Russia Vows to Crack Down on Offshore Zones

LOUGH ERNE, June 18 (RIA Novosti) – Russia will develop a national plan to deal with offshore tax havens, President Vladimir Putin said Tuesday.

“We are in the process of adopting legislation to disclose the end beneficiary,” he told a news conference after a G8 summit in Northern Ireland, adding that he would sign the bill into law as soon as it is passed by parliament.

“De-offshorization” is not only a problem for Russia, but for the global economy as well, he said, adding that excessive “offshorization” of the Russian economy was bad insofar as it scares off potential investors who do not understand “who they have to deal with.”

Putin said last week that Russia would use its G8 rotating presidency in 2014 to push for international regulation of offshore tax havens, following up on a campaign against offshore havens begun by British Prime Minister David Cameron, the current head of the G8.

In May, Putin signed a law banning state officials from holding foreign bank accounts.

Russian businesses prefer to park their funds abroad because of political and economic risks at home, and even some state entities use foreign-registered companies and bank accounts abroad. Russia’s outgoing Central Bank chief, Sergei Ignatyev, said in February that illegal money transfers from the country had reached $49 billion the previous year, or 2.5 percent of gross domestic product.


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