Russia’s government is mooting the creation of two new offshore financial centers (OFCs) with special legal systems, following the recent wave of international sanctions on the country.
According to reports, the proposed OFCs would be located on Oktyabrsky Island in the Kaliningrad Region and Russky Island in Primorsky Territory, close to Vladivostok. Their establishment would be with the implicit aim of supporting those business circles currently targeted by renewed US sanctions.
The Russian-language Vedomosti newspaper reported on Tuesday, the legislation is expected to be signed into law during the Moscow parliament’s current session this spring. The same paper reported that the recent sanctions had given renewed momentum to an idea that has been under discussion for some time.
The US Treasury Department added a further 38 Russian businessmen, senior officials and companies to its sanctions list on Friday last week, in a coordinated response to what the department described as the country’s recent spate of “malign activity” around the world.
The Russian government’s plan is that the OFCs attract money that has been withdrawn from Russia. The authorities would, if the plan goes ahead, work to encourage affected companies to relocate to the OFCs. The companies would be guaranteed a raft of tax privileges and the right not to disclose sensitive information.
A decision from the Moscow parliament is expected in May.