

by John Helmer, Moscow
@bears_with
It is now a fortnight since President Vladimir Putin (lead image, left) announced a tax on Russians exporting their cash and capital to tax avoidance havens abroad; and since Prime Minister Mikhail Mishustin followed to explain that Cyprus is the target. “We have started implementing the instructions on taxing dividends from foreign accounts with Cyprus”, Mishustin said at a Kremlin meeting with Putin on April 1. “The Cypriot government has been notified of the changes in the agreement on avoiding dual taxation.”
“For Putin to make his remark in a national address,” comments a Moscow finance source, “and then for Mishustin to confirm that Cyprus was intended in the President’s speech shows this is now a high priority move. It reveals how upset the Kremlin – especially Andrei Belousov [first deputy prime minister] — has been with the role Cyprus plays in the outflow of Russian capital. I do not see any government allowing capital flight now during a deep and lasting recession.”
“This sounds a death knell for Cyprus accountants and law firms,” says a Limassol investor. “This is their biggest business. From now on only the most hardened criminals or escapees from Russia will be here.”
There has been a flurry of press leaks from Cyprus Government officials claiming that the Russian move is not targeting Cyprus. But no official at the Foreign and Finance Ministries in Moscow, nor at the Russian Embassy in Nicosia, has said this on the record. According to Mishustin and Finance Minister Anton Siluanov, the new rules are still being decided, and will be announced on April 24.
By the way, the kibosh was an iron bar used two hundred years ago by cobblers in the north of England to flatten leather as they were making clogs. When the word reached the streets of London, it meant flatten in more ways than that one. The government of President Nicos Anastasiades (lead image, right) and Nicos Christodoulides, his foreign minister and aspiring successor, having chosen last year to cut their ties to Russia in exchange for American promises to protect the island from the Turks, is the clog in this story.
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