also to close the accounts of those who refuse to disclose this information, Kommersant newspaper writes on Thursday.
The newspaper has a copy of a bill drafted by the ministry to help banks comply with the Foreign Account Tax Compliance Act (FATCA) by cooperating with the IRS. The bill would make two amendments to the law On Banks and Banking.
The first amendment allows banks to report the transactions and accounts of their foreign clients to the tax agency of the client’s home country, provided it is on the Finance Ministry’s list. The second amendment empowers the Bank of Russia to draft regulations on opening and closing such accounts and on transactions with these accounts.
The Foreign Account Tax Compliance Act (FATCA) is a US statute that requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest. In fact, FFIs are required to act as tax agents collecting revenues from sources in the United States and also to close the accounts of recalcitrant clients.