The outflow of capital from Russia in the first half of this year reached the level of $52.5 billion. However, the Ministry of Finance projected that the peak of payments on foreign debts, which is expected in the last quarter of this year, could accelerate the capital outflows. By the end of 2015, according to the most experts, the outflow will reach at least $ 100 billion.
“With the current sanctions regime and the oil price in the corridor $ 50-60 per barrel, we should expect the outflow of $ 110-120 billion (more than 3% of GDP) “, predicts Anton Tabah, Director of the rating agency RusRating.
Russian web sites quoted the words of Martin Day, Deputy Head of British Mission in Ukraine: “It is necessary to understand the effect of the sanctions that have been applied. We can hear different figures, but there is evidence that the sanctions as of today could lead to capital outflows from the Russian Federation in the amount of $200 billion.”
Russian Prosecutor General Yuri Chaika said at a conference of the International Association of Prosecutors in Zurich: “Economic criminals from Russia are increasingly hiding in some European countries.” By Chaika’s opinion it’s happening because European countries are not returning criminals to other countries. However, it is widely known that the real economic criminals can easily and safely leave Russia with their money in order to stay abroad.
The Russian journalist Olga Romanov writes in newspaper Novaya Gazeta:
“A significant number of people – and we know most of them – were not just able to take refuge abroad, but also were able to take out multimillion-dollar Russian capital under the nose or with the direct assistance of law enforcement.
“Do you know how to distinguish between people who fled to the West to escape from the persecution from those who washed away with the help of law enforcement agencies? It’s very simple. Those in Russia who fought to save their business, taken away from them by corrupted state clerks and law enforcement, and managed to take abroad some insignificant savings primarily thanks to their own clever head, they invest this money and their energy in the creation of new businesses and new companies, and often succeed because they are not lazy and stupid… And those people, who left ‘by arrangement’ and brought with them huge assets, lead, as a rule, a life of rentiers, on the interest from this assets. It’s such a game where neither criminals nor law enforcement agencies are interested in seeing justice. Because in the case of public prosecution, these criminals can tell a lot about whom and how much they paid for the opportunity to escape, and also with whom they shared the profit of their criminal businesses.”
Romanova gives in her article several examples of safe emigration of Russian corruptioners. One of the examples is well known to all Russians: it’s the safe emigration of the former Moscow Mayor Yury Luzhkov and his billionaire wife Yelena Baturina.
Luzhkov and Baturina
Here are some other cases:
Vladimir Chernukhin is a former Chairman of Vnesheconombank (a bank 100% owned by the state). Chernukhin became its chairman in June 2002, right after receiving diploma of Finance Academy in 2001. He ceased to be its chairman in May 2004. Without any criminal case or other prosecution, Chernukhin went to live in England, where he soon bought for about 72 million pounds one of the most beautiful buildings in the City – Midland Bank.
The similar are stories of other Russian bankers:
Sergei Pugachev, famous as religious “orthodox banker”, emigrated first to England and then to France after the bankruptcy of his Mezhprombank. He impressed the representatives of English press with his statement that living on 10,000 English Pounds per week is poverty.
Photo of Pugachev on the cover of Russian Forbes Magazine, presenting him as a “fugitive friend of Putin”
Andrei Borodin, former head of Bank of Moscow, from which more than $5 billion disappeared, now is one of the largest owners of real estate in London.
Andrei Borodin and his home in Berkshire
Anatoly Motylev (the bank Russian credit, as well as pension funds) flew away recently.
Master-Bank had lost its license not because the bank was unstable, but because it was engaged in money laundering, and bankers, father and son Bukochnik, quietly left with the money.
The top government managers leave Russia exactly the same way as the bankers.
Dmitry Bezdelov, the former head of Rosgranitsa, hit the road to Italy, after huge scandal involving the theft of money. He wasn’t fired. He left by his own desire.
Brothers Bilalov left Russia preferring to solve their problems via telephone after scandal about corruption connected with the unfinished construction for Sochi Olympics.
Typically, all these people are leaving openly, bypassing the border controls, which are run by the FSB. They feel fully protected, since the information about the people who earned millions sharing the loot with them is much more valuable than achieving justice.
The Russian economy is falling apart and no sane businessman would invest money in it. So there is no reason to keep big money in Russia. On the other hand western sanctions are including more and more Russian functionaries and top businessmen, and one who would get under sanctions can lose money hidden outside of Russia. So how should those functionaries act, who have not yet been hit by sanctions and still can save their investments?
Mikhail Hazin, one of the top Russian economists and journalists, gives the answer to this question on the site Maxmark.com:
“How a normal official, who during his ‘hard and thankless work for the good of the fatherland’ earned a measly couple of hundred million dollars, should behave in such a situation?… Quickly take all money out of Russia… buy a villa at a warm sea and wait…
“And how Russian officials who stay in Russia should deal with those who fled abroad is a big question. It’s done not by some abstract pests, but by their own friends, relatives, neighbors in their offices, at work, by the parents of classmates of their children … Of course, it is possible to expose them, but every step in this direction is a violation of the elite consensus, of the rule that the top representatives of the elite can not be touched by law.
“In a sense, it’s a dead end. There is no way out of it… Because under the normal circumstances, with such an elite, and with such an attitude of the elite to business, the economy will keep falling. And the faster it will fall, the quicker the elite will be withdrawing the capital and escaping to the West. The faster is the outflow, the faster is the fall. And only thing we can do is to observe the process.”
