June 2, 2014 / 5:47 PM / 6 years ago

U.S. says 77,000 banks, firms sign up to fight tax evasion

WASHINGTON (Reuters) - About 77,000 foreign and U.S. banks and financial institutions, including some in Russia, have registered with the United States to comply with a new law meant to fight tax dodging by Americans, the U.S. Treasury Department said on Monday.

A money changer holds stacks of US dollar notes in a file photo. REUTERS/Beawiharta

Deputy Assistant Secretary for International Tax Affairs Robert Stack said in a statement that the high level of registrations so far showed “strong international support” for the law, set to take effect on July 1.

The Foreign Account Tax Compliance Act (FATCA) will require foreign banks, investment funds and other institutions to tell the U.S. government about Americans’ accounts that are worth more than $50,000.

Hundreds of institutions in Russia signed up to comply with FATCA despite frosty relations between Washington and Moscow.

The law was written after a scandal involving Americans dodging U.S. taxes through secret bank accounts in Switzerland.

In addition to sign-ups by individual banks, nearly 70 countries have negotiated FATCA pacts with Treasury that allow their firms to comply with FATCA and home-country privacy laws.

Treasury officials broke off FATCA pact negotiations with Russia earlier this year as the crisis in Ukraine heated up.

Hundreds of firms in countries that have such FATCA pacts registered individually anyway, out of an abundance of caution, a Treasury spokeswoman said.

Foreign firms that do not comply with FATCA face a 30 percent withholding tax on their U.S. investment income and could effectively be frozen out of U.S. capital markets.

More than 500 U.S. businesses also registered, including Citibank NA, JPMorgan Chase & Co, various hedge funds and exchange company CME Group Inc.

Publication of the registration list was a key step in the long process of implementing FATCA because it lets firms see who is and is not signed up. The list will be updated monthly as more firms register, said the U.S. Internal Revenue Service.

Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh

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