There’s a war raging in Europe: for the first time since 1968, a European country has been invaded. What consequences will this war have for Europe? Read more
There’s a war raging in Europe: for the first time since 1968, a European country has been invaded. What consequences will this war have for Europe?
In this dossier, we focus on how money flows to and from Russia. We analyse Europe’s role in the chess game of the Russian rulers and wealthy oligarchs.
Heineken is bawling, but the fact remains: it invested in cola and stout beer in Russia
European loans for Ukraine: utterly necessary, but a future burden
Heineken reneges on its promise and invests in Russia
Putin’s oligarchs the EU prefers not to punish
The EU and ‘partner’ Azerbaijan: gas first, morals second
Brussels wants to ban Russian lobbyists, but France is not cooperating
C-Corp: the one-stop-shop for Putin’s friends in tax haven the Netherlands
Villas, aeroplanes and yachts: 80 journalists hunting for the assets of Putin’s pals
Even the ‘useful idiots’ in the European Parliament are distancing themselves from Putin
Who is Jorrit Faassen, Putin’s Dutch son in law?
© Follow the Money
C-Corp: the one-stop-shop for Putin’s friends in tax haven the Netherlands
The Amsterdam-based trust office C-Corp is small and little-known, but serves the crème de la crème of the Russian business world. Among them are several billionaires, and Rostec, manufacturer of the BUK missile that shot down MH17. In the Netherlands, Rostec was involved in a joint venture with American company General Electric, according to research by Follow the Money.
Smiling broadly, Bauke van der Meer holds up two gold bars in front of the camera. The bars are engraved with the word ‘Russia’, in Cyrillic script. When someone on Facebook asks whether they aren’t just chocolate bars in gold packaging, Van der Meer writes, on February 20th, 2016: ‘Not chocolate but the real, pure stuff: they weigh almost 12 kilos each.’ Currently, the value of the gold bars would total 1.5 million dollars.
Van der Meer had every reason to laugh: his business was going well. He’d spent many years working at large Moscow accounting firms, and he knows the language, mores and customs. In 1997, he married Russian Nadezhda (Nadia) Laposova. In addition, he knows the tax advantages the Netherlands can offer foreign companies like the back of his hand.
Shortly after the turn of the century, he strikes out on his own with tax-legal consulting firm BVDM Law, and trust office C-Corp. With offices in Moscow and Amsterdam, it becomes an ideal one-stop shop for wealthy Russians. Van der Meer soon manages to attract the custom of the foremost Russian businesspeople.
The question is, what does the future hold for this previously successful niche firm? Finance Minister Sigrid Kaag is preparing legislation that prohibits providing trust services to Russians. ‘It’s going to be a tough time,’ a source familiar with the company predicts, on condition of anonymity.
For a company in the eye of the storm, C-Corp is remarkably silent on its website and social media. Not a word is uttered about Vladimir Putin’s invading Ukraine. Shortly after the invasion, C-Corp did however make some changes to its website.
For a long time, it contained copy such as ‘It is our mission to be the preferred supplier of trust- and corporate services for Russian and CIS-entrepreneurs looking to enter the Dutch market and to do business in the Netherlands.’ and ‘At the beginning of 2014 a political separation took place between Russia and basically the rest of the world, resulting in specific economic sanctions towards Russia by the EU and OFAC. Nevertheless, we strongly believe that good and sound business of Russian- and CIS-entrepreneurs should still get professional and reliable business support and high quality services from services providers in the Netherlands.’
But C-Corp’s sidekick knows what to do: BVDM Law, according to its website, offers ‘Advice on EU and OFAC sanctions against Russia’.
All references to Russia have now been wiped from the C-Corps website. The latest post on C-Corp’s Facebook page expresses best wishes for 2022. On February 2nd, 2022, C-Corp filed an annual statement of Emergofin, a company owned by oligarch Oleg Deripaska; it was the trust office's last known business activity.
A spokesperson for C-Corp and BVDM Law stated in an email response that the office is now also active in Eastern Europe and other CIS region countries. According to the email, C-Corp has always followed all rules, including the 2014 US and EU sanctions following Russia's annexation of Crimea.
Rostec and General Electric
C-Corp’s most notable customer is Rostec. This Russian state-owned company focuses on engines, aerospace, and defence, and is, among other things, the manufacturer of the BUK missile that shot down MH17. Rostec had four companies that were managed by C-Corp. Three of these were dissolved in 2016, the fourth not until 2019. Through this last company, ODK Gas Turbines BV, we discover a link between Rostec and the American industrial conglomerate General Electric (GE) for the construction of engines for gas turbines.
The American GE – the foundation of which was laid by Thomas Edison in 1876 – is one of the largest companies in the world. In 2021, GE had revenues of 74 billion dollars. Today, the company mainly focuses on electricity generation, aircraft engines, and medical equipment.
Rus Gas Turbines BV in Breda was founded in 2010 as a joint venture between GE, the Russian state-owned company Inter RAO, and Rostec. In 2019, Rostec sold its stake in the Dutch joint venture – 25 percent of shares – to Inter RAO.
This means that, through 2019, GE worked with a company on the US sanctions list
It’s remarkable that Rus Gas Turbines BV existed until as late as 2019, as Rostec and CEO Sergey Chemezov have been on the US sanctions list since April 2014, following the annexation of Crimea by Russia. Chemezov himself has also been on the EU sanctions list since September 2014.
This means that, through 2019, GE worked with a company on the US sanctions list. GE declines going into detail about this. ‘GE works closely with the proper authorities to ensure compliance with sanctions as well as all laws and regulations,’ says the company, in a statement to Follow the Money.
GE confirms that it is still working with Inter RAO to this day. This is allowed, according to their spokesperson: ‘We have suspended our operations in Russia, with the exception of providing essential medical equipment and supporting existing power services to people in the region.’
According to Cedric Ryngaert, professor of international law at Utrecht University, who specialises in sanctions, it’s true that joint ventures are not automatically prohibited, despite the sanctions. ‘As far as I can tell, the US imposed sanctions on Rostec’s CEO on April 28th, 2014. Sanctions against Rostec followed on September 12th, 2014. Those sanctions only relate to access to the US capital markets, more specifically the long-term financing of debt.’
‘That does not mean that joint ventures are prohibited,’ Ryngaert continues. Depending on the nature of the US sanctions, which come in all shapes and sizes, joint ventures can be problematic, but mostly with regard to working with Russian utility companies. ‘Particularly in the oil industry,’ says Ryngaert. ‘Exxon Mobil, for example, withdrew after that.’
It’s been known for a while that Renault collaborated with Rostec to manufacture Ladas. Lada was registered in the Netherlands, but in January of this year, the company moved, presumably because of the termination of the tax treaty between Russia and the Netherlands. According to the 2021 annual report, published in March this year, the Dutch BV has gone into liquidation.
C-Corp’s top client: Oleg Deripaska
Until November 2019, GE also had a joint venture in the Netherlands with aluminium producer Rusal, a major shareholder of which is billionaire Oleg Deripaska. This joint venture, GE Grid Solutions – Rusal BV, started as a collaboration between Rusal and the French company Alstom. C-Corp has been involved in the management of the BV since 2007. In 2015, GE acquired Alstom, which includes the joint venture with Deripaska's company.
Deripaska is C-Corp’s top client. Over the past fifteen years, C-Corp has managed fourteen different BVs for Deripaska. This mainly concerns SFIs: conduit BVs into which an investor puts funds, which they then use to buy shares in companies elsewhere in the world.
AGCO-RM (Manufacturing) Holding BV
In September of 2012, in the presence of Vladimir Putin, American company AGCO and Russian Machines (part of Oleg Deripaska’s GAZ Group) sign an agreement to establish a joint venture: AGCO-RM. The joint venture involves collaborating on the production of agricultural machinery. This BV has been managed by C-Corp since 2018.
Aktivium Holding BV
Deripaska transferred his equity interest in Nornickel to this company. On paper, Aktivium was the parent company of Deripaska’s EN+ Group. The EN+ Group is an investment company of Deripaska’s, with interests mainly in the electricity industry and aluminium production. In 2018, a year before the Aktivium Holding was deregistered, it still had three billion euros on the balance sheet. C-Corp has managed the BV since 2010.
Alstom Grid – Rusal BV (now: GE Grid Solutions – Rusal BV)
This BV is also a joint venture of Deripaska’s, this time with the French group Alstom. Alstom mainly focuses on the transport sector, Alstom Grid on electricity. In 2007, Alstom Grid formed a joint venture with UC Rusal, the aluminium company of Deripaska’s EN+ Group. Since 2015, Alstom has been owned by General Electric.
Construction Equipment Corporation BV
In 2012, American company Terex Corporation and Russian company GAZ Group formed a joint venture. Terex is a conglomerate of machine builders, GAZ Group is part of Basic Element, Deripaska’s business empire. They pour their joint venture into the Construction Equipment Corporation BV. It was managed by C-Corp from 2018, until the joint venture was deregistered in 2021.
The Ukrainian intelligence service suspects Emergofin of involvement in the ‘deliberate destruction’ of the Zaporizky Aluminium Plant (ZAlK), the only aluminium producer in Ukraine. Emergofin is a subsidiary of Deripaska’s business empire. ZAIK was deliberately brought to ruin in the interest of its Russian competitors, according to the Ukrainian government.
Mega Business & Alliances BV + Mega Business & Partners BV
These two private companies form the legal basis of Deripaska’s investments in the Kazakhstan railway industry. In 2011, Deripaska transferred two assets to Mega Business & Alliances: Ural Transport-Expedition Company LLC, a provider of transport services to the Russian railways, and Bogatyr LLC, the Kazakh counterpart of the Ural Transport-Expedition Company. In 2019, Deripaska and Samruk Energy joined forces. Samruk Energy is a Kazakh state-owned company, and took a 50 percent interest in both Mega Business BVs.
Veleron Holding BV
Just before the financial crisis of 2007, during which Deripaska lost a lot of wealth, the oligarch invested 1.2 billion US dollars in the Canadian company Magna, a car parts giant. For this investment he had a special company set up at C-Corp, Veleron Holding, which existed until the end of 2019.
Those SFIs then manage the shares, as Van der Meer testified in 2014 during a deposition in a lawsuit Deripaska brought against American bank Morgan Stanley. In that year, C-Corp had six employees and managed about eighty companies, Van der Meer further explained. He said he charged a fixed rate for the management of the BVs, plus 240 euros an hour for various activities, such as the drawing up of annual accounts.
Deripaska also had the embattled Emergofin handled by C-Corp. This BV is said to have been involved in the bankruptcy of the Zaporizky Aluminium Plant (ZAlK), the largest Ukrainian aluminium producer. ZAIK was stripped bare by Deripaska and his business partners, who allegedly moved equipment from Ukraine to Russia, and the company ended up on the brink of bankruptcy, according to Ukrainian authorities. The company was subsequently taken over by the Ukrainian state. Emergofin has an arbitration case pending against Ukraine about this.
In addition to Deripaska, oligarch Alisher Usmanov of Internet company Mail.ru is a client. Gazprombank, put on a sanctions list by the US in 2014, has C-Corp manage the OMZ BV in the Netherlands.
C-Corp’s relations with Russia appeared to cool somewhat after 2014, due to the downing of scheduled flight MH17 by separatists in Eastern Ukraine and the annexation of Crimea by Russia. But even after this, Van der Meer’s C-Corp and BVDM Law continued to do plenty of business with Russian companies and oligarchs. In April or May of 2016, Van der Meer opened a new office in Moscow.
By specialising in Russia, C-Corp can serve clients better than large trust companies like TMF and Intertrust, a source familiar with C-Corp told Follow the Money. ‘Offices such as TMF and Intertrust don’t always have the resources to help Russian clients. In addition, Russia has a high risk profile, so you need people in both the Netherlands and Russia who know what is and isn’t possible. C-Corp has these people.’
C-Corp, according to this source, has always complied with all the requirements of regulator De Nederlandsche Bank, and therefore dares to take on PEPs (politically exposed persons) as clients, who might scare off other trust offices.
Van der Meer flew back and forth between Schiphol and Moscow on a weekly basis, he told Rodrigo Fernandez, researcher at the Research Foundation for Multinational Enterprises (SOMO) at the beginning of 2017. Fernandez specialises in tax avoidance and tax havens. The two met at an event about offshore finance at the Amsterdam academic-cultural centre Spui25.
‘He stood out,’ Fernandez says. ‘He told me that he lived in Amstelveen. I asked him why not something nicer and more central in Amsterdam. He found Amstelveen to be more convenient: it was closer to Schiphol.’
Trans-Balkan Pipeline BV
The Trans-Balkan Pipeline is an international project in which Russia, Bulgaria, and Greece are closely involved. This pipeline owes its existence to the desire of Russia and various Balkan countries to have a reliable flow of Russian oil to Greece, Bulgaria, and North Macedonia, among others. 51 percent of this project is owned by Pipeline Consortium ‘Burgas Alexandroupolis’ Limited, a joint venture of three Russian state-owned oil companies: Rosneft, Transneft and Gazprom Neft. Their majority stake was held under Trans-Balkan Pipeline BV, which existed until June 2019.
In 2019, the then president of Ukraine, Petro Poroshenko, quietly signed a decree for the construction of two nuclear reactors. The costs: 2.5 billion dollars. Construction is being carried out by Skoda JS, which on the surface appears to be a Czech company that builds this type of reactor. However, Skoda JS is 100 percent owned by OMZ BV, which is itself a subsidiary of OAO OMZ, a full subsidiary of Gazprombank. On paper, C-Corp resigned as manager of OMZ BV in December of 2021, but it was replaced by Paul van der Pol. Van der Pol is a former employee of C-Corp/BVDM.
C-Corp controlled four of Mail.ru’s companies, one of the largest Internet companies in the Russian Federation. For example, it owns 100 percent of VKontakte, the Russian Facebook. Mail.ru has several Dutch entities, of which Mail.ru Holdings BV, Mail.ru Internet NV, Mail.ru Aggregates BV and Mail.ru Foreign Holdings BV were represented by C-Corp in the role of manager and/or authorised representative. C-Corp managed Mail.ru Aggregates BV until 2015; Mail.ru’s other three letterbox firms were deregistered in 2018 and 2019.
NTV-HTB Holding and Finance BV
Besides OMZ, C-Corp managed another of Gazprombank’s entities: NTV-HTB Holding and Finance BV. NTV is a Moscow-based TV channel, owned by the state (through parent company Gazprom Media). In addition to C-Corp, one Tamara Gavrilova was brought in as manager; Gavrilova is a college acquaintance and former colleague of Putin. They went to law school together, and Gavrilova was an assistant to Putin when he worked in St. Petersburg in the early 1990s. NTV was first owned by pro-Yeltsin oligarch Vladimir Gusinsky, but when the station became too critical of Putin’s regime, Gusinsky was forced to hand over NTV to Gazprom, under threat of jail time. After Gavrilova took office as manager of NTV, one critical program after another was taken off the air.
This event at Spui25 was likely one of Van der Meer’s last. He was a fanatic cyclist, who also liked to climb in the saddle outside of the Netherlands. In 2017, this hobby led to his death: he was hit by a truck while cycling near Barcelona. C-Corp is now owned by Van der Meer’s widow Nadia.
The founder, therefore, will not have to experience the rough times ahead for C-Corp. Many clients, such as the aforementioned oligarchs Deripaska, Usmanov and Chemezov, have since been sanctioned by the European Union. Companies like C-Corp are expected to enforce these sanctions. For example, if the letterbox firms receive dividends, C-Corp must ensure that they are not forwarded to another entity, if there is a possibility that a sanctioned individual might access them.
We need not worry, the company’s spokesperson assures Follow the Money in a written response: ‘C-Corp BV is a fully licensed trust office under the supervision of De Nederlandse Bank. As such, C-Corp BV is a member of Holland Quaestor, the trade association of Dutch trust and corporate services providers. We are in close contact with De Nederlandse bank and the Ministry of Finance.’
‘BVDM Tax and Legal Services is not a trust office, but provides services that make it subject to the Wwft,’ the spokesperson goes on to explain. ‘Moreover, it follows the same strict compliance rules as C-Corp BV, which falls under the WTT. C-Corp BV and BVDM are extremely familiar with the EU and OFAC sanctions against the Russian Federation. The Sanctions Act is complied with at all times by C-Corp BV and BVDM, within the letter and spirit of the law.’
Translation: Chris Kok
N.B.: A remark about Dimitry Avdeev was removed on April 25th, 17:30. it was incorrect.