Russia and Ukraine: Where does the “dirty” money for Russian oligarchs come from and where is it hidden | international | News

For decades, Russian oligarchs have funneled billions of dollars in shady money abroad, putting it in shell companies to make it very difficult to track down.

Now countries around the world are taking steps to find it.

How much Russian “dirty money” is there in the world?

The American Atlantic Council, an American think tank, says that the Russians have such a thing1 trillion dollars What he calls “dirty money” stashed abroad.

Its 2020 report estimated that a part Four Of this amount controlled by the Russian President Russian President Vladimir Putin and his wealthy Russian associates known as “The few”.

“This money can be exploited and diverted by the Kremlin for espionage, terrorism, bribery, political manipulation, disinformation and many other nefarious purposes,” the report says.

Russian yacht tuning in London. Environmental Protection Agency Photo: BBC World

How did they get the dirty money?

Another US think-tank, the National Endowment for Democracy, says Putin encouraged those close to him to “do it.” Steals from the state budgetextorting money from private companies, and even organizing a complete takeover of profitable companies.

He says that in this way they amassed personal fortunes amounting to tens of billions of dollars.

Russian opposition leaders Boris Nemtsov and Vladimir Milov claimed that between 2004 and 2007, $60 billion in money was transferred from oil giant Gazprom to close friends of Putin.

Eaton Square, central London, has been nicknamed “Red Square” because of the number of Russians who have bought property there. Getty Images Photo: BBC World

The Bandura Papers, published by the International Consortium of Investigative Journalists, suggest that people close to Putin have become very wealthy and can help him pass on his own fortune.

Where is the money kept?

Historically, a lot of this money went to Cyprus, Because there are favorable taxes. For some, the island became known asMoscow in the Mediterranean“.

According to the Atlantic Council, $36 billion in Russian money flowed there in 2013 alone. A lot came of it fake companieswhich are used to hide true owners.

In 2013, the International Monetary Fund persuaded Cyprus to close tens of thousands of bank accounts of shell companies.

The British Virgin Islands are the preferred haven for Russian money. Getty Images Photo: BBC World

British Overseas Territories, such as British Virgin Islands and Cayman Islandsare also my favorite destinations.

A report by Global Witness indicated that in 2018, Russian oligarchs had an estimated $45.5 billion in these tax havens.

Part of this money reaches financial capital such as New York and Londonwhere you can invest and provide benefits.

Anti-corruption watchdog Transparency International says at least $2 billion of property in the UK is owned by Russians accused of financial crimes or links to the Kremlin.

The breadth of Russian money laundering was revealed in a 2014 report by the Organized Crime and Corruption Reporting Project. The report noted that between 2011 and 2014, 19 Russian banks laundered $20.8 billion through 5,140 companies in 96 countries.

How is the money hidden?

The usual way in which Russian oligarchs hide their “dirty money” abroad is through shell companies.

“These few employ the best lawyers, auditors, bankers and lobbyists in the world to develop legal means to hide and launder their money,” says the Atlantic Council.

According to a report by the Atlantic Council think tank, Russian President Vladimir Putin and his close associates control a lot of dirty money. Getty Images Photo: BBC World

“A serious oligarch has layers of anonymous shell companies in a number of offshore jurisdictions, and his money is moving at lightning speed among them.”

In 2016, the International Consortium of Investigative Journalists published the Panama Papers, which showed that one company created 2,071 shell companies for wealthy Russians.

What actions are being taken to find the oligarch’s money?

After the invasion of Ukraine, several countries announced a series of measures to track Russian money.

The United States is creating a new task force, “KleptoCapture”, to crack down on the finances of Russia’s oligarchs.

It will be responsible for the Ministry of Justice and its objective is to confiscate assets obtained through illegal conduct.

The UK government has taken steps to increase the use of unexplained wealth orders (UWOs), which force people to Show where did they get the money? To buy assets in the UK.

Cyprus is such a popular destination for Russian money that it is known as “Moscow in the Mediterranean”. AFP/Getty Images Photo: BBC World

Account Freezing Orders (AFOs) allow courts to freeze funds from a bank or building society if they suspect that the funds are linked to criminal activity.

The London government passed the Economic Crimes Act, with a register of beneficiaries of assets owned by foreign entities.

UK too Abolished the “golden visa system””, which granted the right of residence to wealthy foreigners if they invested large amounts of money in the country.

Malta, a favorite haven for Russian money, also scrapped a “golden passport” scheme that allowed oligarchs to buy citizenship.

Cyprus and Bulgaria abolished their golden passport schemes in 2020.

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