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Ban for public servants to have accounts abroad takes effect, but loopholes still in place.

August 09, 2013, 15:32 UTC+3 Zamyatina Tamara

MOSCOW, August 9 (Itar-Tass) - Russian public servants and lawmakers should be as clean as a whistle for a day already under a law which introduced a ban on them having accounts at foreign banks. The law to this effect was approved by the State Duma and was enacted by President Vladimir Putin on May 7 as part of the struggle against corruption. It gave three months to public servants and deputies to clean up their consciences and close bank accounts abroad. The law does not cover foreign real estate, but the sources of real estate purchases should be transparent.

On Thursday, when the time had come to sum up the results of "self-cleansing", it emerged that only one state official - Deputy Minister of Communications and Mass Media Denis Sverdlov - resigned from his post to keep his foreign assets, which his wife owned. Thus, Mr Sverdlov preferred to keep two eternal values - love of family and money, sacrificing his career for them.

However, there is one more victim of the new law. Russian billionaire Mikhail Prokhorov, who is on the Forbes wealthy list and owns the U.S. NBA club New Jersey Nets, had not to nominate his candidacy for the post of Moscow mayor. The Moscow elections for mayor will be held on September 8 and Prokhorov did not have enough time to withdraw his assets from foreign countries by the deadline set in the law. His fortune is estimated at 14 billion dollars. One cannot spend such big money with a free hand.

According to a well-known proverb, big money likes silence. Probably, therefore, no state officials announced broadly the transfer of their assets in Russia. “Yes, I had an account opened in the United States in 1992, when I taught at the California Institute of Technology," State Duma deputy from the ruling United Russia party Vyacheslav Nikonov told Itar-Tass. "I closed this account as this is not a problem in the modern world at all. I believe that fellow lawmakers did the same thing.”

In reply to a question how to control the keeping or not keeping of accounts abroad, Nikonov said, “It will be difficult to control it because the banks should not produce the information about their clients.”

“It is possible to get the information about the financial resources of a Russian depositor in indirect ways, but this is not mostly important," senior adviser of the UBS Bank Yuri Kobaladze told Itar-Tass. "It is important that the rule is set, the law entered into force, and there will hardly be many people who want to hide their money abroad and put their financial situation at risk.”

Retired Major General of the Russian Foreign Intelligence Service Yuri Kobaladze is sure that “far from all public servants are thieves and fraudsters.” Generally speaking, people should put their trust in public servants, he said, “I have worked in public service almost all my life and I am well aware what a humiliating low salary public servants have. Therefore, the country witnesses an upsurge of corruption. Now the state authorities ensure a worthy level of life for public servants and deputies and they should not bring their money abroad for a rainy day.”

Deputy Director of the Institute of World Economy and International Relations of the Russian Academy of Sciences Yevgeny Gontmakher has another view. He told Itar-Tass that the law on the ban of foreign accounts is imperfect, “Public servants and deputies have wives, husbands and children, so there is a loophole to circumvent the law and keep assets abroad. There is no really efficient scheme to control the fulfilment of this law and Russia also lacks any agreements on cooperation with financial and fiscal structures in Western countries.”

Meanwhile, as a member of the board in the Institute of Contemporary Development, which is developing the recommendations to the Russian president and government, Yevgeny Gontmakher is sure that the enacted law, despite its current shortcomings, is topical for the country, “It is important so that dishonest public servants and deputies will be brought to justice from time to time under this law. Let it be done just as a warning for the establishment. Then it will be a real lever in the struggle against corruption.”