Russian banks cancel US contracts after demands to reveal taxpayer information

© Sputnik/Ruslan Krivobok

Russian banks have been forced to cancel contracts with their US clients due to the Foreign Account Tax Compliance Act (FATCA), law that requires foreign banks to provide information on US citizens' banking activities, a senior Russian official said Wednesday.

The FATCA, which became law in 2010, requires foreign banks to report information on some US clients. If a bank does not comply, it may be subject to a fine. Moscow and Washington were negotiating a FATCA deal acceptable for both sides until March 2014, when the United States suspended the talks over the Ukraine crisis.

"We could not put our national security under risk in this case, this is why a rule was adopted, under which every credit services organization may cancel the contracts with its clients, the US residents, and avoid FATCA regulations this way," Deputy Director of Russia's Federal Financial Monitoring Service Pavel Livadny told journalists.

Livadny added that the banks are now obliged to inform the Russian Central Bank, the Federal Financial Monitoring Service, and the Federal Tax Service of such clients.

"The credit organizations prefer to part with such clients, rather than stay under pressure from US tax laws," Livadny added.

US Congress enacted FATCA to make it more difficult for US taxpayers to conceal assets held in offshore accounts and shell corporations, and thus to recoup federal tax revenues.

Comment: The U.S.'s FATCA, ostensibly designed to make more money, seems only to have had the effect of turning the rest of the world against Americans, and making it harder for law-abiding U.S. citizens living abroad to do so. There's a word for this kind of behavior:

1. Always and inevitably each of us underestimates the number of stupid individuals in circulation.


2. The probability that a given person is stupid is independent of any other characteristic possessed by that person.


3. A person is stupid if they cause damage to another person or group of people without experiencing personal gain, or even worse causing damage to themselves in the process.


4. Non-stupid people always underestimate the harmful potential of stupid people; they constantly forget that at any time anywhere, and in any circumstance, dealing with or associating themselves with stupid individuals invariably constitutes a costly error.


5. A stupid person is the most dangerous type of person there is.

(from Carlo Maria Cipolla's "Basic Laws of Human Stupidity")

See also: FATCA what? How to fight the war on tax evasion, one American at a time

Chomsky: We Are All – Fill in the Blank.

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