Russia extends timeline for capital amnesty

Russia extends timeline for capital amnesty

Russia's State Duma has passed in third and final reading a package of bills extending the timeline for capital amnesty in Russia until February 28 of 2019.

The bills are related to an initiative of Russian President Vladimir Putin suggesting this policy should be continued in 2018.

According to the documents, during the second phase of the amnesty, set from January 1, 2018, till February 28, 2019, the applicants would be able to declare their bank accounts and deposits with foreign banks by January 1, 2018. 

They would also be able to declare their accounts and deposits opened before that date, but closed before filing the application. The latter may be filed with any tax office or the Central Department of the Federal Tax Service, RAPSI reported.

The authors of the bill propose to extend the timeline for the liquidation of foreign companies until March 1, 2019.

The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking with Vestnik Kavkaza, noted that Russia's new capital amnesty differs slightly from the first amnesty of 2015-2016.

"They were conducted under different economic circumstances. The extension of the amnesty for a new term is primarily due to the fact that the US is stepping up their sanctions on Russian entrepreneurs. In particular, the United Kingdom and the United States recently adopted important laws that relate to the fact that any person, which either places his funds in the state securities, or acquires movable property, or opens deposit accounts, must clearly explain the source of origin of the funds," the expert said.

Based on the new realities, he explained, we can assume that the number of funds that will be legalized will increase. On the other hand, the economist pointed out that it is possible that Russian businessmen will start transferring funds from the UK and the US to countries more loyal to this kind of operations.

The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, expressed hope for the great productivity of the new amnesty. "This is mainly due to the fact that the attitude of Western banks and regulatory bodies towards clients from Russia is deteriorating," he said.

At the same time, the expert does not predict that this measure will lead to a significant result. "First, this is due to the fact that there is less "free money", and second, the level of risks is high," the economist noted.

Explaining the reasons for the limitation of money, the head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA connected this with the fact that it takes more than a year to return significant revenues to the raw material sector of the Russian economy. "Before that, there was a crisis period, and Russian banks and companies did not have a lot of profit. The imports has started growing actively only in 2017. This is a sign that money has appeared," Konstantin Korishchenko said.

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