Russia mulls investment anonymity for Crimea

RUSSIA / FSU POLITICS - In Brief 07 Feb 2021 by Alex Teddy
Moscow is thinking about allowing those who put money into Crimea to keep their identities secret. The government is eager to generate more business on the disputed peninsula. In 2014 Russia took (or, as they would say, "liberated") Crimea from Ukraine. The US and EU imposed sanctions on businesses investing in Crimea. Any Russian companies operating in Crimea are frozen out of the Western financial system. Therefore most Russian businesses have stayed out of Crimea. The cost of operating there far outweighs the benefits. A bill is going before the Russian Parliament to permit investors from other Russian regions to be excused from corporate transparency in relation to Crimea. This would make it impossible to identify, and therefore, sanction them.Crimea is experiencing chronic under-investment. It cannot trade with Ukraine, which was its main market beforehand. The peninsula badly needs an infrastructure upgrade. The government has cut taxes there and allowed people to acquire land without public tender. None of this has boosted the economy much. Moscow is fed up with subsidizing the peninsula, especially at a time of financial retrenchment. Russia has set up its own equivalent to SWIFT. It has its own Mir bank cards to replace Visa and the like.The Crimea investment anonymity scheme could have unintended consequences. Opacity would make embezzlement and graft much easier.

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