Russian Elites' Foundations Exempted from Audits Amidst Wealth Surge Linked to War

Russia's State Duma has approved a new law that exempts private foundations established by Russian citizens and international entities from mandatory financial audits. The legislation, which takes effect from 2026, will also apply retroactively to financial reports from 2025. This change means that private foundations will no longer be required to undergo audits if their previous year's assets exceeded 3 million rubles (approximately $153,500), with the exception of public utility funds.

Russian authorities have justified the move by stating that the nature of private foundations "does not require transparency of their reporting and auditing," and that such reporting is "not in the public interest." This decision grants further privileges to wealthy Russians, many of whom have reportedly seen their fortunes grow substantially since the commencement of the war in Ukraine.

Reports indicate that foundations linked to former Russian President Dmitry Medvedev have experienced a dramatic increase in assets. While his foundations previously accumulated up to 8 billion rubles annually, this figure surged to approximately 70 billion rubles in 2024. These foundations are alleged to control significant assets, including residences and superyachts, and are reportedly funding military projects, such as drone and equipment supplies for the Russian army through entities like the "Nasza Prawda" foundation.

Similarly, the Akhmat Kadyrov Foundation in Chechnya, associated with Ramzan Kadyrov, plays a crucial role in financial redistribution within the region. This fund is reportedly financed through mandatory and voluntary deductions from local salaries, public procurement contracts, and corporate contributions.