Freezing assets, expelling offshore companies: the fight against Russian money in Europe is entering a new stage

The fight against Russian money in Europe threatens to squeeze Russians out of all the usual jurisdictions to keep money. This weekend alone, Britain promised to seize the property of more than 100 foreigners, mostly Russians, until its origins are clarified. And the authorities of Cyprus, like Latvia before it, launched a massive campaign against offshore accounts, the owners of which will actually be forced to withdraw their money from the island.

• Back in January 2018, a spokesman for the National Crime Agency (NCA) assured The Bell that the agency was going to use Unexplained Wealth Orders (UWOs) — arrest warrants for foreign property of unknown origin — “in one or two cases involving foreign officials.”
• The Skripal case has changed the scale of the operation - now the NCA is going to issue 120-140 warrants, most of which will affect Russians or people associated with Russia, found out The Times . UWO allows the authorities to seize any foreign property in the UK until the owner clarifies its origin. Which documents the owner must submit, the court decides each time on an individual basis. We wrote in detail about how UWOs work here .
• At the same time, all Russians who received British tier 1 investor visas in recent years, like Roman Abramovich, whose visa has not been extended, have come under scrutiny. In total, according to the old, more liberal rules, 700 Russians received such visas in 2008-2015.
• Since the end of last week, Cyprus has become a new front in the fight against Russian money. After a US Treasury delegation visited the country in early May, local banks have already begun to tighten control over the accounts of Russian clients. And on June 1, banks received an order to close the accounts of all offshore companies until detailed information about their beneficiaries is clarified. Clients of banks in Latvia faced a similar situation at the end of March - their accounts were frozen, and to lift the arrest, a package of documents was required that made the offshore status of the company meaningless. However, the exodus of Russian money from Cyprus has already been going on since 2015 - since that moment, only in the largest Bank of Cyprus, the number of clients from Russia and Ukraine has decreased by 60% to 8.34%.

What do I get from this?

A few tips on how to properly withdraw your money from affected accounts right now are given by lawyer Alexander Zakharov. But in general, the situation seems difficult - after the restrictions imposed by European countries, Russians need to think about new schemes and jurisdictions. After the entry into force of tax auto-exchange of information between almost all countries in the world, the latter is also a non-trivial task.

Peter Myronenko