Support The Moscow Times!

FATCA Threatens Russia's Financial System, Official Says

FATCA is a threat to Russia's financial system.

FATCA, the U.S.'s global tax avoidance law, is a threat to Russia's financial system, the head of Russia's money laundering watchdog said Thursday, in the latest outburst from a Russian official against Washington's unilateral application of its own laws beyond its borders.

FATCA, which went into force in July, requires foreign banks to pass information on the accounts of U.S. taxpayers to the U.S. tax service, the IRS, and withhold money on the IRS's behalf. Shirkers face financial penalties on their U.S.-based income.

"In effect our financial institutions will become tax agents, tax informants for the U.S. economy," Yury Chikhanchin, chief of Rosfinmonitoring, was quoted as saying by news agency RIA Novosti. "Similar systems are beginning to come online in other countries, and they undoubtably present a serious risk to our economy."

In substance, FATCA is a sanction, he said, adding that such mechanisms would only be acceptable if they were multilateral.

After FATCA was passed in 2010, the U.S. negotiated bilateral information-sharing agreements with many countries to ease compliance with the legislation. Talks with Moscow collapsed soon after Russia annexed Crimea from Ukraine in March, forcing Russian lawmakers to fast-track amendments to Russian law through parliament to allow Russian banks to comply with FATCA and avoid penalties. 

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more