...the most important reason why unofficial capital flight has declined stems from government policy. Liberalization of capital controls that began in President Vladimir Putin's first term culminated in full capital account deregulation by 2006. This made many illicit cross-border transactions simply superfluous.Imagine that, capitalistic acts between consenting adults made legal!
The government stopped controlling the foreign borrowing practices of Russian companies, residents' purchases of securities abroad and the purchases of Russian securities by nonresidents. Of course, the"nonresident investors" in Russia are mostly foreign subsidiaries of "resident" corporations.
Big business supported and welcomed easier access to a global financial system that was founded on the principles of hyper-mobile, unregulated and under-taxed capital. In addition to providing easier access to more favorable tax regimes in the Cayman Islands and the reliable court systems of Britain and the Netherlands, this arrangement provided the moneyed elites with an insurance policy against governmental expropriation.Which the civilized world knows as a 'civil right'. The absence of which only can be enforced with slave labor camps and execution chambers in the Lubyanka basement. As in the 'good old days' when citizens kept a suitcase packed for the night when the NKVD knocked on your door. Speaking of 'dirty secrets'.