Russian illicit financial flows and political influence in South Eastern Europe: how financial flows and politics intersect in Montenegro and Serbia
May 2022
Briefing Note 08
Dr Tena Prelec, University of Exeter & University of Oxford
SOC ACE Project: Illicit finance and Russian foreign policy: new dynamics and linkages
PUBLICATION SUMMARY
This briefing note – part of a project advancing a new conceptual framework designed to improve our understanding of Russian illicit financial flows (IFFs) as linked to foreign policy aims – provides an overview of Russia’s economic presence in South Eastern Europe. It first considers its interaction with the post-Yugoslav region as a whole, then zooming into the patterns at play in Serbia and Montenegro.
These two countries have had a dramatic change in relations with Russia in 2014, when Montenegro implemented sanctions after the annexation of Crimea, and Serbia did not. This juncture offers a clear opportunity to think about the extent to which IFF from Russia are linked to foreign policy considerations. It is shown that flows were indeed disrupted in Montenegro in the short term and possibly rerouted to other political actors, while the partners in Serbia have remained, by and large, steady, with a remarkable resilience of the rent-seeking practices set in place in the early years of post-communist transition (1990s).
However, the findings of this research caution against seeing Russia’s interaction with the Balkans as a mere top-down, Russia-led, dynamic. It is instead shown how local actors and local foreign policy considerations influenced the IFF-F nexus, sometimes to the advantage of the local players, and sometimes of Russia itself.
