THE 2 “OFFSHORE” ZONES WHICH USED TAX INCENTIVES TO ENTICE RUSSIAN COMPANIES BASED IN OTHER COUNTRIES TO MOVE TO RUSSIA

On 2 February, an article in Forbes was concerned with  zones, known as special administrative regions, or SAR, located in the far western and eastern reaches of the country.  One was on Oktyabrsky Island in the Kaliningrad area sandwiched between Lithuania and Poland, the other on Russky Island near the borders with China and North Korea.  These special regions gave oligarchs an exit ramp from foreign jurisdictions where they could be subject to sanctions.  The SAR initiative was established to help sanctioned companies get back to Russia and minimise legal risks, under a law passed in 2018.  The SAR brought some of Russia’s largest companies back and blunted US sanctions.  Since 2018, more than 70 companies have repatriated to Russian SAR from foreign jurisdictions, many of which were located in places that agreed to recognize the US sanctions.  It gives as an example, aluminium giant UC Rusal and energy and metals firm En+ Group, which are part-owned by Viktor Vekselberg and Oleg Deripaska respectively, Russian billionaires who were sanctions by the US Treasury in April 2018.

https://www.forbes.com/sites/giacomotognini/2022/02/02/putin-set-up-system-for-his-billionaire-friends-to-evade-sanctions/?sh=9de00321dd21

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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