Hello. I'm Mike, a lawyer living in Hong Kong.
Now, let's talk about one topic that interests me.
On 23 July, President Putin made a meaningful announcement: "I have an unprecedented proposal for you ! On 23 July, President Putin made a meaningful announcement. Then, on 26 July, during the Tokyo Olympics, Prime Minister Mishutin visited the Northern Territories and suddenly declared: "We are going to make an unprecedented proposal.
"'We will turn the Northern Territories into a tax haven!
This is a case!
Japan protests vehemently Japan protested vehemently. Japan said that it would not accept a proposal based on the assumption that Russia had sovereignty over the islands, and that it would continue to hold talks on the return of the four islands.
However, Russia maintains the position that there is no border dispute with Japan. So there's no point in talking about restitution or sovereignty, let's just talk about economic cooperation, which I think is a proposal that Japan would like.
How is it possible that the Northern Territories are a tax haven?
It is possible.
Russia will not only offer tax incentives, but will also develop its financial system to make it easier to deposit funds. Then, wealthy people in Russia and China, which are good friends with Russia, will move their funds there. Wealthy people in other countries, who were skeptical at first, will gradually recognize that Russia and China can function as a destination for their funds and will begin to move their money there.
Finally, it was recognized as a tax haven by the capitalist countries and became the Cayman of the Far East.
Japan, which had tried hard at first to never recognize it, could no longer ignore it for economic and business reasons, and began to consider the use of the Northern Territories as a tax haven. Russia proposes a Japan-Russia agreement that includes preferential treatment for Japanese companies and Japanese nationals, taking into account the geographical advantages and historical background of the territory. It's a dead end. There is no reason not to take advantage of it.
Finally, the Northern Territories will replace Cayman as the base for Japan's asset management business.
The discussion on the return of the Northern Territories will be completely buried, and the negotiations will be for the conclusion of a peace treaty.
You can't do that, can you?
Russia is a socialist country and the regulations can change at any moment, so you can't be afraid to put your money in there, information can leak out.
Russia "Please be assured. We will adopt the one country, two systems and make the Northern Territories a special administrative region of Russia."
Japan "Um, the one China is using for Hong Kong?"
Russia "Yes. We will make the Northern Territories a free and open region like Hong Kong, following that system that has been successful in China, which is a one-party dictatorship. You have seen the success of Hong Kong, haven't you?"
Japan "..."
The world situation is changing dramatically right now. It is difficult to predict whether China will become the world's dominant power, whether there will be a war between the U.S. and China, whether India will become a world power, whether the EU will survive after the UK leaves, how climate change will change the world, whether capitalism is coming to an end, and so on. There are a number of things happening right now that until recently we could not have predicted. Even here in Hong Kong.
So maybe this Russian proposal is not so ridiculous. I proposed "Okinawa as a tax haven" earlier, but maybe this place will become a realistic tax haven first. I don't know.
This proposal, by the way, is a long time coming, isn't it? In fact, it's an idea that Russia has been working on for a long time.
The story goes back to 2013. The Mediterranean island nation of Cyprus had fallen into serious financial difficulties as a result of the Greek financial crisis, which had begun earlier that year.Cyprus shock This was the year of the so-called "Great Depression". Cyprus is a member of the European Union, so the EU had to do something about it, and the EU started to provide financial support, but the conditions were
"We will tax bank depositors between 7 and 10 per cent of their deposits."
THAT'S THE IDEA. NATURALLY, THE PUBLIC PANICS. PEOPLE RUSHED TO ATMS TO WITHDRAW THEIR DEPOSITS BEFORE THEY WERE TAXED. THE GOVERNMENT RESPONDED BY ISSUING A DEPOSIT BLOCKADE ORDER. IT WAS A MESS. AFTER MUCH WRANGLING, IT WAS FINALLY SETTLED THAT ONLY HIGH DEPOSITORS WOULD BE TAXED.
What has that got to do with Russia?
There is a big one.
At the time, many wealthy Russians were transferring and investing their money in Cyprus, which is a tax haven for many of them. And it is geographically close. As a result, Cyprus had an unusually large amount of bank deposits relative to the size of the country's economy, most of which belonged to wealthy Russians. In other words, if the EU provided financial assistance to Cyprus, the majority of it would result in the flow to wealthy Russians. This was a background that the public would not tolerate. So, the solution was to target the Russians, who are high depositors, and tax them.
Russia must have been bitter about this. I am sure there were high-ranking Russian officials among the wealthy. Cyprus is unstable as a destination for the wealthy to escape their money. If that is the case, why not create a tax haven in Russia? The location should be an island at the edge of the country like the Isle of Man or the Isle of Jersey. An island in the Far East, where Japan is always making a fuss about something, would be the perfect location. Let's set it up when the time is right.
Thus, in 2013, the year after Vladimir Putin returned to the presidency, Medvedev, who became prime minister by turn, proposed to the government to consider creating a tax haven in the Northern Territories.
In 2013, the second Abe cabinet had just been formed. Mr Abe, a diplomat, met with President Putin 27 times during his tenure to try to resolve the Northern Territories dispute. However, Russia's stance is that there is no border dispute, so negotiations have always gone nowhere. Moreover, it has politely amended its constitution to prohibit the cession of land. This is Mr Putin's "royal hand" against Mr Abe, who is forever rehashing the territorial issue.
Kan has given up on the Northern Territories issue, having only had one conference call with Putin since he took office, and there has been no discussion of the issue.
This Northern Territories tax haven proposal was put out at that time. It seems that Japan has already given up on the Northern Territories issue, but you can't tell that to the people face to face. Then, I'll make a tasty proposal for the Japanese people, and you can use it to bring the country together.
That's pretty good, Vladimir Putin.
The Northern Territories issue is becoming more and more closely related to Japan's financial business, and we cannot take our eyes off it.
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