Russia to suspend automatic exchange of financial information with UK

Russia is adopting countermeasures to London’s decision to discontinue the automatic transmission of financial information to Moscow as part of an agreement under the Organization for Economic Cooperation and Development (OECD).

In response to London’s decision, Moscow will do likewise. On Thursday, September 19, a document was published on the draft regulations portal stating that the UK, as well as the islands of Man, Guernsey and Jersey over which it has sovereignty, will be excluded from the list of countries with which the Russian Federal Tax Service automatically exchanges financial information.

The corresponding decree could come into force from the start of 2020, writes the RBC news agency. From that moment on, Russia would no longer send the UK information about Brits’ bank accounts in Russia in line with the Common Reporting Standard and in accordance with a multilateral agreement under the OECD. The new list of states with which Russia is prepared to exchange financial information includes 88 countries and territories.

RBC notes that this decision will also impact Russians who are the beneficial owners of accounts with British banks. They will not benefit from the concessions which Russia will be introducing in 2020 in accordance with a new law on currency regulation and control.

The new regulation exempts Russian currency residents from all restrictions pertaining to foreign accounts in countries and territories that belong to the OECD and Financial Action Task Force (FATF). Once the automatic exchange of information from Russia ceases, Russians who have accounts with British banks will still be obligated to provide the Russian tax authority with reports on the movement of their funds.

In March 2019, it was learned that London had excluded Russia from its corresponding list, without providing any explanations. According to experts, the UK is one of the three most popular countries where Russians keep their assets (according to the number of open accounts).

  UK, OECD, Russia