The Dutch way of protecting Russian oligarchs

21 April 2022

The Dutch way of protecting Russian oligarchs

Foto: SP

The failure to tackle Russian oligarchs effectively is not accidental, but a consequence of a system that pampers oligarchs. What we need is not Stef Blok, but a change of system.

The terrible war in Ukraine must stop. The political process gives little cause for optimism so far, which is why effective sanctions are of great importance. The EU has surprised friend and foe with its speedy adoption of one sanctions package after another. But what about the implementation? In the first weeks, the Netherlands embarrassingly lagged behind other countries. Only after a scathing parliamentary debate on 31 March (five weeks after the start of the Russian invasion) could Minister Hoekstra no longer stand by. Long parliamentary letters were to show what the government was going to do. And Stef Blok was appointed as sanctions coordinator - for six weeks. It is as yet unclear what his added value is.

An important part of the sanctions is freezing the assets and property of Russian oligarchs. However, this is a painfully slow process, particularly in the Netherlands. On 1 April, the Netherlands had obtained EUR 515 million, a pitiful sum out of a total of some EUR 45 billion. One explanation for this is the fragmented bureaucracy. No fewer than eight ministries are involved, plus several executive departments. Why could the government not have started streamlining this before the invasion? Sanctions had been in the air for some time. Indeed, sanctions had already been announced after the annexation of Crimea in 2014.

An equally important explanation is one of a systemic nature: our tax system promotes the entry of big money. Holland's Tax Paradise means that large assets are ingeniously protected and hidden; concealment by trust offices is hardly countered, if at all. It is an inherent consequence of a neo-liberal economy in which capital is continually moved for the sake of profit maximisation, and where social costs and benefits play no role.
It is painful but true: the Netherlands plays the Champions League when it comes to facilitating oligarchs, but we are at the bottom of the league when it comes to tackling the Putin clique. The progress of the Amsterdam Zuidas trust offices is much more advanced than the sanctions team of Wopke Hoekstra and Stef Blok.

The time has come to reverse this trend. The Netherlands must stop being a tax haven for the rich, to begin with for the wealthy circle around Putin. Take a look at other countries that are way ahead of us. Invest in supervision and compliance with sanctions. Stop the fragmentation and provide a single point of contact. Create a public trade register with information about all companies. And ban the trust sector: trust offices are merely fiscal constructions to hide assets and evade tax. Law firms are cashing in on this. What we need is legislation and enforcement against this practice.

If the government were to take up this gauntlet seriously and set to work on dismantling the Netherlands Tax Haven, something good might yet come of the terrible war that Putin started.

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