It has been several months now that the US has implemented sanctions against Russia through Russian businesses and certain individuals. Several businesses in the US have been shot down (closed pending future notice) and certain individuals are banned from entering US or conducting business in its territories.
In a reported bizarre agreement between the US and the Russian bank, VTB, the latter is collecting information from its current and potential clients about their residence and tax status in the US. The employees and managers at the VTB brunches in Russia and Armenia are asking individuals to answer a question that was not on any of the bank forms before: “Are you a taxpaying individual/entity in the US?” Employees and managers of the bank are telling consumers that the US has “forced” the information collection agreement upon the bank to reconsider the sanctions against the company in the US and worldwide.
What are the consequences? To be honest we are not sure if it is actually the US or Russia, but someone is collecting information that used to be not so easily available before. Many US residents from former soviet countries still have strong ties with the “Motherland” with a financial component. Many of these countries do not have strong ties and agreements with appropriate state and federal entities to be able to collect financial and tax information through the states. As a results it was easy for someone to have bank accounts in countries like Ukraine or Georgia and not report them to the IRS. In an apparent move the US is seeking to change that and make it difficult to hide certain assets in offshore accounts.
Although “declining to answer” is a hard to get option at the branches, if the US is using the sanctions to strong-arm Russian entities in exchange of favorable conditions, then: one, the sanctions are working; two, someone might be collecting information in an unconstitutional way!