There are good reasons for Russian companies to locate in the Netherlands. The first is well known: taxes. Netherlands has tax treaties with more than ninety countries and a tax regime that allows tax-free money to flow through the Netherlands.
The Netherlands is also attractive because their legal system provides unique protection against the wrath of Putin. This was particularly evident in recent years in the settlement of the bankruptcy of what was once Russia’s largest oil company was: Yukos Oil.
Between 2006 and 2013 an obscure legal conflict between the Dutch branch of Yukos and its Russian curator was fought in the Dutch courts. The Supreme Court decided this conflict end of 2013 in favor of Yukos Oil.
Yukos Oil was the oil company of Russian oligarch Mikhail Khodorkovsky. Khodorkovsky was one of the richest Russians in the nineties, when Russia was known as the Wild East. He had received oil concessions after the fall of communism. His bank Menatep was supposed to organize the state auctions for oil concessions, but strangely enough, only one bidder appeared at the auction.
When Putin came to power, Khodorkovsky accused the new president – ironically – corruption. In 2003, Khodorkovsky was arrested on suspicion of tax fraud. Eventually, he was sentenced to eight years in prison and was Yukos Oil – or what was left of it – was declared bankrupt in Russia. But a significant portion of the assets of Yukos Oil was still stuck in a Dutch company: Yukos Finance BV. The Russian administrator tried to sell these Dutch possessions.
The Yukos bankruptcy court and the Dutch were, according to tax expert Ronald Holtkamp JDsupra, ‘a great stimulus for the influx of Russian companies in the Netherlands.”
The presence of so many shell companies also creates opportunities for stronger sanctions. Since so many assets of Russian companies are structured in the Netherlands, freezing of assets or other financial measures would disrupt finance in the Netherlands.
The U.S. sanctions were still significantly more stringent. For example, on the U.S. list were all the names of the largest oil producer Rosneft, the second largest gas producer Novatek and the third largest bank Gazprombank. All companies allies of Putin lead. In addition, the U.S. also focused on people like Timchenko, who are not yet on the European list.
For the U.S. it is easier to sanction because they have a limited economic relationship with Russia. But vervlochtendheid of Netherlands and other continental countries, Russia is huge. In particular, the dependence on Russian gas makes a confrontation with Russia economically painful.
The European foreign ministers nonetheless accelerated expansion of the sanctions list with more people and businesses. The European ministers also threatening further sanctions which certain sectors of the Russian economy, such as defense and financial markets if Russia takes enough away from the Ukrainian separatists.
That is no idle threat. The European economy may be economically dependent on Russia, Russian companies can be crippled due to their mailbox operations at a financial blockade Netherlands. Not for nothing did the German newspaper Die Welt noted that ‘if there is one country on which sanctions can cause pain it is the Netherlands.”
