The Russian government and the nation’s financial watchdog are reportedly working on a bill to prevent capital flight. The plan implies banning suspicious transactions to foreign bank accounts.
The Russian authorities want to battle a popular scheme for withdrawing money – when a company based in Russia transfers cash to a non-resident firm after a court ruling. It works like this: the foreign firm initiates a legal dispute demanding a payment of debt, and the defendant, a Russia-based firm, agrees. Then a bank receives a document based on the court decision, a writ of execution, and is obliged to wire money to the receiving side.
Also on rt.com Russia to scrap tax agreement with Netherlands as proposed approach fails to combat capital outflowsNow the Central Bank of Russia and the Ministry of Justice are working on a bill that requires that such compensations be transferred only to a Russian bank account, business outlet RBC reported. It means that if foreign companies or citizens want to receive their money under the writ of execution, they will have to open a bank account in Russia.
The new law could minimize illicit transactions, including money-laundering and tax evasion, RBC said citing a ministry official. The report adds that the central bank is working on “comprehensive changes to the legislation” to counter questionable transactions through executive orders, but did not comment on the particular ban on transactions to foreign accounts.
However, some analysts told RBC that the proposed measure could hit law-abiding businesses as it could create hurdles for dealing with foreign partners, who could be scared off by the new rules and opt to halt cooperation.
Also on rt.com Putin calls for 15% tax on offshore funds as part of plan to stabilize Russian economyFor more stories on economy & finance visit RT's business section