At least $50 billion has been pulled from Western countries since last year, the outlet has calculated
Russian businessmen squeezed by sweeping Western sanctions have withdrawn tens of billions of dollars in assets from the EU since the start of the Ukraine conflict, Bloomberg reported on Thursday.
Wealthy Russians have started repatriating their assets from jurisdictions such as Cyprus, Jersey, and Switzerland to Russia and so-called “friendly” countries since last February, as Western states stopped being a safe haven for Russian businesses.
In August, shareholders of United Medical Group CY and MD Medical Group Investments, controlled by tycoons Igor Shilov and Mark Kurtser, approved the transfer of their companies registered in Cyprus to Russia, the outlet said.
The move will drive the value of assets withdrawn by Russian billionaires from the West to at least $50 billion, according to Bloomberg’s calculations.
The trend breaks with a long-standing practice by Russian billionaires to hold their assets in the EU. It comes as numerous Russian businesses that previously took advantage of investor-friendly legal systems in the West have seen their assets seized due to Ukraine-related sanctions.
“Right now, Russia seems less of an evil than overseas,” Natalia Kuznetsova, partner at Business Solutions and Technologies, which formerly operated in Russia under the Deloitte brand, told the outlet.
Aside from individuals, companies are also repatriating their assets to Russia. As many as 115 firms moved to domestic low-tax special economic “offshore” zones this year, taking the overall total to 254, First Deputy Economy Minister Ilya Torosov revealed at the Eastern Economic Forum in Vladivostok on Monday.
Russian President Vladimir Putin has repeatedly called on the nation’s entrepreneurs to invest at home, advising them “not to fall into the same trap” by investing in Western companies.
“I have already addressed our entrepreneurs, many of whom have faced certain pressure from certain partners. And I would like to repeat once again today: it is more reliable and better, of course, to invest capital in Russia,” the president said earlier this week at the Eastern Economic Forum.
Following the start of Moscow’s military operation in Ukraine, the US, EU, and other Western countries blocked billions’ worth of assets belonging to Russian companies, individuals, and the central bank. Moscow has repeatedly branded the asset freezes illegal, and has warned of retaliatory measures.
