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UK Opposes Return of Russian Business from Offshore

The Russian President warned businesses that the West may attempt to prevent the return of capital repayments to Russia

This article originally appeared at Izvestia.  Translated for RI by Alexei Shestyan

On 19th March, President Vladimir Putin stated in an address at the conference of the Russian Union of Industrialists and Entrepreneurs, that a plan for the decreased reliance of offshore business could be met with opposition from a number of countries – although they as yet remain nameless. As Izvestia understands, the jurisdictions in question are primarily those under the control of the United Kingdom.

"So this is the situation: there is some, I would say, rather alarming information emerging from some countries suggesting that there may be attempts to prevent capital repayments to Russia. This may be due to the restrictions placed on the usage of such capitals, which are in foreign jurisdictions. But it’s worth bearing in mind." - President Vladimir Putin

As explained by a high-ranking conference participant, the issue was discussed at meetings of the government and Kremlin, and information about the potential blocking of the transfer of offshore business in the Russian jurisdiction came from the Federal Financial Monitoring Service.

"In general the blocking of these funds can occur in those districts generally controlled by the United Kingdom. Here we are not excluding the fact that the British government may be taking steps to counter the withdrawal of funds into the Russian jurisdiction. This can be done not just by ‘blocking’ but by using delaying tactics to drag out the process." - noted an Izvestia source.

According to the Commissioner for Entrepreneurs' Rights Boris Titov, the threat of asset lock does exist, as Russian citizens are now under scrutiny from foreign governments as a result of sanctions.

"Blocking and complicating the process of transferring assets into the Russian jurisdiction is possible. The EU countries in this regard, have a less aggressive policy towards Russia. I do not want to point fingers at territories. It’s offshore countries that are controlled largely by Britain and are a part of the Anglo-Saxon world." - Boris Titov.

The Head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin explained:

"Russian citizens withdrawing large sums of money in some jurisdictions or other, may also face questions...These are Britain, BVI (British Virgin Islands) and other islands, under the control of the Crown. This is not a special measure against Russia in the period of sanctions; it is a struggle for preventing capital outflow. We are fighting for the repatriation; they are struggling with the outflow. In this regard, even if it is not a special action against holders of Russian money, a large-scale amnesty of capital and incentives for the return of capital in Russia, will be a cause of concern for the authorities. Vladimir Vladimirovich [President Putin] in this case is not intimidated by saying that if you do not repatriate, you will be in for hard times."

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