Mark Hollingsworth

How Russia’s oligarchs are evading sanctions

A summit at the Kremin (photo: Getty)

On 25 February 2022, the day after Russia invaded Ukraine, a select group of oligarchs attended a private meeting with President Putin in the Kremlin’s St. Catherine’s Hall. It was ostensibly to discuss how the government would assist state-owned Russian banks who were about to be sanctioned by the USA, notably Sberbank and VTB Group. The deputy prime minister Andrey Belousov asked the oligarchs and corporate titans to keep working with sanctioned banks. He said that confidence in the banks was crucial for a country where historically financial chaos has destroyed savings and people’s livelihoods.

Among those present was a Russian billionaire called Dmitry Mazepin, best known in the UK for sponsoring the Formula One Haas team of which his son Nikita was a star driver. Mazepin sat among other powerful wealthy billionaires, notably Gazprom’s Alexey Miller, and Rosneft’s Igor Sechin. And he soon realised that it was not just the banks who would be sanctioned. The oligarchs would be next. And he was right. Two weeks later, on 9 March, Mazepin was sanctioned by the EU and soon his assets were frozen by the UK, Canada and Switzerland.

The sanctioning of Putin’s Kleptocrats who have funded his war machine is well documented. But what is less well known are their secretive steps to circumvent the sanctions by concealing and transferring the ownership of their companies to close relatives and business associates and hence sidestepping the impact of the asset freezes. And the regulators appear to have missed that they are adept at exploiting legal loopholes.

These oligarchs have not broken any laws, but transferring ownership to a close relative runs perilously close to the legal edge of the cliff

Just days after being sanctioned, Mazepin sold his controlling stake in his giant fertiliser company Uralchem and transferred ownership to his longtime associates and fellow directors, Dmitry Tatyanin and Dmitry Konyaev.

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Written by
Mark Hollingsworth

Mark Hollingsworth is the author of ‘Londongrad – From Russia with Cash’. His new book, ‘Agents of Influence – How the KGB Subverted Western Democracies’, will be published by Oneworld this April.

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