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Russian Finance Ministry to continue talks in early 2014 to join FATCA

November 29, 2013, 1:38 UTC+3 MOSCOW
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MOSCOW, November 28, 23:26 /ITAR-TASS/. Russia’s Finance Ministry will continue in early 2014 the talks on acceding to the Foreign Account Tax Compliance Act (FATCA), Anton Siluanov, the finance minister, told reporters on Thursday.

“I believe we will continue the talks early next year, as the conclusion of the agreement is postponed to the end of the first six months of next year,” the minister said.

As Itar-Tass reported earlier, Russian banks should receive the status of FFI, (foreign financial institutions), participating in the Foreign Account Tax Compliance Act, the US act on taxation of foreign deposits on Russian territory, in order to make delay-free foreign economic and nontrade settlement in dollars after July 1, 2014.

The Association of Russian Banks stressed that otherwise there would be a high likelihood of extra expenditures of credit organizations not having the FFI status for the reason that US corresponding banks would be retaining 30 percent of all payments passing through the US banking system.

It is extremely important to Russian banks to receive this registration before April 2014, it is held in the Association of Russian Banks. Otherwise Russian banks will not make it to the first review of banks participating in FATCA, which the IRS, Internal Revenues Service of the US Department of the Treasury, plans to draft.

There are two ways to cope with this situation: either Russian banks conclude direct agreements with the Internal Revenues Service of the US Department of the Treasury, or else an interstate agreement should be concluded to allow all banks to receive the FFI status.

The Russian Savings Bank was among the first to raise this matter in the dialogue with the regulator. Bella Zlatkis, the deputy chairperson of the bank’s board, asked the Central Bank in June to intervene so as to help banks avoid serious problems. She said there would be risks involved in a number of payments not suiting the US authorities.

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