Vladimir Putin threatens crackdown on Russian business offshoring Russia's President Vladimir Putin upbraided his government on Thursday for failing to stop the country's chronic capital outflow and threatened sanctions against Russian companies that register offshore. I spoke about the task of de-offshoring of the economy in my address last year. Why, let me ask directly, has there been so little results? Mr Putin asked. Russia registered net capital outflows of $48bn in the first nine months of this year, and HSBC expects the figure to rise to $65bn for the full year - up from $55bn in 2012. Mr Putin criticised the $50bn deal in March where Rosneft, the state oil group, bought TNK-BP, the British oil firm's joint venture with AAR, the consortium led by tycoon Mikhail Fridman's Alfa Group. The sale . . . was done outside Russian jurisdiction, and yet the sellers are known - they are Russian citizens. The buyer is also well known - one of Russia's largest companies," Mr Putin said. The president demanded that companies owned by Russians but registered abroad be taxed in Russia and excluded from public contracts, subsidies and policy loans. Russian entrepreneurs have long sought to shield their assets from a state with a record of expropriating them. The extent of their offshore holdings was highlighted earlier this year by the collapse of Cyprus's financial sector, which was stuffed with billions of euros in Russian deposits. The rapid privatisation of state assets in the 1990s amid political and economic turmoil made several of Russia's largest investors very rich but also vulnerable to later accusations over allegedly illegal deals. Mr Putin started trying to lure investors back from his first term in office by introducing a 13 per cent flat income tax rate. But investor confidence dwindled when Mikhail Khodorkovsky, one of the tycoons who made their fortune in the 1990s privatisations, was jailed and his Yukos Oil company sold off to competitors. Mr Putin's admonishment comes as a slowdown in investment has drastically lowered Russia's economic growth, with gross domestic product now forecast to increase by just 1.4 per cent this year, down from 3.4 per cent in 2012. The president for the first time admitted that the slowdown was mainly a result of domestic factors. Yes, of course, we are suffering from the aftermath of a global crisis. But I must say very directly, the main reason for the slowdown is not external, but internal," he said. Analysts cautioned that Mr Putin's new policy proposals were unlikely to be successful. Alexei Kudrin, a former finance minister, criticised the proposals as a mere tactical response to Russia's economic problems. Yaroslav Lissovolik, chief economist at Deutsche Bank in Moscow, said the measures might limit the degree to which state support and loans leak out of the country, but added: "The tax issue or state support may be important incentives, but there is also the factor of the broader investment climate, and if it is not improved then the effect in bringing capital and corporates back will not be as significant." Vladimir Pantyushin, an analyst at Barclays in Moscow, said in a research note that Mr Putin's measures did not seem to improve the chances of achieving his target of raising investment to 25 per cent of GDP by 2015, from 22 per cent last year. Mr Putin pledged to improve the investment climate, but analysts said the speech was short on specifics.