Who is taking the Russian sanctions lightly?

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The hunt for Russian wealth continues. The US and EU sanctioned more than 1,000 Russian passport holders by blocking their personal belongings. This includes real assets such as bank accounts, ships, real estate, pictures, shares in companies, shares in funds.

The target is oligarchs close to Vladimir Putin or the defense industry. To trace their presence, the G7 countries formed the “Russian Elites, Proxies and Oligarchs” (Repo) task force. This reported that to date, assets worth $58 billion in volume have been blocked worldwide. About half of them come from EU countries. The EU set up its own task force to track down oligarch funds as well. According to its own statements, this EU task force has so far blocked 23 billion euros in assets. In addition, about 300 billion euros in the foreign exchange reserves of the Russian central bank were blocked.

However, it is still unclear exactly where these funds are located, so the number should be approached with caution. France alone reported freezing 22 billion euros in Russian central bank funds. Switzerland has been criticized by the G7 countries for not doing enough to enforce the sanctions. But how do other financial centers charge? In the following overview, it should be noted that most of the information is contained in the aggregated information of the various working groups.

The Bankers Association estimates that Russian owners’ assets are roughly CHF 150 to 200 billion, most of which are unaffected by the sanctions. Currently, 7.5 billion francs and 15 villas are frozen in Germany. Another 2.2 billion people have been blocked and are under investigation.

When sanctions are applied, only accounts of CHF 100,000 or more are affected. Funds from dual citizens, i.e. Switzerland-Russia, are not recorded. Recently, UBS and CS tightened their precautionary measures around Russian funds for fear of US sanctions.

The most sanctioned person is Viktor Vekselberg, who has been on the US list since 2018. He has stakes in Sulzer and OC Oerlikon, but has not had access to Swiss accounts for years, and dividends from holdings are also paid into a blocked account.

Moscow-based Gazprombank Switzerland, a subsidiary of the sanctioned Russian state bank Rossiya, is being liquidated. The bank was known for being believed to have transferred assets from Putin and his friends, although there were indications that the source of the funds was questionable. Following the release of the Panama Papers, Finma took action and temporarily banned the bank from accepting new private clients. Last month, the district court in Zurich convicted four top bankers of violating their duty of care. Headquartered in Moscow, Gazprombank only has branches in Luxembourg, Belarus and Cyprus after leaving Zurich.

For decades, the EU country has been a hotspot for Russian millionaires who run real estate and (mailbox) companies on the Mediterranean island. The country is interesting because when you buy real estate or start a company, you are guaranteed a passport – and thus entry into the EU.

Cyprus is reluctant to freeze assets. The government only announced in January 2023 that it would seek funding from sanctioned oligarchs. Recently, 1.5 billion euros were said to have been blocked, of which 100 million were in the bank accounts of sanctioned Russians; A large part of the total amount is invested in investment companies. According to Finance Minister Constantinos Petrides, the financial center has had to accept a large outflow of money from Russia in recent years. Currently there is still a billion in Cypriot banks, it was 10 times more than before the 2009 financial crisis.

Under pressure from the EU, Cyprus announced that it will take a closer look at the cases of Maltese-Russian dual nationals who bought a “golden passport” in March. The US and EU are targeting the fortunes of oligarchs Alisher Usmanov and Roman Abramovich, both close associates of Putin. “We have taken measures to keep Cyprus as a reliable economic hub,” a Cypriot government spokesman said.

But Cyprus was late: Usmanov was already sanctioned by the EU and Switzerland last year.

Like Cyprus, Malta is seen as a preferred destination, and like Cyprus, passports are sold to Russians in Malta. Malta has yet to impose any sanctions. Malta’s statement: They have helped other EU countries block yachts registered in Malta. In January 2023, the government announced the freezing of the equivalent of 210,000 francs.

The Bahamas financial center banned financial transactions with sanctioned Russians in March 2022. The central bank in Nassau estimates Russian citizens’ assets at the equivalent of 2.9 billion Swiss francs. Other countries in the Caribbean do not participate in the freeze, as most account holders are dual citizens who have obtained passports through investment programs.

The EU country, according to its own statements, has so far blocked 2.1 billion euros.

At the end of 2022, the Ministry of Finance reported that 5.3 billion euros were blocked in Russian funds. Gazprombank, which also conducts private banking with Russian citizens, continues its activities in Luxembourg.

The United Arab Emirates, with its financial centers Abu Dhabi and Dubai, has been invaded by wealthy Russians since the Ukraine attack, as they have nothing to fear in the Gulf. This also applies to superyachts and private jets. Laissez-faire has a political background: The Emirate is considerate of Putin because Russia plays an important role in Syria and Iran. In October, Khalifa bin Zayed Al Nahyan visited Putin. The United Arab Emirates is also an “important strategic partner” for the United States, writes the consulting institute Soufan Center.

Freedom has consequences. According to the Dubai Land Department, demand for real estate has doubled in 2022 and prices have skyrocketed accordingly.

Abu Dhabi recently announced that it will immediately halt Russian investments, as the EU and the US are still putting pressure on them. In addition, the license of MTS Bank, which has been sanctioned, will be revoked. It belongs to the oligarch Vladmir Yevtuschnekov, who has long been sanctioned by the West. Even Yevgeny Prigozhin, head of the Wagner Group, is admired. Because he and his mercenary unit in Sudan and Mali are engaged in the gold trade, which is bought and sold through the United Arab Emirates.

Many Russian citizens also bought Montenegrin passports for investments. It is said that almost half of real estate purchases in 2022 are made by Russians. The country hesitates to impose sanctions. All that is known is that the government blocked the properties of two Russian billionaires.

It is unknown how many assets the US has frozen. The Treasury Department recently reported that $1 billion in properties were blocked in Delaware shell companies.

In addition to 14 people from the defense industry, the USA imposed sanctions on around 300 politicians. Central bank governor Elvira Nabiullina is also on the list. There’s also Viktor Vekselberg in sight. His yacht Tango was arrested in Spain, and since the beginning of the year the Ministry of Justice has been trying to confiscate his six properties.

In March 2022, the Financial Markets Authority banned doing business with four Russian banks. Various oligarchs have moved their funds to the city-state in the past, including Herman Gref, the US-sanctioned head of Russia’s largest bank Sberbank. He is said to have set up a family trust linked to offshore companies, of which 75 million are said to be hiding in the British Virgin Islands, according to the Panama Papers. He later transferred the fortune to his nephew, Oskar Gref.

Former royal colony rejects Western sanctions. John Lee, Chief Executive of the Chinese economic metropolis, has been sanctioned by the United States since 2020 for human rights violations related to the defeat of the democracy movement.

“We’re just laughing at the so-called sanctions,” Lee said recently. The trigger was the mooring of the superyacht Nord, owned by sanctioned steel billionaire Alexey Mordashov. The US demanded the confiscation of the yacht and threatened countermeasures. Lee refused and counts on China’s support.

So far, the EU country has frozen assets equivalent to CHF 3.4 billion.

“The UK has helped freeze £48bn of Russian assets,” the government in London said in March. But it has only frozen 20.4 billion so far, that’s three times more than Switzerland.

In recent years, many Russian oligarchs have found a second home in London (“Londongrad”). After Putin’s invasion, the government stopped selling “golden visas” to wealthy Russians.

According to Transparency International, 700 Russian citizens have been granted the right to reside on the island thanks to real estate purchases in recent years. A total of 48 Russians with close ties to the Kremlin are said to have invested about 2 billion in the real estate sector. According to Transparency International, arrests are difficult as overseas structures are involved.

The country has frozen 90 million Swiss francs so far.

The principality is an important financial center, appreciated by Roman Abramovich. Investigations are ongoing into offshore constructions set up by Barclays’ Monaco branch shortly before it was placed on the EU sanctions list, according to media reports. It is unknown how much money was blocked.

The French blocked 1.2 billion francs and two dozen villas until the end of March.

Source :Blick