RUSSIAN President Vladimir Putin on Thursday referenced the bail-in of depositors in Cyprus last year as one reason why Russian capital should be repatriated.

In a 70-minute state of the nation address to the Russian parliament, Putin proposed full tax and legal amnesty for capital to return to Russia, in a bid to kick-start the economy.

Repatriating capital to Russia legally would mean “there will be no questions from the tax and law enforcement bodies,” Putin promised.

“Everybody who wants to should have the right to come back to Russia. We have to turn this offshore page of our economy. I believe that after the Cyprus events our business will understand that its interests abroad are not valued and the best guarantee for them is national jurisdiction.”

Cyprus became a major offshore centre for Russian businesses in the 1990s, but the emergency bailout of Cypriot banks in 2013 meant big losses for some of them.

In Nicosia, Finance minister Harris Georgiades skirted a question when asked to comment on Putin’s remarks.

“I do not wish to comment on the decisions of foreign governments,” he told reporters.

“We are confident that Cyprus was, and continues to be, an excellent centre for financial services, and we are focusing on boosting that comparative advantage,” he added.

Putin recently approved a bill to ‘deoffshorise’ businesses. The new law is slated to enter into force on January 1, 2015.

In 2014, Cyprus was among the ‘big three’ offshore destinations for Russians, with $2.9bn (€2.3bn) in foreign investment, followed by Luxembourg ($1.9bn) and the British Virgin Islands ($1.05bn).

Cyprus Mail