Sanctioned Russian elites navigate wealth back home amid fears
The wealthiest Russians, whom the West sanctioned following the onset of the war in Ukraine, have begun gradually moving their wealth back to their home country. However, they fear that the Kremlin will seize their assets in Russia - Bloomberg reports.
Facing sanctions, managing, and transferring family wealth has become the number one challenge for the Russian elite. The war in Ukraine is now in its third year. The wealthiest Russians have already gotten used to the fact that they are no longer welcome in the West. Even Cyprus and Switzerland, countries they had preferred to flee to, introduced bans on providing management services for family trusts where the trustees or beneficiaries are Russian citizens - Bloomberg reminds.
While some wealthy are still looking for ways to keep their family funds in the West, others are trying to move them to so-called friendly countries, such as the United Arab Emirates, or return them to Russia - primarily if their assets are concentrated there. Most billionaires under sanctions have decided to move assets back home. However, oligarchs fear that the Kremlin will expropriate their assets for the war in Ukraine - the agency reports.
The 26 Russians listed in the Bloomberg Billionaires Index together own about £280 billion. Their average age is 63, which means the way and place they decide to transfer their wealth in the coming decades will impact the economy and business. Some billionaires—like the fertilizer tycoon Andrey Guriev and oil magnate Vagit Alekperov—likely hold a large part of their wealth in cash stored in undisclosed locations. According to Daria Nevskaya, a lawyer in Dubai who handles wealthy Russians, there is no overall trend.
Nevskaya stated in an interview with Bloomberg that each case is unique and depends on where people plan to live in the future and where their main assets are located.
Vladimir Yevtushenkov, who was imprisoned by the Kremlin in 2022 to force a "voluntary" transfer of oil assets to the state-owned Rosneft, transferred his wealth to his son to protect his holding from "nationalization."
The Kremlin has long encouraged the wealthy to return and invest in their homeland. It offers, among other things, more favourable conditions for the transfer of inheritance. In Russia, there is no inheritance tax or law on inheritance funds. They facilitate the transfer of wealth - the agency informs.
"Russia must pay for the damages"
In November last year, the President of the European Commission, Ursula von der Leyen, announced work on an international agreement that would allow the seizure of frozen Russian assets. The obtained funds would be used to compensate Ukraine.
- Russia must also pay financially for the devastation that it caused. The damage suffered by Ukraine is estimated at 600 billion euros (£540 billion). Russia and its oligarchs have to compensate Ukraine for the damage and cover the costs for rebuilding the country. - the EC chief stated.
The EU has frozen £270 billion of reserves of the Russian Central Bank and froze £17 billion belonging to Russian oligarchs.
