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28 Mar, 2016 15:06

Moscow considering sanctions against London over tax evasion support - financial crime consultant

Moscow considering sanctions against London over tax evasion support - financial crime consultant

A financial crime consultant claims Russia is seriously considering economic sanctions against the UK over its alleged support of tax evading Russian nationals. Ken Rijock of World-Check said he got the information from a reliable financial source in Moscow.

According to Rijock, many affluent Russians are evading income tax. Russia intends to hold the UK responsible as the scheme involving British overseas territories, the British Virgin Islands (BVI) and the Cayman Islands, he writes.

The extent of sanctions, and when they will be imposed upon the UK, is not known.

“Russia is blaming the United Kingdom for failing to terminate local legislation that allows companies with bearer shares to exist in the British Virgin Islands, and to allow non-UK nationals to form such entities.”

Russian nationals are purchasing BVI companies, he said, referring to individuals who are privy to the investigation. Using the total anonymity associated with a BVI company and its bearer shares, they then open corporate accounts in the Cayman Islands. As a result that cash is transferred and held by an entity whose ownership cannot be determined.

The British Virgin Islands is known as the world's biggest provider of offshore companies. The territory’s prosperity almost entirely depends on offshore cash injections.

In his blog Rijock claims a financial services firm in Road Town, Tortola refers all “corporate” clients to offices in Grand Cayman. A bank account is further arranged through a local financial services provider.

“Hundreds of millions of dollars have been hidden from view in this manner, and Russian law enforcement, and regulatory agencies, cannot ascertain beneficial ownership, even when they have the name of the corporation,” said Rijock.

A former banking attorney, money launderer and advisor to drug traffickers, Ken Rijock now consults with law enforcement and the financial services industry. He is a global provider of highly structured risk intelligence for banks, institutional lenders, lawyers, accounting firms and other regulated financial services.

Rijock has assisted in fighting money launderers on a global scale after he had been arrested and served time in a US federal prison for racketeering and money laundering.

World-Check is a source of structured intelligence on heightened risk individuals and organizations.