Sanctioned Russian elite rush to repatriate billions amid Kremlin fears

The richest Russians, hit by sanctions from the West due to the war in Ukraine, are increasingly repatriating their wealth. Amidst fears of confiscation by the Kremlin, they are navigating a complex landscape of asset management and transfer - Bloomberg reports.

For the Russian elite, the imposition of sanctions has turned managing and relocating family wealth into a paramount concern. As the conflict in Ukraine enters its third year, these wealthy individuals have accepted their unwelcome status in the West. Nations such as Cyprus and Switzerland, previously favored refuges, have imposed restrictions on offering management services for family trusts involving Russian citizens - Bloomberg reminds.

While some wealthy Russians continue seeking avenues to safeguard their funds in the West, others are considering relocating them to friendlier nations like the United Arab Emirates or even back to Russia, mainly if their assets are primarily based there. Many billionaires facing sanctions have opted to repatriate their assets, yet the agency reports a pervasive fear of appropriation by the Kremlin in support of the war effort.

According to the Bloomberg Billionaires Index, 26 Russian magnates collectively possess around 350 billion dollars. With an average age of 63, the manner and location of their wealth transfer could significantly influence the economy and the business landscape. Individuals like the fertilizer magnate Andrey Guriev and oil tycoon Vagit Alekperov are believed to keep a substantial portion of their fortune in liquid assets stored at secret sites. Daria Nevskaya, a Dubai-based attorney specializing in managing the assets of affluent Russians, notes the lack of a uniform trend.

"Each situation is distinctive, hinging on the individuals' future living plans and the locations of their primary assets," Nevskaya explained to Bloomberg.

Vladimir Yevtushenkov, who faced imprisonment by the Kremlin in 2022 as a tactic to coerce the "voluntary" handover of oil assets to the state-controlled Rosneft, shifted his wealth to his son to safeguard his holdings from "nationalization."

The Kremlin has persistently urged the wealthy to reinvest in Russia, enticing them with more advantageous conditions for wealth transfer, among other benefits. In Russia, the agency reports that the absence of an inheritance tax and specific legislation on inheritance funds simplify wealth succession.

Last November, Ursula von der Leyen, President of the European Commission, announced plans for an international agreement to confiscate frozen Russian assets. The proceeds would aid in compensating Ukraine.

"Russia must also be held financially accountable for the devastation it has caused. Ukraine's damages are estimated at 680 billion dollars. Russia and its oligarchs are obliged to repay Ukraine for these damages and contribute to the nation's reconstruction," stated the EC leader.

The EU has immobilized 340 billion dollars in reserves of the Russian Central Bank and seized 21 billion dollars from Russian oligarchs.