Find and hide again. New offshore dossier puts Russian oligarchs and businessmen in jeopardy 

Find and hide again. New offshore dossier puts Russian oligarchs and businessmen in jeopardy
The American report targets persons occupying top positions in the Forbes rating Photo: The CrimeRussia

In the framework of its sanctions, the U.S. intends to collect data on possessions and assets of Russian businessmen and make those available to the public. While the oligarchs keep silence, smaller businessmen are figuring out where to hide their capitals. The CrimeRussia reviewed the threats faced by Russian entrepreneurs due to the new sanction measures.

Only 180 days left

Some seemingly unrelated events have occurred in August and laid grounds for a major offshore scandal that may reach its peak in late January–early February 2018. While ordinary Russian citizens haven’t even noticed these events, oligarchs, big businessmen, and corrupt officials already started looking for new places to hide their ‘savings’.

On August 4, U.S. President Donald Trump signed a bill proposed by the Congress and imposing new sanctions against Russia. The new measures are primarily focused on the collection of information about key political figures and oligarchs.

In particular, the U.S. Department of the Treasury, in coordination with the Director of National Intelligence and Secretary of State, must submit, no later than 180 days after the bill approval, an open Report on oligarchs and semi-governmental organizations of the Russian Federation to respective Congress committees. The Report should provide data on key political figures in Russia and oligarchs; their closeness to Vladimir Putin and other members of the ruling elite; their assets and income sources; lists of their relatives, including spouses, children, and parents; their assets, including investments, business interests, and income-generating properties; and foreign companies affiliated with them.

Our
notes

The Director of National Intelligence (DNI) is appointed by the U.S. President with the consent of the Senate and reports to the President. The CIA is a part of the U.S. Intelligence Community chaired by the Director of National Intelligence. Daniel Coats, head of the agency, has been put on the Russian ‘black list’ on March 19, 2015 in the framework of the retaliatory sanctions.

In other words, by January 31, 2018, the special services must submit to the Congress a report about all the more or less significant politicians, businessmen, and functionaries and their assets, including foreign ones. A specific feature of this report is its openness to the public. Anybody may access it and get information on the assets, accounts, and businesses of persons listed in the report. The information about possessions of many Russian citizens is to be declassified in February. The public will become aware of final beneficiaries of companies hidden in offshore territories. Subsequently, new names and data are to be added to the report.

Дэниел Коутсс

Daniel Coats, Director of National Intelligence (DNI)

Panama Papers 

The scandal is expected to be even more high-profile than ‘Panamagate’. At that time, a leak of databases from Panama-based Mossack Fonseca law firm has exposed that the company had assisted its clients in illegal transfers of large amounts of money to offshore territories. The leaked documents covering the period since 1977 and until 2015 have come into possession of the International Consortium of Investigative Journalists (ICIJ). Twelve acting and former heads of states, as well as famous politicians, actors, major businessmen, etc., were mentioned in the dossier. 

The Panama Papers lists names of 6285 Russian citizens, including former and acting politicians. One of the main figures mentioned there is musician Sergei Roldugin who, according to Novaya Gazeta, was the creator of an elaborate network of offshore companies receiving money from major Russian state corporations, including Rosneft, Gazprom, and VTB Bank. 

In addition, the following persons were referred to in the leaked documents: relatives of Aleksei Ulyukaev, ex-Minister of Economic Development; wife of Dmitry Peskov, Press Secretary for the President of Russia; son of Igor Zubov, Deputy Minister of Internal Affairs of the Russian Federation; Andrei Turchak, Governor of the Pskov Region; Boris Dubrovsky, Governor of the Chelyabinsk Region, etc.

Юрий Чайка

Yury Chaika, Prosecutor General of the Russian Federation

The Prosecutor General’s Office of the Russian Federation had promised to check the information contained in the Panama Papers. Yury Chaika had pledged to report the findings directly to the President. A year later, the Prosecutor General’s Office has refused to publish the inquest results. According to the agency, the information included classified data.

Everything is already known? 

The second unnoticed event was the publication of a report produced by the National Bureau of Economic Research (NBER). Its analysts have calculated that Russian citizens keep abroad some 62 trillion rubles ($1.1 trillion). Therefore, offshore accounts store funds equal to 75% of the national income of the country. The analysts have noted that, in general, the Russian citizens keep equal portions of their assets in the country and abroad. It is difficult to define boundaries between various forms of unaccounted assets because of the lack of transparency and financial reporting worldwide.

The document does not specify where the nonprofit research organization had obtained this information. The report says: “It is more difficult to find out who owns this wealth and in what form”.

Our
notes

Founded in 1920, the National Bureau of Economic Research (NBER) is a private, non-profit, non-partisan organization dedicated to objective quantitative analysis of the economy. The organization also researches business cycles. Its experts are determined to predict peaks and troughs of the business cycles and develop parameters describing the state of the economy. James Poterba is the President of the National Bureau of Economic Research.

Based on the above facts, it may be concluded that the western secret services already possess a large bulk of information about the assets of Russian citizens. It is hard to say though how specific and exhaustive is this information. Of course, ordinary Russians with average salaries won’t keep their savings abroad and conceal those – therefore, this refers only to people hiding their businesses or illegal revenues.

Джеймс Потерба

James Poterba, President of the National Bureau of Economic Research

The experts don’t rule out that foreign accounts in countries supporting the sanctions against Russia may be frozen in the future. The assets may also be confiscated as acquired on criminal or illegal gains. For example, the Spanish authorities have seized assets of so-called ‘Russian mafia’ charged with money laundering for the benefit of the state. The analysts believe that the oligarchs may start putting pressure on the President asking to ‘draw in claws’ in the foreign policy in exchange for retention of their wealth. Low-ranked corrupt official do not have such influence and would likely hide their possessions from the American special services in new places.

The upcoming American report targets in the first place persons occupying top positions in the Forbes rating. But who else is hiding wealth abroad? The publication of the open report directly threatens their well-being. Even if the Russian law enforcement and watchdog authorities ignore another great deal of information and recognize the published data ‘classified’ again, anti-corruption organizations would definitely benefit from the forthcoming report and update their dossiers.

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