The world remains gripped by the revelations made in the papers leaked from Panamanian law firm Mossack Fonseca. But Moscow has greeted the coverage with what might be characterized as calm indifference.
Aware that President Vladimir Putin would be linked to offshore schemes, the people around him began their PR maneuvers ahead of time. The week before the papers were released, the Kremlin was forewarning the public about an imminent “information attack aimed at destabilizing Russia in light of its success in Syria.”
The reaction of the Russian individuals mentioned in the Panama Papers—at least those who have gone on record so far—has also been calm. Some have denied knowledge of ownership of any offshore accounts. Considering the way offshore structures operate and set up, is not an implausible proposition.
The term “offshore” is vague to an ordinary person, and it is difficult to disentangle complex language of transactions, registration documents, and credit lines. Inside Russia, corruption often assumes a closer and uglier face. Considering that the public has been tolerating and even facilitating its growth, it is unlikely that they will become closely interested in an international investigation of a Panama law firm. The files will provide an important record, but are unlikely to trigger any political reaction in the near future.
An Established Truth
It is reasonable to assume that the risks (and therefore, costs) for international partners of doing business with Russian counterparts will rise. But the size of these new risks depends on the severity of measures imposed by the world’s major powers in their fight against tax havens.
Several states have already announced official investigations into the entities mentioned in the Panama Papers, but as has been noted, the real impact is to confirm what we have long known—that tax havens and offshore finance provide a vital anchor to the global economy. It is not a new revelation by any means, but the scale, scope, and the specific role of Panama—a highly secretive tax haven—is now confirmed by the massive volume of data released to the public.
We’ve also learned that the word “oligarchy” should perhaps not only be readily associated with Russia. The concentration of political power among a wealthy few looks more like a global pattern than ever.
Anastasia Nesvetailova is a professor of international politics and director of the Global Political Economy M.A. at City University London. This article was originally published on The Conversation.
