As the West Aims for Russian Sanctions, Here’s What We Know About the Oligarchs’ Secret Finances
As tensions continue to mount over the threat of a Russian invasion of Ukraine, US and UK authorities are seeking to strike figures close to Russian President Vladimir Putin where it could hurt: in Western safe havens where they keep and spend their money.
Late last month, US and UK officials said they were preparing economic sanctions that could be used against both sectors of the Russian economy as well as wealthy Russian individuals with close ties to the Russian president. Vladimir Putin and senior Russian government officials. Measures could include family members of potentially targeted individuals.
“Sanctions would cut them off from the international financial system and ensure that they and their family members can no longer enjoy the benefits of parking their money in the West and attending elite Western universities,” an official told Reuters. senior US official at the end of the last day. month.
The sanctions regime that British officials say they are devising is perhaps most worrying for wealthy Russians, who have long viewed London as a safe destination to store and grow their wealth.
In elite Russian financial circles, there is still this lingering concern about what the British authorities know and what they might do. — Alex Nice, Russia specialist
In late January, the British government said it was working on a new sanctions bill that would leverage its status as a major destination for Russian private money to exert political pressure on the Kremlin. It’s a step critics have long urged the UK to take. “This will be the toughest sanctions regime we have ever had against Russia,” UK Foreign Secretary Liz Truss said.
“It’s still like the weapon you have on the table – it’s in the room and gives you leverage without you using it,” said Alex Nice, a researcher at the Institute for Government, at the International Consortium of Investigative Journalists from the UK Perspective. authorities looking for Russian money. “In elite Russian financial circles, there is always this lingering concern about what the British authorities know and what they might do.”
For more than a decade, the ICIJ has tracked the flows of money around the world – stories that have typically involved wealthy Russians with political connections to the elite. These projects included the Panama Papers, the Paradise Papers, the FinCEN Files and the Pandora Papers.
Here are five oligarchs whose financial dealings have been uncovered by ICIJ investigations — and who have come under additional scrutiny from authorities.
Politically connected Uzbek-Russian billionaire
Usmanov has invested heavily for decades in tech companies in Russia and elsewhere while maintaining close ties to Russia’s political elite. Early in Facebook’s growth as a social media company, Kanton Services, a firm linked to Usmanov, linked Russian state money to the first major investments in Facebook, according to a report by 2017 which was part of the Paradise Papers. Leaked documents reviewed by the ICIJ indicate that all Kanton shares were owned as recently as 2009 by an investment manager known as Usmanov’s associate.
Rollo Head, a spokesperson for Usmanov, said Usmanov “has been a very successful investor in Russian and international assets using a combination of his own and borrowed funds.”
Usmanov avoided major rounds of sanctions against wealthy Russians. He was on a 2018 US Treasury Department list of Russian oligarchs. British MPs recently called for Usmanov to be sanctioned for Russian political aggression.
Russian billionaire and oil magnate known for his close relationship with Russian President Vladimir Putin
In 2010, Timchenko’s investment fund, Volga Resources, became a major shareholder in Novatek, one of Russia’s leading natural gas companies, extending Timchenko’s considerable sway over the oil and gas industry. Russian.
Pandora Papers reports from October 2021 reveal a series of massive loans in 2007 and 2008 between anonymous offshore shell companies and a Cyprus-registered Timchenko company. The Moscow Times reported that the company, called White Seal Holdings, had a hand in Timchenko’s Novatek investment.
Records show that a Cypriot front company called Vidrio Enterprises Limited lent $572 million to White Seal between 2007 and 2008. Some of the repayment dates were one year after the loans were made. In 2008, White Seal received an additional $150 million from another joint-stock Cypriot company called Bodela Holdings. It is unclear who ultimately owns Vidrio and Bodela Holdings, and Timchenko did not respond to questions about who owns the companies. In 2007, White Seal received a $320 million loan from a shell company called Lerma Trading SA, registered in Panama. Timchenko’s lawyers told the ICIJ that “our client’s unequivocal position is that he has always acted lawfully throughout his career and business dealings.”
In 2015, the US government sanctioned White Seal and Lerma Trading for “acting for or on behalf of” Timchenko. Timchenko was also a director of LTS Holding Limited and beneficial owner of Roxlane Corporate Limited, both registered in the British Virgin Islands.
Russian businessman, billionaire and former judo partner of Vladimir Putin
In 2013, one of Arkady Rotenberg’s companies received potentially lucrative government contracts to work on a $40 billion gas pipeline project between Russia and Europe. Around the same time, three anonymous companies made huge payments into the Putin network, records show. Two of the shadow companies, and likely all three, were controlled by Arkady Rotenberg, according to 2016 Panama Papers reports.
Loans from these Rotenberg companies totaling more than $231 million appear to have gone to a British Virgin Islands-based company called Sunbarn Limited, set up by a Bank Rossiya official, according to ICIJ reports; The loans had no repayment schedule.
When contacted by the ICIJ in 2016, Arkady Rotenberg did not respond to a request for comment.
The European Union and US government issued sanctions against Arkady Rotenberg in 2014, in retaliation for Putin’s annexation of Crimea. The United States also sanctioned his brother Boris.
A billionaire in the natural resources sector in Russia and a close ally of Vladimir Putin
Between 2013 and 2015, compliance officers at Bank of New York Mellon flagged 16 transactions as potentially suspicious. Each of these transactions involved Mallow Capital Corp., a company registered in the British Virgin Islands which operates as a subsidiary of Oleg Deripaska’s Basic Element Group. Mellon said Mallow Capital appeared to be a front company operating in a high-risk area with no known legitimate business purpose. In 2012 and 2013, Mallow sent nearly $420 million to each other using different addresses in the British Virgin Islands and different banks. Mallow also sent $20 million to another company of the same name, which listed an address in Cyprus. Bank of New York Mellon helped facilitate these transactions through a relationship with Moscow-based Bank Soyuz. Deripaska bought a majority stake in Bank Soyuz in 2010, according to Reuters.
Reports of suspicious activity by banks reflect the concerns of bank compliance officers and are not necessarily indicative of criminal behavior or other wrongdoing. Deripaska denied laundering funds or committing financial crimes.
Russian banker and longtime confidant of Vladimir Putin, whom US officials have called Putin’s “personal banker”
Kovalchuk co-owns a company, Ozon, which holds the title of what would be Vladimir Putin’s favorite ski resorts, according to a 2016 Panama Papers article. As of the end of 2009, Ozon received 11.3 million dollars in loans from a key offshore company in the Putin network, the Panama Papers show. The loans carried an interest rate of 1%, according to the report.
A loan of $5 million was revised and extended several times and was converted into Russian rubles; the exchange rate and further amendments reduced its value and ultimately the amount owed, the leaked documents show.
When contacted for comment in 2016, a lawyer for Kovalchuk said information about Bank Rossiya was available from public sources, adding: “We do not understand why your decision was to direct these questions to Mr. Yury Kovalchuk.”
At the time, Bank Rossiya did not respond to detailed questions about its role.
Kovalchuk has already been sanctioned by the United States, which called him a close adviser to Putin and his personal banker.