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How Russians Are Reacting to CRS and Information Exchange Rules
Manage episode 519444139 series 3330317
In this episode, we explore how wealthy Russians are responding to the tightening global network of financial transparency — particularly the Common Reporting Standard (CRS) and the Automatic Exchange of Information (AEOI). These frameworks have dramatically reduced financial secrecy, forcing individuals to adapt quickly or risk exposure to Russian tax authorities and enforcement actions.
Key Discussion Points:
- Formalizing Emigration:
- Breaking Russian tax residency is the first line of defense.
- Steps include spending fewer than 183 days in Russia, proving that one’s “centre of vital interests” (family, home, business) is outside Russia, and — in extreme cases — renouncing citizenship.
- Failure to formalize emigration leaves individuals subject to Russia’s worldwide taxation rules.
- Choosing “Safe” Jurisdictions:
- Individuals are relocating to countries perceived as low-risk or outside the CRS network.
- Some still pursue “quiet” jurisdictions that are less transparent, though these options increasingly carry higher compliance risks and reputational exposure.
- Building Complex Asset Structures:
- Wealth is being shielded through multi-layered arrangements — companies, trusts, and foundations spread across multiple jurisdictions.
- The goal is to make it difficult for any one country to reconstruct the full picture of ownership or to comply fully with data requests under Exchange on Request (EoR).
- Asset Diversification:
- Moving wealth into asset classes not yet fully captured by AEOI or CARF, such as:
- Real estate (although OECD’s new Framework for AEOI on immovable assets is closing this gap)
- Art and collectibles
- Precious metals
- Digital assets, such as cryptocurrency — though CARF is expanding to cover these as well.
Conclusion:
For many exiled or internationally mobile Russians, AEOI represents a systemic threat — automatic visibility of their assets to Moscow. Meanwhile, EoR poses an individualized, targeted threat that can be used for political or legal retaliation.
Their defensive strategy has become a race: to sever fiscal ties to Russia and restructure wealth before the state weaponizes global transparency tools.
Takeaway:
The age of anonymous cross-border wealth is ending. Russian nationals — like all global citizens — must adapt their financial strategies to a world where transparency is the rule, not the exception.
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