Report says Europe tax reliefs can be key to pressure Russia off Ukraine

The appeal of tax havens had greatly drawn the biggest companies in the oil, gas, mining and retail sector in Mother Russia to move billions of corporate assets to, for example, Netherlands to evade tax. Netherlands, Luxembourg, Cyprus, Switzerland and Ireland are some of the several European companies had been depended on by Russian businesses to put their money in. On the other hand, the tax havens might cause Russia their ultimate downfall and could lead them to, at least, back off from Ukraine, Bloomberg said.

According to the news agency, the dependency of majority of the ultra-rich in Russia in tax havens exposes them to the possibility that their well-kept assets could be subject to sanctions. On the other hand, in order to make this happen, it would require a group accord from the countries who had consistently relied on Russian capital flight economically.

Former US Senate investigator and expert on money laundering and offshore havens Jack Blum said, "If it can be shown that the owners, through these Dutch structures, are people who are sanctioned, there's no question that those assets can be frozen. The question is, ‘How far is anyone willing to go? Are the Swiss and the Dutch and Luxembourg prepared to do that?' Everybody's known this has been going on for years."

Former deputy US national security adviser and author of "Treasury's War: The Unleashing of a New Era of Financial Warfare" Juan Zarate added, "It's critical to get on board the banking centers or places where Russians have found avenues or vehicles to invest or nest property."

Bloomberg said that although the Netherlands, Cyprus, Luxembourg and Ireland belong to the European Union and should comply with the organization's penalties against Russia for their moves on Ukraine, the countries still have discretion on whether to pursue more tougher measures that are similar to what the US has done. Switzerland has no allegiance to the EU as it is not a member.

Tags

tax havens, Netherlands, Luxembourg, Cyprus, Switzerland, Ireland, European Union

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