Russian President Vladimir Putin kicked off a campaign for the repatriation of capital by ending the practice of companies to transfer money in offshore accounts and ordered the most senior officials to close their foreign accounts, according to Bloomberg.
Russia should move forward on legislation that would limit corruption and holdings of money and assets of officials in offshore accounts, said Wednesday Putin in the first State of the Union speech of the current term as president, started in May this year.
The new rules will be extended to the most important leaders, including the President, Prime Minister and their families, said Putin.
Moscow leader wants to repatriate assets evaluated at $1,000 billion, in an attempt to stimulate the economy and encourage investment in new technologies to diversify beyond natural resources production, the main source of economic growth for Russia.
Estimates indicate a growth next year of 3.6% for Russia’s economy, compared with an average annual growth of 7% during the first two terms of Vladimir Putin presidency.
“How can you trust an official or politicians who make bold statements about Russia’s welfare, then try to transfer funds, money overseas? Assets abroad should be declared regardless, and officials should indicate their value and the source of income for those transactions,”
said Putin.
Russian President began the most ambitious anti-corruption campaign during his mandate, criticizing the Defense Minister Anatoly Serdyukov, for the allegations of corruption leveled to his subordinates.
A member who is now part of the Popular Front, which supports Putin party in the Duma (Russian parliament), said on Wednesday that the legislature would provide amnesty to those who are voluntarily repatriating money held in foreign accounts.
The government should also reform the judiciary and legislation to stop “running away” from the jurisdiction of the Russian authorities. Putin asked the Executive to prepare proposals to “de-offshorize” economy, including the use of Russian stock exchange for privatization of state assets.
“Our entrepreneurs are often criticized for being non-patriots. Nine of 10 significant transactions carried out by large Russian companies, including among those partially owned by the state, are not made under the auspices of Russian law,”
Putin added.
Russians spent $12 billion last year to buy property abroad, compared to $5.5 billion per year in 2007 and 2008. Net capital outflows in 2011 totaled over $80 billion, double the outflow of 2010, and could keep close to that level this year, around $75 billion, according to the Ministry of Economy in Moscow.
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