When Wild West Met Wild East? Understanding the Special Place of the Bahamas in Russia’s Offshore Network

The embeddedness of the Russian economy in a complex network of offshore financial centres is well-documented in academic research and official statistics. For more than two decades, Cyprus has served as a de facto financial centre of Russia, having continually been the leading source of FDI into and out Russia, followed closely by other (often European) financial havens. This long-term historical pattern was interrupted in 2014/2015, when the Bahamas became the leading source of FDI inflows into Russia, accounting for more than 53% of FDI inflows in the country. Since then, top sources of capital flows into Russia have persistently included the ‘wilder’ financial havens such as Bermuda or the BVI, raising fresh concerns about illicit financial flows in and out of the country, including money laundering.