Russian central banker slams vast criminal cash exports

Russia's central bank chief said nearly $50 billion, or 2.5 percent of the national income, had been sent abroad illegally in 2012, much of it controlled by a single group of people - whom he did not identify.

Wednesday's findings by the Bank of Russia, one of the country's most respected institutions, amounted to an indictment of lawlessness and corruption in the system of "Kremlin capitalism" that has taken hold under President Vladimir Putin.

They also sent a parting shot from the soft-spoken Sergei Ignatyev, who retires as chairman in June after 11 years largely free of controversy. A successor has yet to be named.

The central bank study found that $49 billion, or around 2.5 percent of gross domestic product, was spirited illegally out of Russia last year.

"It can be payment for narcotics ... 'grey' imports ... bribes and kickbacks to officials (and) managers making large-scale purchases," Ignatyev told Vedomosti. "It can be schemes to avoid tax."

Anti-corruption activists say that capital flight can take any number of forms, with some banks shifting money through complex paper trails, shell companies and so-called "encashment" schemes designed to evade regulators.

Big state enterprises in particular are involved in shifting large sums of money abroad, sources say, while Russia's super-rich oligarchs use offshore centers to safeguard their businesses.

Statistics show that Cyprus is the largest source of foreign investment into Russia. Most of that money coming from the island is itself Russian in origin, bankers say.

The amount of dirty money flowing in and out of Russia has more than doubled over the past eight years, robbing the country of productive capital and driving a huge underground economy, a recent study by a U.S. think tank found.

Global Financial Integrity, based in Washington, estimated that an average of $62 billion in money earned from corruption, human trafficking, arms smuggling and other illegal activities has entered or left Russia each year since the start of 2004.

That is a 228 percent increase from the $27.06 billion in illicit funds seen annually on average in the prior decade, the study found.