MOSCOW, September 4 (RAPSI) – The US Foreign Account Tax Compliance Act (FATCA) is a threat to the Russian financial system, Yury Chikhanchin, chief of the Federal Financial Monitoring Service (Rosfinmonitoring), said at a banking forum in Sochi.

"In effect our financial institutions will become tax agents, tax informants for the US economy," Chikhanchin said.

FATCA, which became effective in July, requires foreign financial institutions (FFIs) to provide annual reports on the accounts of US taxpayers to to the Internal Revenue Service (IRS). FFI which does not comply face financial penalties.

Chikhanchin compared FATCA to a sanctioning instrument. He said that such instruments can be beneficial only if they are multilateral.