Jersey adopts anti-Putin sanctions – but will Moscow trade trip go ahead?

Friday 01 August 2014

Jersey Finance have not confirmed whether they plan to go ahead with sponsoring “the world’s biggest tax planning conference” in Moscow next month after Jersey followed the UK, US and EU in announcing the most stringent sanctions against Russia since the Cold War.

As things stand, Jersey Finance is set to sponsor and provide a speaker for the Intax Expo Russia in Moscow on 22 September – their promotional material bills the event as “the world’s biggest conference and exhibition for practitioners in the sphere of international tax planning, corporate and estate planning”.

But it’s not clear how that commitment squares with yesterday’s announcement that Jersey government is following the EU and America by enacting stringent sanctions against Russia.

So far, Jersey Finance have been unavailable for comment.

The tier three sanctions enforced yesterday include preventing Russian state-owned companies access to EU capital markets and banning the sale of bonds and equities with a maturity of over 90 days in state-owned Russian banks. Oil, defence and sensitive technologies are also targets for the sanctions, which are the most severe since the Cold War.

Announcing the sanctions yesterday, the Chief Minister’s department said: “The government of Jersey is committed to ensuring that Jersey’s sanction regime remains aligned with international developments.”

The sanctions are designed to put pressure on President Putin after Russian-linked rebels were accused of shooting down the Malaysian Airlines flight MH17, over Ukraine, killing 298 civilians.

EU and US companies and individuals will be prohibited from investing in debt, equities or other long-term financial products from state-owned financial institutions.  Four of Russia’s largest banks have a state ownership of over 50%, including Sberbank and VTB, which are also listed on the London Stock Exchange.

Although the Rouble fell to a two-month low after the news was announced, it is feared that British financial firms will pay a heavy price over the sanctions.

The Intax Expo Russia is billed as the world’s biggest conference and exhibition for international tax planning, corporate and estate structuring. It is expected to attract over 450 delegates and over 200 companies from up to 35 countries from around the world.

In recent years Jersey Finance has developed the Island’s reputation in Russia as a centre for financial services, notably banking, private wealth, capital and funds. The Jersey Finance website states: “We regularly attend conferences in Russia in conjunction to our business development visits to the region to help define and project the strongest possible message on behalf of Jersey’s finance industry to the Russia and Eastern Europe market.”