CFR: Russia probably moves US treasuries to Belgium, Cayman Islands

MOSCOW, Aug 15 (PRIME) -- Russia may have transferred a significant part of its U.S. debt portfolio to Belgium and the Cayman Islands to protect against U.S. seizure, Benn Steil and Benjamin Della Roca, experts of the Council on Foreign Relations (CFR), said in a research note seen by PRIME late Tuesday.

“Russia appears to have sold only about 45% of its Treasury holdings – substantial, but far less than the 84% the media is reporting. 16% remain registered as Russian holdings in the U.S., and the remaining 39%, we believe, are being hidden in Belgium and the Cayman Islands,” the experts said.

According to the U.S. Department of the Treasury, Russia lowered its holding of U.S. treasury bonds to U.S. $15 billion in May from $96 billion in March.

But in accordance with additional official data of the treasury department that track sales of long-term treasuries, Russia sold only $35 billion of such securities from March to May, the experts said.

“The most logical explanation is that Russia moved these assets outside of the U.S. to protect against U.S. seizure. The two most likely destinations would be Belgium, home to custodian bank Euroclear, and the Cayman Islands,” the report said.

During April and May, Belgian holdings of Treasuries rose by $25 billion, while Cayman Islands holdings rose by $20 billion. That sum, $45 billion, is more than enough to account for the missing $38 billion, the experts said.

“With U.S.–Russia tensions increasing, we would not be surprised by further such “offshoring” of Russian Treasuries in the coming months.”

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