At its highest levels, Russian corruption over the past 20 years has been disguised by networks of shell companies and facilitated by foreign banks willing to turn a blind eye to state embezzlement, according to Karen Dawisha, a political science professor at Ohio-based Miami University.
Whatever the effectiveness of sanctions meant to sway Russia's involvement in Ukraine, one thing is certain: they've worsened the country's capital flight problem. By year's end, approximately $128 billion will have moved abroad, up from $63 billion in 2013, according to Russia's central bank.
The expansion of Western sanctions targeting Russia will require banks to closely vet additional types of credit and transactions tied to financial, energy and defense firms, according to attorneys.
The EU on Monday adopted extended sanctions targeting Moscow's oil and defense industries' measures expected to raise compliance costs for banks in the economic bloc, once implemented.
Military clashes in Ukraine are complicating behind-the-scenes efforts by some EU nations to prevent new sanctions and roll back existing financial restrictions targeting Russia.
The European Union Tuesday further restricted Russia's access to the continent's financial markets and energy technology industry and promised targeted sanctions against individuals and entities on Wednesday.
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