Support The Moscow Times!

Legal Money Laundering Scheme Exposes Russia's Bailiffs


Russian money launderers are exploiting government bailiffs to transfer dirty cash out of the country.

A legal loophole may have already seen more than 16 billion rubles ($269 million) in surreptitious funds sent abroad, the Kommersant newspaper reported Friday.

The scheme requires a Russian judge to sign off on a debt collection agreement between a Russian citizen or company and a business or individual based outside of the country.

When bailiffs use this court judgement to transfer money from a Russian “debtor” to their “creditor” abroad, Russian banks are unable able to properly scrutinize the deal.

Russia's Central Bank told Kommersant that the subterfuge enjoyed the full protection of the law because Russian banks and the Federal Bailiff service are both legally unable to question court decisions. It now hopes to tackle the problem by allowing banks to refuse any “suspicious” debt repayments.

More than 37 billion rubles ($624 million) were transferred about of Russia as part of debt repayment plans in 2016.

In each case, payments ranged from 400 million ($6.8 million) to 6 billion rubles ($101 million).

Read more

Independent journalism isn’t dead. You can help keep it alive.

As the only remaining independent, English-language news source reporting from Russia, The Moscow Times plays a critical role in connecting Russia to the world.

Editorial decisions are made entirely by journalists in our newsroom, who adhere to the highest ethical standards. We fearlessly cover issues that are often considered off-limits or taboo in Russia, from domestic violence and LGBT issues to the climate crisis and a secretive nuclear blast that exposed unknowing doctors to radiation.

Please consider making a one-time donation — or better still a recurring donation — to The Moscow Times to help us continue producing vital, high-quality journalism about the world's largest country.