During peculiar Military Operations, hunting for Russian oligarchy increased, even in the so - called taxation havens. The United States has overseen its financial activities for years.
As part of this investigation, they most likely submitted a comprehensive paper to the Cypriot authorities, including a list of companies and people who helped circumvent sanctions by a billionaire Aliszer Usmanov. Apparently, it was only 1 of the 3 dossiers prepared by the United States. Sanctions besides subordinate to companies that helped circumvent sanctions by Roman Abramovich. As a result, Cyprus has ceased to be a certain place to defend assets exported from Russia. At the same time, the West led a selection among Russian oligarchs. Under his impact were the “dirty” oligarchs, but “clean”, loyally cooperating with the West, were spared. Before tanks moved and cannons fired, there was a fierce fight between Russian, Ukrainian and Western capital in Ukraine.
External control of the Russian economy
In Russian “patriotic” publications, 1 can see that it was these “clean” oligarchs from outside who led the Russian economy, and the squad Vladimir Putin She was only affected by limited influence. The "unruly" oligarchs and their capitals cannot return to Russia due to the fact that they are subject to sanctions and freezing. The “clean” oligarchs are not subject to restrictions and direct their interests, and this remains 1 of Russia's crucial means of contact with the outside world. In 2023, the Central Bank of Russia reported on the scale of assets of the Russian capital of origin, as well as how much capital from outside went to Russia. Russian assets abroad were over $1.6 trillion. Part of the assets are reserves frozen at the beginning of peculiar Military Operations. Further capital frost continues. According to Russian records, only 10-20% of assets have been arrested.
However, the question arises as to whether the West cannot find the remaining assets, or does it refrain from revealing them, and why? Or possibly the links between Russian and Western capital do not let his separation and separate sanctions against him? It cannot be excluded that an additional confiscation of the "discovered" Russian capital will be used, which the Government of Canada is most inclined to do, due to the many Ukrainian emigration there.
According to the prof. Valentina Katasonova, president of the Association of Economists of Russia, there is no crucial activity in Russia for the conversion of imports through its own production, and this is due to the fact that most Russian economics are guided “from outside”. This external management takes place through companies registered in taxation havens. They do not have physical assets, only financial assets that are possibly located in the Bahamas, Panama or anywhere else. The list of taxation havens is well known to all curious parties. There are besides partial taxation havens, e.g. Ireland, Cyprus, Luxembourg. This is why abroad companies and “clean” Russian businessmen influence, in his opinion, the real, physical economics of Russia.
This ‘external’ management was so mostly of interior origin. However, it cannot be rejected that it has made decisions, possibly coming out of its purely business interests, but besides according to suggestions and recommendations given by countries that are curators and direct these taxation havens. And those countries that actually run taxation havens are the United States and the United Kingdom. According to Katasonov, under the conditions of sanctions, this hypothesis is visible and obvious. The awareness of danger from these directions is increasing. This is explained by Putin's reluctance to wage a full-scale war with Ukraine and many examples of “swindling” him by Ukrainians and Americans.
W Duma was prepared a task to retreat Russian capital from taxation havens, after the first sanctions against Russia in 2014, which provided for the re-registration of all Russian companies under Russian jurisdiction. As for those that would not re-register, their assets in Russia were to be nationalised. But this legislative process was halted and the bill was not adopted, due to the fact that according to prof. Katasonov, 1 of the deputy prime ministers gave the task a negative "assessment". Thus the government was on the other side than the Duma, in opposition to the right cause. This happened despite the command to velocity up the withdrawal of Russian capital from taxation havens, issued in president Putin's message. The government, said Katasonov, is actually torpedoing all specified initiatives. most likely to the satisfaction of many members of the Duma.
In the conspiratorial concept of Katason, Russian oligarchs affect economical and political relations in Russia, actively utilizing the law of taxation havens. There is most likely any secret agreement between the oligarch parts, concluded immediately after February 24, 2022, and possibly much earlier, on the management of Russian external economics, but not by the believers Putin oligarchs, Kremlins, or Duma, but by their Russian geopolitical opponents. Valentin Katasonov stated that the United States through companies in taxation havens could influence Russian economics. To him, Russia's main enemy is Elvira Nabiullina, serving as president of the Central Bank of Russia, which should save the country's economy from imposing sanctions for starting a war in Ukraine. In fact, through its anti-inflationary policy and maintaining advanced interest rates increases production costs, thus contributing to the burial of Russian economics.
Katasonov estimated that the number of frozen Russian assets would not increase soon. It was the beneficiaries of taxation havens themselves that formed the United West for the impact on Russian economics. Work on sanctions against Russia began in the West 2 months before peculiar Military Operations. And then these oligarchs who are not subject to sanctions were besides identified.
Professor Katasonov believes that the generation of these "good" oligarchs even began much earlier, erstwhile the russian Union inactive existed. The Russian authorities were unable, unlike the West, to conduct the right personnel policy in business and so the "toxic" oligarchy with the state apparatus grew. Consent to advance nationalism was to postpone attention from corruption and the increasing wealth of oligarchs.
Blocking or confiscation of Russian assets
Western banks make large money in the Russian-Ukrainian War. They were not curious in disclosing all Russian assets and have been earning from the beginning on granting resuscitation loans to Ukraine from the Russian funds arrested. In 2024, the European Union decided to allocate the profits generated by frozen Russian state assets to support Ukraine. Central securities depositories located in the EU (i.e. national or global financial institutions that manage the settlement of securities specified as shares and bonds) with Russian state assets and reserves of a value exceeding EUR 1 million will transfer the net return on aid to Kiev after 15 February 2024. The profit generated before that date is to be retained by central deposits as collateral for, inter alia, the possible procedural costs resulting from the activities of the Russian Federation.
There was no legal basis for the confiscation of Russian assets, and it could besides entail the confiscation of western assets in Russia. And they would most likely be much larger assets. Therefore, freezing them was very convenient and beneficial especially for Western banks. Frozen deposits were what bankers can dream of, as a warrant of stability, due to the fact that they cannot be withdrawn and fresh loans can be granted. They have already made considerable profits, and now they must share them with governments and Ukraine. It was due to the fact that the bankers did not like the thought of confiscating Russian assets, due to the fact that they would gotta give them back to the State, and freezing them more suited to them, due to the fact that they had contributions which were ‘down’ and which could not be withdrawn but which could be traded on the credit market.
The West has not yet given up the course to confiscate Russian assets, for now it is more convenient to keep them frozen and enjoy percentages from trading them on the market. The same was actual of the frozen assets of Libya and another countries. It is so in the interest of financial capital that this frost should be eternal. And they will be frozen until he against whom it is directed does not do what the United States expects of him. However, confiscation proposals may be implemented under certain conditions. The assets of the Russian oligarch have already been confiscated in the US Konstantina Malofieeva $4.4 million.
According to Katasonov, many oligarchs were active in violations of the law during universal privatization and there are detailed dossiers on them. There is most likely an agreement with government officials not to disclose these papers in exchange for loyalty to Putin’s crew. The government has conducted a privatisation audit and has compromising papers and on these "good" and on these "bad" oligarchs.
‘Share’ of Russian deposits
It is hard to tell on what basis the Russian oligarchs accepted that Cyprus was a safe place. In 2013, so just before Majdan, the banks in Cyprus carried out a haircut. After the 2007-2008 crisis to save Greece's finances, banks in Cyprus were forced to cancel Greece's debts. Greece was rescued, but Cypriot banks were drowned. There was then an thought to save Cypriot banks in 2 ways at the expense of customers – either freezing bank deposits or converting any deposits into investments, i.e. turning the bank's client into its shareholder.
Bank deposits have been ‘sliced’, on which Russian customers have peculiarly lost. And that was a precedent that could be utilized in the future for frozen Russian assets. But this is besides an example of how Russian capital was fought not only in Ukraine. The authorities of Canada, the USA and fresh Zealand have already tried to introduce amendments into their government that would save banks at the expense of customers' money. And the crisis in the banking strategy is visible after the collapse of banks in the US, Europe – it is not much better in Russia. All oligarchs must remember Cyprus' experience. However, Russian citizens' deposits in abroad banks exceed 1.4 times their deposits in Russian banks, and in Russian banks decrease and in abroad banks grow. They grow in Cyprus, United arabian Emirates and Kazakhstan. And these banks were checking customers, Russian clients. The financial aristocracy from taxation havens has a dilemma. He is afraid to return to Russia due to the political situation, and looking at the problem clearly: safe taxation havens no longer exist.
The hybrid war is so taking place on many fronts. In this fight, the United States attracted customers to their banks or zones that they controlled. As a result, even these "good" Russians do not have much choice. erstwhile the safe alternate was the United arabian Emirates, but present they are no longer. It is hard to identify a place to which the assets of the oligarchs can move, not only Russian, so that they are not noticed in the US. Secret and multi-stage flows, however, take time to detect and control them.
Russian authorities in 2018 had the thought of creating 2 specified peculiar administrative regions (SAR), 1 in the Far East, and the another in Kaliningrad. But by February 2022 only about 200 companies appeared in these regions. The Oligarchs do not make decisions on their own – they do so by those who run them (the capital or the country to which they are business-related). However, even specified undecided oligarchs are needed at specified an acute phase of the present war. Therefore, so far in the West there is no expropriation of these oligarchs.
In the framework of sanctions and the fight against Russian capital, the European Union has declared Russia a "tax haven", which has active difficulties and additional taxes on Russian capital as well as on European capital cooperating with Russian capital. The task to destruct taxation havens is for the present day a litmus paper that shows the arrangement of forces and groups in the Russian Federation. Even in Duma there were fewer daredevils who signed specified a project.
Putin's squad was placed in the global community against their will to fight inclusive capitalism. But she fought him reluctantly and to a limited extent. There are already over 90 countries in the list of hostile states of Russia, and yet the sum of Russian abroad investments is inactive growing.
Only the Head of the Investigative Committee at the Petersburg Legal Forum Aleksandr Bastrykin called for the nationalisation of many industries due to Russia's mess. In turn, at the Petersburg economical Forum, a number of speakers called for immediate further privatisation (e.g. Nabiullina, Kostin, Orieszkin, Bielousov). Putin said that "deprivation will not be." This shows that even in authoritative structures there is simply a fight against conflicting interests. On the 1 hand, the elite is exporting capital abroad and developing abroad countries, and on the another hand the Putin authorities are calling for the defence of economical sovereignty. Around $227 billion was exported in 2022. It is hard to identify the countries to which the capital was transferred as the Central Bank restricted access to this information. The head of the Central Bank of Russia Nabiullina even stated that no outflow of capital was there, that these were just import charges. According to Katasonov, Nabiullina was in fact lying, and capital exports have been record-breaking for 30 years. Unfortunately, the fact is now profoundly hidden by the bank.
Direct investment means creating fresh jobs. As a rule, this capital flows from a country stronger to a weaker country to a more intensive exploitation. abroad capital came to Russia primarily to the oil and banking sectors, and to construction. The automotive manufacture developed with the aid of abroad capital, mainly included the assembly of cars which served to exploit cheaper labour. This did not satisfy the structural needs of the Russian economy.
Russian capital from Cyprus
After the dissolution of the USSR, due to the deindustrialization of Russia, Russian capital invested in the inactive existing in Ukraine device industry, banks and construction. And later, erstwhile Ukraine applied anti-Russian sanctions, Ukrainian capital besides began to be displaced from Russia. Russia's imports from Ukraine began to fall clearly before Majdan, as of 2011, and from 2015 he hesitated and was about constant.
In the atmosphere of common accusations and ongoing deindustrialisation, conventional economical and individual ties began to fade. Ukraine began to free itself from semi-peripheral control of Russia. But capital began to flow from Cyprus, the Netherlands, Austria, the Virgin Islands, where Russian capital traditionally protected. Russian investments in Cyprus were respective times larger than in another countries, and hence they flowed to Ukraine. Cyprus' investments in Russia in 2020 were besides crucial and amounted to more than EUR 115 billion and 120 billion in 2021. Russian capital flowing through Cyprus gained taxation relief. Most of the capital that came from Cyprus to Ukraine is Russian capital, which thus tried to keep control of Ukraine.
Russian capital was besides 1 of the main investors in the russian territory of another countries, thus confirming its ambition to be an economical leader in this area.
The failure of Ukraine meant for Russian capital the failure of a crucial origin of additional value, the suppression of Russian direct investment. economical contradictions proved to be an crucial origin of the Ukrainian crisis and the beginning of the peculiar Military Operations, through which Russian capital tried to leave Ukraine in its sphere of influence. By the way, they showed their allies decisively in the fight for the protection of their investments, the right to draw additional value in the russian area and decisively in the fight against another capital. This was expected to halt these countries from getting out of control of Russian capital. This may have been confirmed in Belarus' attitude, which, as the sole CIS state, officially supported peculiar Military Operations in Ukraine.
The Neoliberals of Putin's squad talk about the continuation of "budgetary rules", do not want to step out of the WTO. Critics of this crew accuse her of keeping Russia in the function of a colony and natural Western background. For Neoliberals, they collected currency for natural materials in abroad accounts and speculated it to sustain the favorable rate of ruble. The policy of exporting capital from Russia, purchasing yachts, real property and abroad tourism abroad provided for the ruling “political class” and oligarchs and their clientele. The alleged budgetary rules are the Jesuit mechanics for concealing income and capital exports.
Even before peculiar Military Operations 40% of Russia's oil trade income was immediately frozen in abroad accounts to keep a advanced dollar rate, beneficial to the US and exporting oil resources. While holding money abroad, Russian oligarchs actually financially supported the US economy and another highly developed countries. No wonder Dmitri Doskov, president Putin's press secretary, with naive sincerity, confessed that he did not realize why the West sanctioned them erstwhile they did so much good for the West.
The Reorientation of Russia to the East
Putin's squad has integrated into planet economics as a natural resource for the West, destroyed the interior manufacture and the Russian economy is no longer able to absorb the gas it produces, but besides coal, steel, colour metals. It is besides incapable to consume the surplus grain resulting from a drastic simplification in cattle population. Russia has stopped or reduced the production of many commodities, imports even many foodstuffs, including basic products specified as dairy products, meat or eggs. And sanctions do not let the import of modern technologies, machines and a number of consumer goods.
Russia will pay dearly for the reorientation of its economy to the East and its relations with China. For any time, she paid for Baikal water, which is the largest reserve of clean water on Earth, and oil and gas sells to them with a 40% discount. any economists believe that the European marketplace cannot be replaced by a Chinese market. Gas extraction by Gazprom decreased by 30-36%. Russia's share of the European gas marketplace has fallen from 40% to about 8-12%. As a consequence of sanctions and advanced own interest rates, the Russian marketplace is flooded with Chinese goods, which is an announcement of fresh difficulties. Russia's exit from the problems could be integration within BRICS, but it's a long and complex process.
Even if it seems hard to prove that these insignificant contradictions were the origin of the peculiar Military Operation, it does, however, let a distraction of the majority of the population from the increasing wealth of oligarchy (not only in Russia and Ukraine) and these interior problems and promise to settle them as "less important" now, after the winning conclusion of the peculiar Military Operation.
Dr Edward Karolczuk
In the photo: Roman Abramowicz (left) with the president of Israel (for Wikipedia)
Think Poland, No. 37-38 (8-15.09.2024)
