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Illegal Money Transfer From Russia Reaches $49 Bln. Last Year

2/20/2013 8:12 AM ET

Illegal money transfers from Russia reached an alarming $49 billion in 2012 which constitutes 2.5 percent of the country's GDP, and almost half of the sum was sent out by a single group of "well-organized" people, Russia's central bank chief Sergei Ignatyev said on Wednesday.

"This could be payment for the delivery of drugs… payments for grey imports … bribes and kickbacks for officials or managers making purchases at large private companies with ineffective internal controls. Or this may involve tax evasion schemes," he said in an interview with Russia's 'Vedomosti' business newspaper.

Ignatyev said $14 billion of that $49 billion was transferred to foreign accounts abroad in trade operations, while $35 billion involved capital operations referred to as "dubious" in the balance of payments and included in the capital outflow count. Russia's net capital outflow reached $56.8 billion last year that indicates up to 60 percent of money which left Russia was sent out illegally.

He estimated damage to the country's budget system from these operations at about 30 percent of the volume of dubious operations or about 450 billion rubles a year. "If we add internal cash-converting operations that are organized by the same people, then I believe the overall damage to the budget system will exceed 600 billion rubles a year," he said.

According to the newspaper, Russian budget loses 600 billion rubles ($20 billion) annually from such illegal money transfers which is equivalent to the entire sum spent last year on education (604 billion rubles) or health care (614 billion rubles).

Ignatyev called for legislation to allow banks unilaterally cancel relations with clients making dubious transactions, to streamline the business registration procedure and to introduce liability for nominal directors.

Meanwhile, the head of the Russian Parliament's ethics committee, Vladimir Pekhtin, gave up his seat in the House following accusations that he owned undeclared properties in the United States.

Opposition leader and anti-corruption activist Alexei Navalny posted documents online earlier this month pointing out that Pekhtin, a veteran lawmaker from the ruling United Russia party, owned undeclared luxury properties in Miami, Florida, worth over $2 million. But Pekhtin says the properties belong to his son.

"I have taken the not particularly easy decision to give up my seat," Pekhtin told the State Duma on Wednesday, adding "I do not want the shadow of ungrounded accusations to fall on our party."

The move follows Pekhtin's resignation last week as head of the Duma's ethics commission, which Parliament Speaker and party colleague Sergei Naryshkin hailed as "honest and responsible" move, the RIA Novosti news agency reported.

by RTT Staff Writer

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