Russia loses 4% of GDP through the illegal cash conversion and export of capital

Author: Alex Freedmann Section: Major Events of the Month

Issue: March 2012, Vol. 7, No.3

Tags: Zubkov

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Financial Machinations

About 2trln rubles, or about 4% of GDP, was smuggled out of Russia's economy via laundering money abroad and illegal cash conversion inside the country, Viktor Zubkov, the first deputy prime minister that heads the Task Force tasked with identifying and stopping illegal financial transactions, said.

“All this affects the pace of our economic development, reduces the incentives for investment and poses a serious threat to our national security.” Zubkov further noted that most of the illicit financial transactions are carried out by ‘fly-by-night’ firms that operate in the tax and customs spheres and financial markets in and outside Russia.