Putin and the oligarchs: That’s how they hide their luck

Putin and the oligarchs: That’s how they hide their luck

But now countries around the world are adopting new ways to do it, the BBC reports.

Large size

There are more “Russian hidden money” in the world. The Atlantic Council, an American think tank, estimates that about a trillion dollars (equivalent to 7 750 billion) of “black money” is hidden abroad with the Russians.

Putin controls

A quarter of the vast sums are said to be controlled by Russian dictator Vladimir Putin and his close allies – the so-called “oligarchs” of wealthy Russians, the Atlantic Council has said.

“The Kremlin can use and control this money for its own purposes, such as espionage, terrorism, industrial espionage, bribery, political manipulation, misinformation and many other malicious purposes,” the think tank wrote in a statement.

How it goes

Another U.S. think tank, the National Endowment for Democracy, points out that it encouraged Putin’s close associates to steal from the state budget, extort money from private companies and directly seize profitable companies.

With this, Putin and his oligarchy have amassed enormous wealth, according to Think Tank.

Steal from funds

Russian opposition leaders Boris Nemtsov and Vladimir Milov have said that between 2004 and 2007, $ 60 billion was transferred from the oil company Gazprom to Putin’s allies.

The BBC learns that data leaked in the October 2021 “Pandora Papers” by the International Federation of Investigative Journalists show that many close to the Russian dictator have become very wealthy and could help the dictator move his wealth.

Money is saved here

Historically, much of Putin’s and oligarchy’s wealth has been invested in Cyprus, which has attracted favorable taxes. For some, Cyprus is known as “Moscow via the Mediterranean”.

In 2013, a total of $ 36 billion of Russian money went to the island. The Atlantic Council said most of the money came from shell companies used to hide the real owners of the money.

It had far-reaching consequences. In 2013, the International Monetary Fund forced Cyprus to close tens of thousands of bank accounts owned by shell companies.

Washing money

The breadth of Russian money laundering has been revealed in a report since 2014. It shows that between 2011 and 2014, Russian banks embezzled $ 20.8 billion worth of money from 5,140 companies in 96 different countries.

This is how money is hidden

The most common way for oligarchy to hide their money abroad is to use shell companies.

– The Atlantic Council writes that they employ the best lawyers, accountants, bankers and publicists in the world, creating ways to hide and launder their money.

Think Tank explains that large oligarchy has several “layers” of anonymous shell companies, with their money moving simultaneously between them.

In 2016, the International Federation of Investigative Journalists published data in the “Panama Papers” showing that only one company started 2,071 shell companies for rich Russians.

This way you can make money

Following Russia’s occupation of Ukraine, surveillance of Russian currency has become increasingly important to the outside world. The BBC reports that many countries have taken a number of steps.

United States

The United States has added a new division called the Task Force Klepto Capture, which was established in March. The aim is to impose sanctions against Russian oligarchs in response to the Russian invasion of Ukraine. This unit is run by the Ministry of Justice and aims to seize illegal assets from oligarchy.

UK

The British government has taken steps to expand the Unspecified Wealth Orders (UWOs) that force people to report and prove where they got their money from when buying property in the country.

New law

Account freeze orders (AFOs) allow British courts to freeze funds in a bank on suspicion of money laundering. In addition, the government has approved a new law relating to economic crime, which includes a record of actual property rights, which makes it easier to identify foreign actors who own property in the country.

The United Kingdom, along with Cyprus, Malta and Bulgaria, has revoked its “golden passport”, granting residency to wealthy foreigners who have invested large sums in the country.

Photo: C Pogio

Text: Editors