SOME ASPECTS OF MODERNIZATION OF THE BANK SECRECY MANAGEMENT MECHANISM WITH THE CONSIDERATION OF INTERNATIONAL COOPERATION BETWEEN UKRAINE AND THE UNITED STATES IN THE TAX FIELD

Abstract

With the focus on current threats to Ukraine’s national security in the context of a full-scale war, the article suggests possible ways to modernize the mechanism of handling information containing bank secrecy within the framework of cooperation between Ukraine and the USA in the tax area. The authors believe that studying the experience of the US legal regulation and application of international treaties on cross-border exchange of financial information will contribute to the creation of a clear plan to develop the national legislation regulating the exchange of information containing bank secrets.

The exchange of information regarding foreign accounts of the U.S. residents is carried out in accordance with the provisions commonly known as the Foreign Account Tax Compliance Act (‘FATCA’), which introduce a reporting regime for financial institutions and implemented in accordance with the terms of cooperation with the partner country. Bilateral FATCA agreement pro-vides two models of cooperation, which may involve the exchange of information uni- and bilaterally. The platform and the main standard for ensuring the exchange of financial information within the framework of the abovementioned agreement is Common Standard on Reporting and Due Diligence for Financial Account information.

The authors believe that in the process of the implementation of the provisions of international treaties, the expansion of cooperation within the framework of FATCA agreement is of particular importance, in order to create a full-featured mechanism for the mutual exchange of information between the United States of America and Ukraine in terms of monitoring the financial activity of Ukrainian citizens and legal entities on the territory of the USA, within the scope of preventing the financing of Russian military aggression against Ukraine, as well as counteraction to legalization (laundering) of criminal proceeds and financing of terrorism. At the same time, the procedure for providing information constituting bank secrecy to international bodies and intergovernmental organizations requires the development of a separate mechanism for the implementation of the processes of collection, processing and transmission of financial information.