An analysis of EU FDI inflow into Russia

This paper analyzes the trends and drivers of inward foreign direct investment in Russia between 2009 and 2019. The EU is the premier provider of FDI into Russia, even though we find that reported values overstate its role given the use of Special Purpose Entities (SPEs). Key drivers of Russian FDI flows are the price of oil and natural resource markets, macroeconomic volatility, monetary policy, sanctions and trade impediments. As FDI is highly concentrated in natural resource rich regions, we argue that a sectoral decomposition understates the importance of fossil fuel extraction. Based on this analysis as well as the literature on growth effects of FDI, we argue that Russia needs more investment into higher-value added activities.

FOREIGN DIRECT INVESTMENT IN THE RUSSIAN ECONOMY: IN THE TRICK MIRRORS OF STATISTICS

With the latest statistics of the Bank of Russia (BR) and the Eurostat according to the directional principle, the article presents an appraisal of real (not formal) direct investment stocks between Russia and the rest of the world. It is shown that many large Russian corporations have subsidiaries abroad (mainly in the form of special purpose entities (SPE)), invest in them and then partially return the funds disguised as FDI, but under foreign jurisdiction. It is established that at least half of FDI in the Russian economy are in fact the returned funds of Russian corporations. In this manner, the last-mentioned can minimize the taxes, withdraw capital from the jurisdiction of Russia and furtively carry out dubious financial schemes (many countries treat SPEs activities as confidential). According to the BR, about 80% of direct investments in Russia belong to small or even tiny countries (the Bahamas, Bermuda, Cyprus, Luxembourg, etc.) that act in deed as intermediaries. The statistics of the BR contain thus little information on real direct investors in the Russian economy.

How Enron Used Accounting for Prepaid Commodity Swaps to Delay Bankruptcy for One Decade: The Shadowy Relationships With Big Banks

Accounting standards for prepaid commodity swaps did not exist until 2003. This absence of regulation gave Enron the opportunity to have its own homemade accounting. Two actions facilitated this task for Enron: (a) The Securities and Exchange Commission granted Enron in January 1992 a unilateral privilege to use mark-to-market valuation for energy contracts. This private communication was made at a time when viable markets did not exist. (b) Big banks colluded with Enron’s top executives to design structured finance contracts that allowed Enron to report at least US$8.7 billion of loans as cash flow from operations. Seventy-one percent of the cash flow from operations reported in the last 5 years of Enron’s existence came from these loans. JPMorgan Chase and Citigroup effectively made it easy for Enron to carry out this fraud. The two banks established their own special purpose entities to give these loans the appearance of legitimate trade transactions using prepaid commodity forwards and swaps. This article outlines some of the schemes that the two banks devised to help Enron appear financially healthy when in reality it was near bankruptcy for years.

PRINSIP BANKRUPTCY REMOTE DALAM SEKURITISASI ROYALTI HAK CIPTA

Nowadays everyone needs source of funding to expand their business in every field. One way to get funding sources is from securities. Form of securitization always experience growth in several countries in various fields including intellectual property right, especially copyright. Every copyright holder can continue to help creators to always work through the securitization process. Securitization in copyright conducted through a vehicle called Special Purpose Vehicle or Special Purpose Entities as an issuer of securities. The securities acquired from commercial agreement/license agreement between the third party and the holder of the copyright in the form of royalties. These royalties which are released to the market in the form of securities. This gives rise to the right to collect for securities holder investors to a Special Purpose Vehicle or Special Purpose Entities. This collection right which can result in the implementation of bankruptcy law to a Special Purpose Vehicle or Special Purpose Entities are. However, the Special Purpose Vehicle or Special Purpose Entities can not be bankrupted just because the inside of a Special Purpose Vehicle or Special Purpose Entities contain bankruptcy remote principle therein.