The banks of Russia’s VTB Group will gradually cease servicing its 2,000 US clients to comply with the requirements of the Foreign Account Tax Compliance Act (FATCA), daily Izvestia reported on Thursday.
“VTB has registered in the US’ Internal Revenue Service (IRS) to comply with the FATCA and is ready to operate in accordance with it on its own. To minimize the risks VTB has ordered its US branches to gradually stop providing services to American taxpayers. This refers to households and corporate bodies,” a VTB spokesman told Izvestia.
Other Russian credit organizations are considering similar measures, the daily reported.
The group does not plan to terminate current agreements with the clients, but will not prolong them.
The FATCA obliges banks to send information about US clients and their transactions to the IRS and to avoid tax fraud committed by US citizens. The act will come in force on July 1.