Discrepancies in trade figures amounting to as much as US$700 million annually may point to a massive capital flight from Russia to Ireland and should be investigated, according to Russia's Prime Minister, Mr Vladimir Putin.
Speaking at a press conference in Moscow following talks with the Taoiseach, Mr Ahern, Mr Putin said that while Russia estimated its annual trade with Ireland at $1 billion annually statistics compiled in Ireland produced a figure of only one-third that amount.
Sources in Moscow told The Irish Times that part, though not all, of the discrepancy was accounted for by legal imports of oil by an Irish-registered company which then legally sold the oil on to other countries.
Last night a spokesman for the Government said most of the discrepancy arose because an Irish-registered non-resident company or companies had exported oil from Russia to third-party countries. "They appeared to be exporting goods to Ireland that we were not importing." These transactions were legal, he said.
Russian businesses look on Ireland as an "offshore zone" and while Mr Putin emphasised that this was a genuine method of doing legal business it may also have been used by Russians to lodge "illegal profits".
Capital flight is very much in the news in Russia at present with allegations that up to $10 billion was moved from Russia through the Bank of New York. Allegations of money-laundering have been made but there is a very fine distinction between money-laundering, which is illegal, and capital flight, which often takes place within the law.
The main distinction between the two concerns the provenance of the money which is moved from one country to another. Money gained through illegal means, such as profits from organised crime, is often moved from country to country as part of a money-laundering project. Money earned legitimately leaves countries as part of legal capital flows.
Mr Putin made his comments following the signing by himself and Mr Ahern in the Moscow White House of bilateral agreements to help fight crime and drug-trafficking and against the background of strong allegations by Russia's former prosecutor-general that vast amounts of money have left Russia illegally.
In an interview with the Moscow Times yesterday Mr Yuri Skuratov said almost $4 billion of last year's IMF assistance for Russia never entered the country but was sold by the central bank directly to Russian banks with government connections.