VTB Group, one of the second-biggest banks in Russia, will gradually stop serving its 2,000 US clients, to comply with the requirements of the Foreign Account Tax Compliance Act (FATCA).
The bank said that from 1 July 2014, FATCA, a US tax avoidance law, will come in force and failing to meet the regulation will cost foreign lenders up to $50,000.
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The FATCA forces banks to send information about US clients and their transactions to the Internal Revenue Service with an aim to avoid tax fraud committed by US citizens.
A VTB spokesman was quoted by daily Izvestia as saying, "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," the spokesman told the publication.
Other Russian credit institutions are also thinking to take the similar steps, the daily reported.
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By GlobalDataVTB noted that loss of US clients won’t influence business performance or its financial indexes. The lender will not terminate current agreements, however, it won’t extend them.
