FILE PHOTO: A woman walks outside the European Commission headquarters in Brussels, Belgium, October 13, 2021. REUTERS/Yves Herman

March 17, 2022

BRUSSELS (Reuters) – The European Union should create an asset database to help to track down the owners of assets held by shell companies and make EU sanctions against Russian oligarchs more effective, a think tank said on Wednesday.

The 27-nation EU has imposed restrictions on 877 individuals, including wealthy Russian oligarchs and other prominent business people, over Russia’s aggression against Ukraine.

But the EU Tax Observatory, an independent think-tank hosted at the Paris School of Economics, said part of the wealth of those sanctioned was hard to trace because of financial secrecy and a lack of a comprehensive record of beneficial owners of shell companies used to hide real ownership.

The think tank estimated about half of total Russian household wealth was held abroad.

“There is as much financial wealth held by rich Russians abroad — in the United Kingdom, Switzerland, Cyprus, and similar offshore centres — as held by the entire Russian population in Russia itself,” it said.

It said Russians used chains of shell companies via the British Virgin Islands and Cyprus to make investments or to buy European real estate.

Russian citizens also used golden visa schemes offered by certain European countries to obtain residence or citizenship in exchange for investment, it said.

“A comprehensive database tracking where and by whom wealth is held could increase the efficiency of targeted sanctions,” the authors of the paper – Theresa Neef, Panayiotis Nicolaides, Lucas Chancel, Thomas Piketty and Gabriel Zucman said.

They said an EU task force could collect, cross-check and analyse all available information on wealth and assets held in EU countries by wealthy individuals above a given threshold.

This could pave the way for a permanent European Asset Registry that would gather wealth information across all asset types and could be used to fight financial crime, they said.

(Reporting by Jan Strupczewski. Editing by Jane Merriman)

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