Gref opposes internal offshore zones, proposes steps to bring capital back to Russia

(Interfax – MOSCOW, April 19, 2013) The president and CEO of leading Russian lender Sberbank (RTS: SBER), German Gref opposes the idea of creating internal offshore zones in Russia, but is proposing that special measures be developed to bring capital back to the country, possibly even an amnesty for capital that now flees to offshore jurisdictions.

“I don’t really believe in internal offshore zones. It doesn’t seem optimal to revive this practice now,” Gref said in an interview with Rossiya 24 television. In the early 2000s, when he was economic development minister, Gref said he and then Finance Minister Alexei Kudrin sought to close domestic offshore zones to which tax revenues were being lost.

Commenting on the situation in Cyprus, Gref said “this will go into economic history textbooks as an example of how it is possible to undermine confidence in one’s own economy for many, many years to come.”

“We, for example, have drawn conclusions for ourselves and are recommending to all of our companies to leave Cyprus’ jurisdiction as fast as possible. And this gives rise to a good question – where to?” Gref said. He said this is one of the challenges facing Russia, and it is very important now to accelerate the process of creating an international financial center in Moscow.

It is necessary to take steps so that capital flows back into Russia, not into offshore zones, he said. “I would now think about a special program of measures, the creation of special conditions, the transformation of legislation and, perhaps, a new amnesty for such capital,” Gref said.