German Lenders Terminate Securities Accounts for U.S. Citizens
HVB, UniCredit SpA’s German unit, told U.S. customers that from Jan. 1 they would no longer be offered investment services, Markus Huber, a spokesman for the Munich-based firm, said by phone today. Deutsche Bank took similar action earlier this year, said Anke Veil, a spokeswoman for Germany’s biggest bank.
“Because of increased requirements for customers and banks as part of the Foreign Account Tax Compliant Act, we were forced at mid-year 2011 already to terminate securities accounts of U.S. citizens,” Frankfurt-based Deutsche Bank said in a statement. “This has affected only a small number of our customers.”
The act, known as FATCA, requires overseas financial companies for the first time to identify their American customers to the Internal Revenue Service and withhold 30 percent of U.S. interest and dividend payments from account holders who provide inadequate information. The law, set to take effect in 2013, has met opposition from non-U.S. banks, which say it is too complex and costly to implement.
At HVB a “low four-digit” number of existing securities accounts will be terminated at the end of the year, said Huber, adding that customers were informed in September.
The Financial Times Deutschland reported the decision by HVB and Deutsche Bank earlier today.
To contact the reporter on this story: Oliver Suess in Munich Bureau at email@example.com