Germany-based Augsburger Aktienbank (AAB) has reportedly told customers it will close custody accounts and accounts for clients that are considered ‘United States Persons’.
Additionally, the offering won’t be available to US citizens in the future.
The closures will be effective from 31 March 2021, reported local B2B news website Fonds Professionell, and AAB cited the US’ Foreign Account Tax Compliance Act (Fatca) as the reason for the move.
This is because the legislation requires foreign financial institutions and their US clients to report their financial information to the Internal Revenue Service (IRS) for tax purposes, as the US has a citizenship-based taxation system.
The German bank said that efforts to comply with Fatca increased steadily over the last few years.
The accounts, which include the ones where a beneficial owner is named, will be transferred to a “suitable bank” of which US clients are required to provide the details for the transfer.
Loans, however, will not be affected.
Rejection for dual nationals
Similarly, in the UK, savings platform Raisin said it cannot offer any of its services to dual US and UK citizens.
When asked on Twitter from a potential client why they couldn’t select the US as a place of birth when registering, the firm said: “Unfortunately, Raisin UK is unable to provide financial products to dual UK-US nationals due to Fatca.
“We apologise for any inconvenience.”
