As an American FATCA help the Russian economy

You’re just over a month to prepare for the provision of the first Russian banks reporting FATCA. In the future, Russia will reach the full exchange of information with the United States, who also contribute to the development of the domestic economy.

By June 29, the Russian banks will be required to provide the first reports to the tax office US (Internal Revenue Service, IRS) information available among their American customers taxpayers. Addressed financial institutions in other countries the requirement to send the relevant data to the IRS contained in the famous law “On taxation of foreign accounts” (Foreign Account Tax Compliance Act, FATCA). In this case, the original date of the first report had been scheduled for March 31, but then it We decided to move. Just IRS reported more than one thousand. Russian financial institutions (mainly banks). And as on the background of the current aggravation of geopolitical negotiations on a bilateral agreement providing for the mutual exchange of relevant data between the US and Russia turned out to be curtailed until the flow of information will go only in the US goal. However, as noted by some analysts, other states wishing to conclude an agreement with the necessary the United States has long made it. And Russia, if hurried, it could – on the eve of the Olympic Games in 2014 – to sign a similar document, generally prepared by December 2013 Well, after due to the events in Ukraine, relations between Moscow and Washington have deteriorated sharply, Now, one way or another, the Russian banks have been one on one with the IRS. If that is still not resolved a number of issues, the solution of which depends on the Russian side, said “News Economy” partner, PwC Legal Maxim Kandiba. In particular, he stated , Law 173-FZ of the Russian banks prescribed before sending the relevant information to the United States, pre-send it to the central bank, the Federal Tax Service and the Federal Financial Monitoring Service. However, the order and amount of such information is still not properly registered regulation. As well as not regulated and the base against which Rosfinmonitoring may prohibit domestic banks addressed to the American tax authorities send information. In addition, encryption and data transmission on a special electronic system for Russian companies are complicated by the fact that the proposed codes of American developers are not certified by the FSB. Therefore, market participants are at risk of being faced with a choice: whose prescriptions ignore – Russian or American institutions – with the promised sanctions and fines IRS? And this problem – as we approach June 29 – is becoming increasingly important, stated partner PwC Legal. In fact, said Senior Manager of Corporate Finance Department of Deloitte CIS Rustam Mukhametshin, left there was only one month: in view of the that reports to the Russian authorities, banks are required to submit within 10 days prior to sending them to the United States. But they managed to do it, in theory, to regulate the procedure for granting himself these reports should at least by 15 June. However, as experience shows, if necessary, the Russian power structure capable of promptly adopt the necessary documents.

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By the way, and the Law 173-FZ “On the Specifics of financial transactions with foreign citizens and legal entities” was approved in record time (the State Duma passed its June 20, 2014, then reviewed the document, the Federation Council, and by June 30, he was signed by the President) . According to available information, the relevant projects have already been prepared by government agencies. So long as the chances that the government and this time will have time to resolve the issues raised by the banking community, including certification of data protection by FATCA, summed Mukhametshin. The latter problem, however, in the “Alfa-Bank” is not considered significant. As suggested here, “consulting agency deliberately exaggerate.” While the Russian legislation does not stipulate a mandatory requirement for the protection of information is certified means of cryptographic protection of information (CIPF). There are certain conditions where such a requirement arises, but not in this case, explained in the bank. However, the press service of “Rosbank” pointed out the need “Russian compliance with the regulation and FATCA, especially as it relates to encryption and data.” As reported here, taking into account the requirements of FATCA, concerning reporting to the authorized body the United States, the bank determined for themselves the priorities related to the identification of individuals, details of which should be reported to the IRS, and the preparation of correct Reporting Procedures. In this case to identify persons subject to the requirements of FATCA, were significantly modified processes to receive customer service that, among other things, also required changes to the IT system. At the moment, most of the questions that have arisen in connection with the statements in the IRS, in the “Rosbank” resolved informed in the press service. In practice, said Rustam Mukhametshin, many Russian banks have begun to address issues FATCA only in May-June 2014, while US banks, for example, that puzzled even in 2010-2011. That is why one of the main lessons of the current preparations for the interaction with the IRS is that the preparatory work on the connection to European counterparts FATCA – CRS should not start at the most the last moment, has formulated a senior manager of Corporate Finance Department of Deloitte CIS. Recall, the actual connection to the Russian accounting standards common Common Reporting Standards (CRS) – in the framework of accession to the said Convention of the Council of Europe and the OECD on mutual administrative assistance in tax matters – is expected in 2018 Upcoming innovations make it easier for banks because they are regulated at the level of the overall document and practically will run-on FATCA. At the same time simultaneously, along with the negotiations on the European track, it would also be reasonable to resume consultations with the US side to ensure the full two-way communication.

In order to effectively strengthen the ranks of the world International in the fight against tax evasion in offshore and care – in accordance with modern global trends. At the same time to increase the attractiveness of their own economy in the eyes of other taxpayers Russian side will actively develop industrial and agricultural production together with the services sector in every possible way to this end, reducing infrastructure costs, and corruption (the successful fulfillment of the last condition, by the way, also has promoted to full cooperation within the FATCA). With proper management of designated task quite feasible for the people once in a short time managed to relocate their factories to the Urals and form economy, ensure its victory in the Great Patriotic War, in which the United States, who would not say today were on the sidelines.