Media: Kremlin considers establishing special bonds to allow Russian oligarchs to bring their wealth back to Russia

A special refund mechanism for returning money back to Russia may be developed for businessmen who fear new sanctions.  The plan envisages special bonds in currencies with high yield.

The idea was initiated on December 5th by a group of wealthy Russians who have assets abroad, Reuters reports. The newspaper cites anonymous sources in the state-owned companies and in the financial markets, one of whom describes the idea as absurd. The refunds would be issued in foreign currency bonds with interest rates that will be offered at a higher yield than bank rates while the bonds themselves will be more liquid than Eurobonds. The holders will be able to remain anonymous and not answer any additional questions that they would have been asked by banks when placing deposits. The newspaper does not specify the exact amount of Russian money kept offshore, but it cites a study that have estimated a total of 200 billion dollars.

It is alleged that the incentive was provided as a result of the expansion of economic sanctions, as well as the intention of Russian leadership to bring the oligarchs’ money back to the country and to carry out the de-offshorization. Reuters also refers to the history of the so-called ‘Vebovki,’ the nickname given to US domestic currency bonds issued in 1993 to pay the debt of the USSR Vnesheconombank (VEB). At the beginning of the year, they still had a debt of about 3.5 million dollars.

On June 15th, the U.S. Senate passed a bill to tighten sanctions against Russia. 98 senators voted in favor of the bill, only two were against it.

In late October, the sanctions list was extended to include 39 companies, including those located in St. Petersburg. Inclusion on the list does not guarantee the imposing of sanctions, it is only a proposal made by U.S. Department of State. The restrictions are assumed to be imposed only on "significant transactions" with the named entities.

  Russia, Russian oligarchs