The cost of President Putin’s war are vast and incalculable, especially in Ukraine. But in Russia they amount to more than “just asting” of heavy Western sanctions. This cost as stated above includes not only talent, but other unspoken matters.
by Victor Cherubim
With more than 5 weeks into a war sending over 4 million Ukrainians as refugees and displacing millions more from their homes, little of the war has changed in Ukraine, but much has unnoticeably happened in Russia.
Young workers in Russia many weaned on a well-planned Western strategy of “hamburgers and Coco Cola” and holidays abroad, since the end of the USSR in 25 December 1991,some 30 odd years ago, are now becoming not used to restrictions at home.
Young workers are fleeing their country, particularly to salubrious parts of the CIS, to avoid conscription. Meanwhile, tech firms with international customers are relocating to avoid sanctions and the “stigma” of conducting Russian related business. This brain drain is not necessarily surprising given the global hunger for anything technological related, which Russia is well known to produce with almost as much vigour, as it does natural gas, oil and vodka.
In just five weeks, according to Associated Press, some 70,000 computer specialists have emigrated from Russia. Another 100,000 tech workers as estimated, may leave soon for safer shores. To prevent any further outflow, President Putin has this week signed legislation eliminating all income taxes until 2024 for Russian IT company employees,
As people walk past Red Square in Moscow with St.Basil’s on left and Spasskaya Tower second on the right, according to reports, the sudden mood in the business centre of the City, is frosty, not only due to the weather, but due to the business and political climate.
An elite crowd of IT employees of “boff companies”, some with visas to the EU, whilst many without, are wanting to relocate to Russian Federation countries. The latter are more than eager to take on this talent, which has been in short supply over decades.
The cost of war
The cost of President Putin’s war are vast and incalculable, especially in Ukraine. But in Russia they amount to more than “just asting” of heavy Western sanctions. This cost as stated above includes not only talent, but other unspoken matters.
Whilst this war rages on in Ukraine, we gather other frozen conflicts with Russia, are thawing.
Last weekend, Azerbaijani forces were accused of advancing into the province’s demilitarised zone in Nagona-Karabak.
For Russian soldiers high up in the Zangezurmountains of Armenia, the war in Ukraine must seem very far away. While their comrades’ fight and die in Eastern Europe, just across the border, lies the disputed region of Nagorno-Karabakh, formally inside Azerbaijan but held by Armenian separatists since the fall of the Soviet Union in the early 1990, and run as a de-facto part of Armenia.
The timing couldn’t be worse for Moscow now being forced to commit personnel and equipment to maintain the status quo between Yerevan (Armenia) and Baku (Azerbaijan). Moscow is obliged to protect Armenia, as a member of its Collective Security Treaty Organisation (CSTO) pact.
Whilst this war rages on in Ukraine, we now are informed that one reason for the de-escalation is to re-group Russian forces, perhaps, due to its dependency on Ukrainian technical spare parts for its “war machine.”?
Whilst this war rages in Ukraine, there is Big Power play in Turkey.
President RecepTayyip Erdogan has chosen his timing to be not only a mediator between Russia and Ukraine, but also exert his influence, in the entrance to the Black Sea, a seaway used by the contending forces.
Whilst this war rages in Ukraine, there is India wanting to play an even bigger role in this war?
Should we know why Britain sent Foreign Secretary, Liz Truss, to New Delhi, whilst Russia also sent Sergei Lavrov, its Foreign Minister to India at the same time, while some days earlier Chinese Foreign Minister, Wang Yi paid an overdue visit to his counterpart, Minister Jaishankar?
One Correspondent compared Lavrov smiling at Narendra Modi, like a “Cheshire cat”, while
Liz Truss was “straight jacket” in her tonewanting India to play by the “Sanctions Rule book”.Foreign Minister Wang Yi was diplomatically subdued.
The timing of the war could not be worse for Russian oligarchs?
Russian oligarchs are fleeing their second homes in Europe to avoid sanctions, like birds before a total eclipse. They are flying in all directions to escape sanctions. Banks all over the world are having to sequestrate their asset base to enforce sanctions. They are under duty to report frozen assets and suspected breaches.
Indicators of sanctions evasion risk are as follows:
1. Russian clients communicating changes to the beneficial ownership of their non-Russian or dual nationality family members.
2. Requests to transfer assets between Russian national / dual national family.
3. Use of Trust arrangements, with circumstances of transfers calling into question indirect control or otherwise could retain a benefit from the assets transferred.
4. Assets transferred have usually been shares in companies in UK and or controlling stakes in these businesses.
5. Payments from venture capital and private equity vehicles.
6. Clients seeking to move all their assets to other financial institutions.
7. Clients domiciled in Russia asking whether they can make transfers.
8. Attempts to purchase sanctioned Russian securities.
9. Increased volume of transaction monitoring alerts results from Russian and others receiving larger transfers than is typical.
10. Payments received by UK Businesses, often innovative areas.
These and many more sanctions evasion risks are coming into force.
It seems a field day for British and other legal houses in the UK and abroad, to help in the litigation that, perhaps, is pending.
The Brits are adept in using every means possible to use one calamity in one part of the world, to benefit another part of their State coffers, which may be well known to the Oligarchs.
I will not be surprised, if they use the Ukrainian war for the purpose of tracking money laundering worldwide.
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