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Russian oligarchs are being set on Putin

Russian oligarchs are being set on Putin

Tags: United Kingdom, Offshory, Russia, Analytics, Interview, Economics, West, USA

London "will shine" in the British offshore loot, in order to provoke a palace coup in the Kremlin.

London will soon disclose the names of Russian oligarchs who keep their capital in the British Virgin Islands and the Cayman Islands. The parliament will vote for adoption of the relevant amendments already on 1 May. This was reported on Wednesday by The Times.

As the publication reminds, the named offshores, which are under British jurisdiction, for decades did not reveal the identity of the beneficiaries of assets in principle. But now a number of British legislators have opposed this situation. They were concerned that the non-transparency of tax shelters makes it possible to launder unfairly obtained money. And this contributes to the growth of crime and corruption.

A general point of view was expressed by the Labor representative in the House of Commons Margaret Hodge. She introduced an amendment according to which "the government of the country must compel the British overseas territories and dependent territories of the Crown to carry out a reform of transparency until the end of 2020."

The chances that the bill will be accepted are great. According to The Times, a coalition of conservatives, Laborites, representatives of the Scottish National Party and other opposition parties will support the document. According to conservative Andrew Mitchell, Premier Theresa May should make sure that "dirty money" is not hidden under the British flag anywhere in the world.

If you reject the pathos, the goals of combating "dirty money" (which before did not interfere with Britain for some reason!) Look clear. The reform will allow to extract into the light the names of the beneficiaries of offshore companies. Almost certainly among them will be representatives of the political and business elite of Russia. And almost certainly their condition will be impressive. Recall, only in 2017 year, the export of capital from our country by private companies amounted to $ 31,3 billion - this was reported in the report of the Bank of Russia.

As soon as the names of the "figurants" become known, they will automatically fall under the Criminal Finances Act. This law Britain adopted in 2017 year as part of the fight against money laundering, corruption and the financing of terrorism. According to it, the British authorities have the right, in the presence of any suspicion of persons having assets over £ 50 thousand, to inquire about the origin of these assets and to demand disclosure of sources of income.

If the required information is not provided, or the British authorities consider them insufficient, the assets may be arrested. Let's note, while arrests within the framework of the Criminal Finances Act were not widely disseminated. However, the aggravation of relations with Moscow may lead to the aggressive application of this law.

In a word, it is a matter of leaving Russian oligarchs without money. Apparently, the West does not lose hope that the super-rich in this case will revolt against Vladimir Putin and arrange a palace coup in the Kremlin. And even if the coup fails, the Russian economy will still have a hard time.

- The fight against offshore companies began in the time of the financial crisis of 2007-2009, - recalls the chairman of the Russian Economic Society. S.F. Sharapova, Professor of the Department of International Finance of the Moscow State Institute of International Relations (University) Valentin Katasonov. - Even then the opinion was formed that non-transparent tax residences could provoke new waves of the world crisis. As a result, at the meetings of G7 and G20 it was decided in principle to declare a "crusade" against offshore companies. The US led this "campaign".

In 2009, the Americans passed the Law on Compliance for Foreign Accounts (FATCA), the largest step taken by Washington to combat tax evasion by Americans in recent years. In addition, the States called on Europe to move in the same direction. And for this to conclude a multilateral - preferably global - convention.

The project for automatic information exchange was launched by G20 in parallel with the G20 / OECD project on combating the dilution of the tax base (BEPS) several years ago. In February 2014, G20 approved a global standard for automatic exchange of tax information (Common Reporting Standard, CRS), and already in October an agreement on automatic information exchange was signed by 51 jurisdiction. Then it was joined by more 30 countries, including the British Virgin Islands, Belize, Bermuda, Jersey and Guernsey, Cyprus, Switzerland and the Netherlands, as well as Bahrain and Lebanon.

Within this system, banks of different countries must provide each other with the necessary information. And, not necessarily directly - it can be done through authorized state bodies, for example, the tax service.

Russia became 81 participant of the OECD agreement on automatic exchange of financial information in 2016. But we must understand: this convention, in fact, is a framework document. The participating country must subsequently sign bilateral agreements with other participating countries. It is in these documents that specific mechanisms and procedures for the exchange of information are prescribed.

"SP": - With whom did Russia sign bilateral agreements?

- Until the end of 2017 Russia rested with a horn - did not want to sign bilateral agreements with anyone. I think the Kremlin was wasting time, because they understood perfectly well: in this case, the Russian oligarchs will be "exposed". However, the West has tightly pressed on the Russian Central Bank and the Ministry of Finance. The end was that under the threat of introducing new economic sanctions, Moscow began to negotiate with dozens of countries. In particular, the Russian side hastened to state that it would conclude a direct agreement with the British Virgin Islands. For its part, this country has vowed to become a party to bilateral agreements. It is clear: under the dictation of London.

After that, it became clear to the players: an offshore company called British Virgin Islands came "kirdyk".

"SP": - Can you say that the capital from Russia has nowhere to run?

- There is a big "but" in all this story. Moscow literally behind the ears was dragged to sign first the convention on automatic exchange of financial information, and then bilateral agreements. But the US refused to sign bilateral agreements categorically. Say, "it's useless - we have FATCA".

I omit a number of details and conclusions. But the general conclusion is this: the United States actually provoked the world to sign a multilateral convention, but they did not become effective participants in this convention. And they did it for the sole purpose: the States want to become the only offshore company in the world. That's all.

Therefore, to the question of where the Russian oligarchs withdraw their capital - despite sanctions and aggravation of relations with the West - I answer: not to the moon. Most likely, the final point of travel of their capitals is the United States.

In this case, the message of The Times shows that everything is going according to plan. The British Virgin Islands and the Cayman Islands were ordered to live long as offshore jurisdictions. And other exotic offshore jurisdictions will not be available soon. And Washington is only on hand.

SP: - It turns out that the Russian oligarchs, who kept money in the British offshores, long ago withdrew them from there?

"I think these people are carefully monitoring the situation." Although experience shows that many kleptomaniacs are very naive people. And they still believe that money in an offshore holding is as secure as in a Swiss bank.

Andrey Polunin
Free Press
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