Posts Tagged ‘oligarchs’
Why London turns a blind eye to Russia’s adventurism
Threats to Russia over its actions in Ukraine are undermined by the warm welcome its billionaires continue to receive in the west.
The kleptocracies that have replaced the old Soviet empire are vulnerable, I wrote on these pages as the Ukraine crisis began. The freezing of their assets was a non-violent response to the threat to the integrity of a sovereign state that had not committed genocide or developed weapons of mass destruction; that had not threatened to invade a neighbour or provided any other casus belli beyond having a revolution against a fantastically corrupt government.
We might have threatened Putin’s elite support and made his backers realise that they had to choose between supporting Russian adventurism or holding on to their loot. I believed we had a fair idea of what their choice would have been.
Russia is exposed. Putin’s central bank estimated that two-thirds of the $56bn moved out of Russia in 2012 might have been the proceeds of crimes, bribes to state officials and tax fraud. English bankers and lawyers, British and Dutch tax havens in the Caribbean, and estate agents in Mayfair, the Cote d’Azur and Manhattan launder the loot.
Never mind asset freezes and visa bans; a vigorous investigation into immoral earnings by the European and north American authorities would have spread panic among the crime bosses. David Cameron sniffed weakness. He warned Moscow at the beginning of March that Russia would pay “significant costs” if it did not back down.
The crisis escalates today as Crimea votes on an anschluss with Russia under the eyes of Putin’s troops. The failure to date to impose sanctions on or make believable threats against Russian assets tells us much about Britain and the wider west, none of it flattering.
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Russian tycoons concerned as Magnitsky fallout spreads
Reuters
* Death of anti-corruption lawyer creates intl tensions
* Executives concerned about impact of standoff with U.S.
* Investigations have taken place in 3 European countries
* Swiss and others have been conduits for Russian funds
* Magnitsky case seen adding to negative view of Russia
By Dmitry Zhdannikov and Darya Korsunskaya
DAVOS, Switzerland, Jan 25 (Reuters) – It began with the death of an anti-corruption lawyer in a Moscow jail and grew into a row between Russia and the United States. Now Russia’s business elite are worried their interests could be harmed by fallout from the Magnitsky affair.
With international concern spreading after the 2009 death of Sergei Magnitsky, some Russian tycoons are worried their legitimate cross-border money transfers involving anything from industrial investments to luxury properties will get hit by red tape.
And they complain that the Kremlin’s hard-line stance on Magnitsky is not doing them any favours.
“The Russian business (community) is absolutely united. The situation is more than bad and things may well spread to the EU and UK and God knows who could be sucked in,” said a Russian billionaire, speaking at the World Economic Forum in Davos.
The billionaire asked not to be named as he said the Russian business establishment was still afraid of bringing up the matter with Russian President Vladimir Putin.
Russian business has tried to stay out of politics since the country’s then richest man Mikhail Khodorkovsky was jailed for tax evasion in the last decade, a move Putin’s critics say was revenge for Khodorkovsky’s political ambitions.
Magnitsky died in a Moscow prison while in pre-trial custody on tax evasion changes.
Authorities said the 37-year-old died of a heart attack, but his former employer, investment fund Hermitage Capital, says he was killed because he was investigating a $230 million theft by mid-ranking interior and tax officials.
The Russian business elite was at first broadly indifferent to the case, but that changed last year when the United States introduced its “Magnitsky Act”, imposing sanctions on dozens of Russians, whom Hermitage and its owner Bill Browder accused of being involved in money laundering and the lawyer’s death.
Russia responded by banning the adoption of Russian children by Americans. And subsequently the fallout from the affair has increased.
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Europe’s Mounting Reluctance to Bail Out Cyprus
There is growing resistance in Europe to the planned aid program for Cyprus, because it would also benefit illegal Russian money parked in bank accounts in Cyprus. The government in Nicosia is willing to make concessions, but Brussels is demanding more reforms.
It was a long way to go to deliver a short message. German Chancellor Angela Merkel flew almost four hours last Friday to Cyprus, where she spent a few minutes campaigning for the conservative presidential candidate in the February 17 election, Nikos Anastasiades. Speaking in the city of Limassol, Merkel praised Anastasiades, saying that she had known him for a long time and valued his openness to change, and that the country urgently needed “structural reforms.”
After smiling for the cameras, Merkel returned to wintry Berlin.
Her destination in the eastern Mediterranean has a smaller population than the little German state of Saarland, but that hasn’t stopped it becoming one of the biggest trouble spots in global politics at the moment. The question of whether the government in Nicosia should be allowed to bolster its ailing banks with more than €17 billion ($22.7 billion) from Europe’s bailout funds is dividing the euro zone, causing uncertainty in international markets and adding to the woes of the coalition government of Chancellor Angela Merkel, made up of her center-right Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the business-friendly Free Democratic Party (FDP). Now that the center-left Social Democratic Party (SPD) and the Green Party have announced their opposition to the plan, Merkel’s coalition could for the first time fail to muster a parliamentary majority on an important decision relating to the euro crisis.
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It matters where Russian money comes from; Oligarchs find it easy to settle in Britain. But more questions should be asked about them
A huge stream of money has flowed into Britain from the old Soviet Union since the end of Communism. The British public seems used to the fact that, from time to time, another flamboyant or publicity-shy oligarch whom nobody had previously heard of pops up on the radar as if descending from another planet.
All he has to do is buy a stake in a high-profile business or make a record-breaking bid on a house or country estate and a Russian billionaire or millionaire can easily break into elite British society.
Very little is required to establish oneself as a plutocrat in this country. Local banks apply meagre “know your client” procedures to vet applicants: a passport copy and a utility bill are all that is needed to open an account at any London-based private bank. Then, as if by magic, funds pour into the UK as clean capital, free from any taxation or further scrutiny. Getting the right to stay permanently in the UK with an investor visa is just as easy; all that is needed is a minimum of £2 million in personal assets.
Most rich Russians living in the UK have made their wealth honestly, but there is money sloshing around Britain tainted by corruption. Yet few new arrivals can expect to be challenged on where the money came from, or what they had to do back in Russia to acquire it.
Many in the British Establishment aren’t bothered by this laxness. After all, few Russian billionaires have so far parlayed their fortune into politics — particularly after the fuss caused when George Osborne and Peter Mandelson enjoyed the hospitality of Oleg Deripaska on his yacht off Corfu.
But you should be bothered. Evidence in the court case brought by Boris Berezovsky against Roman Abramovich gave us an insight into how those who amass (and lose) fortunes in Russia, however upright or law-abiding, have to do so against a backdrop of corruption and political interference. This case introduced British lawyers to krysha (the Russian for roof) — the protection money many businessmen pay to do business.
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“Londongrad” on edge after attack on Russian banker
A failed hit on a former Russian banker in London has sent a chill through Russian immigrant circles and shone an unwelcome spotlight on a hidden criminal underworld encroaching on the British capital.
The shooting also raised concerns Britain might be turning into a playground for Russian mobsters as gangland violence appears to spill over Russian borders into European capitals.
London is the chosen home for many Russians seeking a haven from the cut-throat world of their homeland where, 20 years after the Soviet collapse, they have little faith in the rule of law.
Now, some exiles say, few are safe in a city known affectionately as “Londongrad” to many of its Russian inhabitants.
“Everybody is trying to figure out who their enemies might be,” said Yevgeny Chichvarkin, a business tycoon who fled to London in 2008 after falling out with the government.
“You know, if they want to kill me, they’ll kill me,” added Chichvarkin, whose mother died in mysterious circumstances in Moscow in 2010.
To some, it was like a classic tale of gangland thuggery, with echoes of the plot from some mafia thriller.
German Gorbuntsov, 45, was shot five times with a pistol by a lone gunman as he entered a block of serviced apartments in east London on March 20, the Canary Wharf financial district’s cluster of skyscrapers towering high above the quiet back street.
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