London sanction threats will be tested on Abramovitch. "National Information Service", 21 May 2018
Experts informed the "NIS" about the risks caused by the report of the British Parliament on the Russian corruption.
Report under the showy title "The Gold of Moscow: Russian corruption in the United Kingdom" has been made public by the International Committee of the British Parliament today. It says that despite unprecedented cooling down in relationship between the two countries the Russian state and companies affiliated with it continue to use British financial platforms in their interests, in particular, to place state debt securities through banks that are under sanctions, such as the FTB.
MP's urged to increase personal sanctions against the Russian state servants and businesspeople close to the authority, and also to make unable placing the Russian debt in the western markets. It has just become known that one of the most renowned Russian businesspeople, owner of the football club "Chelsea" Roman Abramovitch has not been able to extend his investor visa which cost him two million pounds, since April. That is why he failed to visit the English Cup final where his club beat "Manchester United".
Appearance of information about Abramovitch's difficulties with his visa at the moment when the anticorruption report of the British Parliament was made public is likely to be nothing but a coincidence. Nevertheless, it shows the change in the attitude of London to the representatives of the Russian elite, for Roman Abramovitch is not only one of the most renowned Russians in the UK, but one of the most popular as well, because having bought "Chelsea" in 2003, he brought the club out of a lingering crisis and made them the champions of England, moreover, the winners of the UEFA Champions League and the League of Europe. According to mass media, Abramovitch has invested about three billion pounds in Great Britain.
In the end of March, after poisoning of the former intelligence officer Sergey Skripal and his daughter, chief of the British Home Office Amber Rudd promised to check up 700 Russians who had received investment visas in 2008-2015. There was no information that the owner of "Chelsea" was one of them. Nevertheless, it's obvious that Abramovitch wouldn't have missed the victory of his team in the English Cup final without reason.
"The West is searching for "Putin's purses", i.e. people who have earned their money on direct orders from the state budget, such as Rotenberg and Timchenko whose fortunes were made on the state orders around "Gazprom", "Rosneft" and other giant companies. I.e. authorities are interested not in any wealthy people from Russia. They are unlikely to be interested in Khodorkovsky. They are interested in those people, interference in whose money would be painful for Putin and his entourage, because these entrepreneurs are nominal owners of the capitals of the Russian top officials", - explained Sergey Zhavoronkov, senior scientific employee of the Economic Policy Institute named after Gaidar.
In winter British authorities promised to freeze assets of those foreigners who would fail to prove that their money had been acquired legally. Although there are almost no concrete names in the Parliamentary report - it mentions only the former first deputy chairman of the Russian Government Igor Shuvalov who allegedly owns London apartments costing more than £11m, and co-owner of the energy holding En+ Oleg Deripaska who placed shares of his company worth more than €1 b in the London Exchange despite the crises in relations between Russia and Great Britain -the situation with Abramovitch indicates that the British Isles are turning into the territory of real risk out of the safe haven for the Russian new rich. And so, the question where they are going to transfer their capital, occurs.
Anton Imennov, Managing Partner of the Moscow Office of Attorneys at Law Pen & Paper, anticipates that after Great Britain Europe will close its financial markets to Russian oligarchs.
"Not only Britain is being closed, but also British overseas territories. Therefore, such popular among the Russian oligarchs island off shores as the Caiman Isles, Bermudas and British Virgin Isles can also be excluded. The report indicates that it is necessary to cooperate with the EU more closely. That's why European countries with convenient tax regulations (Luxembourg, Malta, Cypress, the Netherlands, Liechtenstein and others) are also likely not to be included in the list of potential candidates. Middle East and Asia must be the safest and most comfortable destinations for the oligarchs. In terms of the level of the law and order and bank system the choice could be Hong-Kong, Singapore and the UAE. Some oligarchs may partly move their assets to Russia", - supposed Anton Imennov.
Why, indeed, did President Putin promise the most favorable conditions and safety guarantees to those Russians who would make a decision to return their capital to Russia? Meanwhile, the "Deutsche Bank" calculated that around £100 b were secretly transferred from Russia to the UK from 2006 to 2015. However, Zhavoronkov doubts whether business is ready to trust the President's words and return this money.
"It is quite clear that this money won't be repatriated to Russia, for whatever problems might occur in Britain, they won't seize everything at once, while in Russia you may lose all within an hour, as the Magomedov brothers (co-owners of the "Summa" group charged with establishing an organized criminal community and theft of ₽2.5 b - NIS). A command will be given and they will come after you. Files with information about you were collected beforehand. Have a look at the capital outflow for the last year - $31 b, already $21 b for the first four months of this year, i.e. two thirds of the last year limit. So, there are no fools, nobody is going to repatriate to Russia", - he noticed.
In the economist's opinion, there are two main options left to the Russian business. One of them is to stay in Great Britain despite all risks.
"Appealing to the British judicial system which is independent from the authorities, and proof that their money has no criminal background, will be the main strategy for the Russian big business. Let's take senator Kerimov who was accused of money laundering and tax evasion in France. Nevertheless, he was allowed to go to Russia for several days on humanitarian grounds. He could have stayed here - nobody would have extradited him back, but he preferred to return and prove his innocence. And there are examples of such acquittals. In the beginning of the 2000s the Swiss court of law acquitted Pavel Borodin, Prokhorov was found not guilty in France, the already mentioned Abramovitch won a case against Berezovsky in Britain. So, it will be the main policy of the defense", - considers the NIS's interlocutor.
The second option is transfer of assets to the USA. Although it looks like out of the frying pan into the fire, the fellow-member of the Gaidar Institute assures that it only seems so.
"I can see only one destination - the United States of America, though there is a pretty high income tax despite Trump's reduction. But the USA is a safe country in terms of absence of murder attempts against people from Russia. Long arms of the "offices of deep boring" are powerless in the USA, apart from Great Britain. A lot of children of the representatives of the Russian political elite live their. The concept of the political risk exists in the US. The US Treasury Department may put you in the list of people close to Putin, but the Deripaska and Vekselberg cases show that you will be given some time to close your positions, for sanctions come into force not tomorrow, but in June. Then imposition of sanctions was prolonged till autumn not to make those Americans who had commercial contracts with them suffer. Everything is learnt through comparison. One may have doubts about objectivity of the American judicial system, but it depends on what it is compared with. Compared with Russia or the Basmanny law court?"
In his turn the former head of the Central Bank Sergey Dubinin points out that, generally speaking, the report of the British MP's is declarative by nature. It has only one concrete suggestion concerning the ban to buy Russian state bonds.
"It is suggested that British financial institutions should be banned from buying Russian state securities. That is the only concrete thing there. All the rest is a political declaration about the necessity to toughen sanctions", - he emphasized.
The document points out that in March, only several days after deportation of the Russian diplomats because of the Skripals case, Russian Eurobonds worth $4 b were successfully placed in London with the help of the FTB which figured in the list of sanctions. "Gazprom" had placed its securities worth €750 m even earlier. Although this event caused the utmost indignation of the MP's, the former head of the Russian CB considers the perspective of sanctions against the Russian state debt to be pretty foggy yet. Even if they are imposed, the effect of them will be insignificant.
"American Financial Department opposed the ban on purchasing Russian state securities for the US citizens and juridical persons. I can't predict whether British authorities will run before a steam engine in this case. Even if such a ban is introduced, it won't hurt Russia, because revenues from the oil and gas export exceed expectations. So, it's about the budget surplus for the current year and even in perspective. That is why placing federal loan bonds abroad is not likely to be topical in the near future", - explained the financier.
Development of the situation with Abramovitch will show how serious the British intentions are. If the owner of "Chelsea" is denied prolongation of his visa, it means that, indeed, the time has come to find a new refuge for the Russian capital. Besides, this delay may happen to appear as a psychological issue mainly orientated towards the interior consumption, but not the Russian authorities and business. Well, you see, the British authorities are on alert and are ready to check the most privileged immigrants time and again.