The Dutch could punish Putin all by themselves

2014/7/24 13:05:54

An opinion poll published on Wednesday in the daily De Telegraaf said 78 percent of the Dutch want punitive sanctions taken against Russia even if it harms the Dutch economy.

 

< Photo: A container ship enters the Rotterdam port.

 


By Thomas Escritt and Harro Ten Wolde, Reuters, as published by Business Insider:

 

The seafaring Netherlands prides itself on being a trading nation, reluctant to let politics get in the way of a good deal.

 

But since the downing, allegedly by Moscow-backed rebels in eastern Ukraine, of Malaysia Airlines flight MH17 with the loss of 193 Dutch lives, a growing Dutch chorus has called for the country to use its trade power to hit Russia in the wallet.

 

Dozens of Russian firms have chosen to incorporate in the Netherlands to save money on tax, taking advantage of an extensive network of double taxation treaties. The country is also one of Russia's largest trade partners.

 

Rotterdam, the world's fourth-largest port, is a major distribution hub for fossil fuels and minerals and was the largest destination for Russian exports in 2013, importing $70 billion of goods excluding gas, according to the United Nations and the World Trade Organization.

 

Crude oil accounted for $22 billion of the total, followed by coal and metal ores. Much of it was re-exported, either raw or after refining or processing — Rotterdam is the entry point for a big slice of imports to Germany, Europe's largest economy.

 

The trade in mineral fuels is very important in the trade relationship between the Netherlands and Russia and that dominates, said Marjolijn Jaarsma of the national statistics agency Statistics Netherlands.

 

Almost two thirds of that is for re-export, she said. It's the Rotterdam effect.

 

That suggests the Dutch economy is less dependent on Russian imports than the trade figures indicate.

 

According to a report last year by U.N. agency UNCTAD, the Netherlands was one of the top three jurisdictions, along with Cyprus and the British Virgin Islands, for the round-tripping of Russian investment money.

 

Under that technique, money that looks like foreign investment abroad is sent to a low-tax offshore financial center and then comes straight home, giving the owner legal protection against expropriation or arbitrary acts by government.

 

An opinion poll published on Wednesday in the daily De Telegraaf said 78 percent of the Dutch want punitive sanctions taken against Russia even if it harms the Dutch economy.

 

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