MOSCOW (Reuters) - Russia’s sovereign Eurobond this year should offer a “foreign currency amnesty” option so Russian businesspeople can use it to repatriate funds from abroad, said Andrey Kostin, the head of the country’s second-largest bank, VTB.
Some wealthy Russian entrepreneurs are interested in buying sovereign Eurobonds as a way to repatriate their assets from abroad, where they believe they are potentially at risk from Western sanctions.
In an interview with Reuters, Kostin said he expected the finance ministry to sell the Eurobond in the near future as there was demand for the paper.
“The paper ... should have little difference from other market issues. With one exception: the legislative framework should be prepared for a foreign currency amnesty,” Kostin said.
He did not spell out what he meant by a foreign currency amnesty. Russian policymakers have discussed scrapping profit tax on funds repatriated from abroad, and waiving any penalties incurred because the money was held outside Russia’s tax jurisdiction.
Kostin said the new foreign currency amnesty mechanism could be set up before the finance ministry taps the Eurobond market.
VTB, which acted as the organizer of sovereign Eurobonds in the past, will aim to organize the issue this year as well, Kostin said.
The finance ministry said late last year it would welcome foreign investors to buy the Eurobond and could consider increasing the amount of bonds on offer from the planned $3 billion if it sees strong demand for the papers.
Reporting by Katya Golubkova and Dmitry Antonov; Editing by Andrey Ostroukh