$41 billion transferred out of Russia in one year
Russian businesses’ and the wealthiest citizens’ funds continue to flow into offshore zones through the sale of company shares and the issuance of loans, Russia’s Central Bank reported.
In the last year, $42 billion (2.5 trillion rubles) flowed out of Russia into offshore accounts. This was 15% more than the federal budget spent to support the national economy, and twice as much as the amount allocated to education and healthcare combined. Cyprus remains the “magnet” attracting Russian money, according to the Central Bank’s statistics of direct investments from Russia abroad.
Over one year, Russian legal and physical entities have invested $35.9 billion in Cypriot companies. The total amount of Russian investment in the island has reached a new historical record - $177.4 billion. At the current exchange rate, this is 11 trillion rubles – 5 times Russia’s defense budget and 18 times that of all the higher education systems.
Compared to the previous year ($37.1 billion), the outflow of capital to Cyprus remains virtually unchanged. The two year total exceeds $70 billion.
The British Virgin Islands have remained the second most popular offshore zone. $3.7 billion left Russia for the islands in the last year, with the total Russian investment there reaching $41.6 billion.
The outflow of capital to Switzerland has increased by 25% - $1.8 billion was invested there in 2016, with the figure for 2017 at $2.1 billion.
Russians withdrew roughly $1 billion to the Bermuda Islands, increasing their investment to $2.97 billion.
$440 million flowed into Jersey Island, $610 million into the Isle of Man, roughly $200 million into Singapore, and another $700 million was invested in companies registered in Latvia.
The Central Bank only noted a significant reduction in Russians’ investments in the Netherlands, from which $5.4 billion was withdrawn. However, the funds were only transferred within the EU, according to the regulator’s statistics: 1.5 times as much, i.e. $9 billion, was simultaneously received as direct investments in Austria.
According to the US’s National Bureau of Economic Research (NBER), throughout the world, 8% of households’ financial wealth is concentrated in offshore accounts. This equates to 10% of the global GDP, or $5.6 trillion.
By the NBER’s assessment, the wealthiest Russians hold an amount equivalent to 60% of Russia’s GDP in offshore accounts. This is almost 60 trillion rubles or roughly $1 trillion at the current exchange rate.