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?
© OCCRP / Follow the Money
Villas, aeroplanes and yachts: 80 journalists hunting for the assets of Putin’s pals
In collaboration with colleagues from all over Europe, Follow the Money is launching the Russian Asset Tracker. The Tracker will provide a running overview of real estate, aircraft, yachts and offshore accounts of sanctioned and/or corrupt oligarchs. The search has only just started, but we have already identified 153 assets with a combined value of 16 billion euros that are wholly or partly owned by oligarchs and close relations of Putin.
With piercing eyes, he looks around the Albert Heijn To Go at Amsterdam Zuid station. When the small, somewhat chubby man walks out with a bag of groceries, in the direction of office building The Rock, someone notices he is accompanied by an entourage of several men, who follow close behind. The inconspicuous man with the beady eyes is one of the richest men in the world: Russian Mikhail Fridman. Among his many assets is Pyaterochka, an Albert Heijn To Go-like chain in Russia, which may explain his interest.
Pyaterochka is part of the X5 Group, the head office of which is located at the Zuidas. As is the headquarters of VEON, formerly Vimpelcom, a telecom company with 200 million connections in Ukraine, Russia, Uzbekistan, Pakistan and Bangladesh, and also largely owned by Fridman. Usually, the billionaire leaves operations to his vassals, but now and then he’ll visit Amsterdam himself. When he does, he rides in a car with tinted windows from Schiphol-East, where the private jets land, to the Zuidas.
‘At first you think: “Is that him?”’ says an accountant who once met him at the Zuidas. ‘But you soon notice that he is both intelligent and crafty, the perfect combination for a big entrepreneur. I heard about another time he was in the building. He and a few other billionaires had attended the opening of a terminal on the Maasvlakte.’
Fridman’s extreme wealth is no secret. But while oligarchs like him flaunt their yachts and planes, and girlfriends dressed in Versace, large chunks of their wealth are hard to trace. In recent decades, assisted by an army of lawyers, notaries, bankers, tax specialists and family members, they have created an administrative smoke screen. How does one blow it away?
The OCCRP and the Russian Asset Tracker
To accomplish this, the Organized Crime and Corruption Reporting Project (OCCRP), a consortium of journalists from Eastern and Central Europe, Central Asia and Central America, has launched an international search for the assets of Russians who are on sanctions lists, or were designated as corrupt by Alexej Navalny's anti-corruption organization.
This way, we have identified assets worth 16 billion euros that are in the hands of Putin’s pals. Ownership of these assets has been checked and double-checked. For the purposes of this project, Follow the Money exchanges information with some 80 journalists – from, amongst others, Austria, Belgium, Cyprus, Germany, France, Lithuania, Luxembourg, Switzerland and the United Kingdom – in order to map the assets of these oligarchs across national borders. The progress of our joint research is charted in the Russian Asset Tracker.
Tracking those assets is a daunting task. This is why we are not immediately examining all sanctioned oligarchs, but are starting with a subset: the so-called Navalny 35 list. This list was put together by Alexei Navalny, the best-known critic of corruption in Russia, and his collaborators. The 33 men and 2 women on this list, according to Navalny, are Putin’s confidants: people who financially support his regime, or were involved in Navalny’s poisoning and subsequent arrest.
Navalny’s list includes some well-known oligarchs who are also on recent sanctions lists, including Roman Abramovich, Gennady Timchenko, Oleg Deripaska and Alisher Usmanov. But his list also includes CEOs of state-owned companies such as Alexei Miller (Gazprom) and Igor Sechin (Rosneft), former chief prosecutor Yuri Chaika, Moscow mayor Sergei Sobyanin and a range of politicians and police officials. The sole women are judge Elena Morozova, and Margarita Simonyan, editor-in-chief of the international television network Russia Today.
45 apartments in London and Paris
Roman Abramovich, the best-known oligarch on Navalny’s list, owns at least 45 apartments in London and Paris (total value: about 80 million euros), an estate on the French Riviera (value 80 million), another estate in Saint Tropez (value: unknown), and at least 18 office buildings (27 million euros). Through his daughter he owns a huge house at Lake Fuschi in Austria (13.8 million). He owns at least two aeroplanes (worth more than 40 million euros) and two helicopters (value unknown). Apart from that, he has some 800 million euros in a trust fund, more than 2 billion in soccer club Chelsea and at least 3 billion in coal and steel company Evraz.
Oleg Deripaska owns villas and expensive apartments in New York (one worth 38.42 million and one worth 10 million), London (58,76 million euros), Cyprus (just under 600.000 euros), Parijs (11.75 milion) and in Montenegro (28 million). He has companies in Vienna and London (his shares in those is worth at least 4 billion), and owns three mega yachts through a holding company in Cyprus (value unknown). Deripaska also owns land in London and Cyprus (totalling about 9 million) and a ski resort in Austria, worth about 2.7 million euros.
Igor Shuvalov owns at least two planes, a Gulfstream private jet (60 million euros) and a Bombardier (worth unknown), both of which are registered to a Luxembourg company. In addition, Shuvalov has a luxurious apartment near Westminster, London's governmental hub (17.45 million), a villa in Dubai (7.23 million) and one in Tuscany, (15 million) plus a castle near Salzburg (more than 9 million).
Those are merely the properties, planes, companies and yachts that the consortium of journalists can prove are owned by one of these oligarchs. It’s becoming clear that this is the tip of the iceberg. The consortium is still searching for hard evidence concerning several hundred potential assets. We’ll be adding more assets in the coming months. If you have any tips, you can share them here.
And which assets do we find in the Netherlands? At first glance, their assets in our country are a lot less sexy. So far, we have yet to uncover any colossal villas or estates here, owned by anyone on Navalny's list. Although their superyachts are often built in the Netherlands, they are not registered here. What we did find were valuable private planes and helicopters, owned by, among others, Roman Abramovich, but they are in Aruba, an independent country within our kingdom.
Nevertheless, the Netherlands plays an important role in the search for Russian assets: compared to other European countries, a lot of money is held in companies here. How many companies have we found, and how much money is each oligarch hiding?
Please note: the value in Dutch companies is an approximation!
The Netherlands is known for its large number of letterbox companies: companies that are registered here on paper, but are solely intended to avoid tax elsewhere. A letterbox company is often managed by a trust office and does not have a staff, office, or activities of its own. Dividens are usually funneled into tax havens such as Cyprus, Luxembourg or the British Virgin Islands.
Nearly half of the 35 people on Navalny’s list, sixteen in total, appear to be linked to private limited companies registered in the Netherlands. Together, these companies account for over 45 billion euros. The problem is: the structures chosen for these companies are often too complex to establish exactly how big a share is in the oligarch’s hands.
Take Andrey Kostin, for instance. He owns several Dutch limited companies, but his name cannot be found on any deeds. As this network of some of his companies shows, his Dutch holdings are indirect.
We also find these indirect ownership models with other oligarchs. Together, business billionaires Mikhail Fridman and Pjotr Aven - the latter is a good friend of Putin’s - own retail chain Holland & Barrett, active in 19 countries, through LetterOne, a Luxembourg-based investment company. In the Netherlands alone, the company possesses almost 200 million euros. But how much of that actually ends up in Fridman and Aven’s pockets?
In the Netherlands, there are many Russian-owned holding companies with assets inside and outside Russia, which are usually easily found in the Trade Register.
But not all limited companies show up in the Trade Register by default. By scouring foreign annual reports, and with the help of our European colleagues, we found new companies, such as ECS Holdings Europe bv. According to data from the Luxembourg trade register, Evraz, the coal and steel company, owns 65 percent of ECS. Roman Abramovich, in turn, owns 28.64 percent of Evraz.
This youthful-looking man in his fifties is the most famous oligarch on the Navalny 35 list and the owner of Chelsea football club. Thirty Abramovich companies were found in the British Virgin Islands, and thirteen were found in Cyprus, wealthy Russians’ favorite business hub.
Along with Deripaska, Abramovich is a shareholder in the large nickel processor Norilsk Nickel, which again has a separate holding company in the Netherlands. Among the billionaire’s other Dutch assets, presumably, is football club Vitesse. The question, again, is: which assets should the sanctions target?
On Aruba, we find a Boeing 787-Dreamliner (value: 300 million euros), and two helicopters, each worth several million euros. Both are often ascribed to Abromovich in the media, but the OCCR fact checkers stipulate that more evidence is necessary. It is, however, no coincidence that these are registered on the Caribbean island: in Aruba, planes and helicopters are exempt from tax and import duties.
Incidentally, EU economic sanctions do not automatically apply to overseas parts of the Kingdom of the Netherlands, such as Aruba or Sint Maarten, where Abramovich’s yacht Eclipse is (or was) docked. ‘In those parts of the Kingdom, sanctions must first be integrated into national law before they can be applied,’ according to international law professor Cedric Ryngaert of Utrecht University; he is a specialist in the field of sanctions. ‘This can be done quickly. Sint Maarten, for example, integrated these sanctions ten days after the EU imposed them in 2014, due to the Russian annexation of Crimea.’
‘Russian? What gave you that idea?’
The flamboyant Abramovich, who, according to a former banker at the Zuidas, is adorned with piercings and usually dressed in expensive but tattered jeans, is comparatively easy prey. Alisher Usmanov’s assets, on the other hand, are more difficult to untangle.
‘Russian? What gave you that idea?’ An employee of a small trust office serving as co-director of the Netherlands-based DST EuroAsia bv sounds surprised. ‘DST is an American company.’
For years, the company was run by Russian billionaire Usmanov, who is notorious for his close ties to Vladimir Putin and the FSB security agency. According to the EU, Usmanov actively supported the Russian government in its efforts to destabilize Ukraine, through the Kommersant newspaper. There’s a good reason he was put on sanctions lists by the EU, the United Kingdom, Japan, the United States, as well as Switzerland.
Usmanov, like many other Russian oligarchs, is known for having stashed much of his wealth abroad. He owns a yacht – ‘Dilbar’, named after his mother – which is worth 540 million euros. He owns at least one aircraft, which is worth more than 300 million euros, and a helicopter (15 million). He owns land and properties in Croatia (more than 6 million), Spain (20 million) and Latvia (5.5 million), often through relatives, and at least six homes in the UK, including one worth over 28 million in London, which is in his cousin’s name.
The billionaire is believed to be using his sister to hide his assets. This 56-year-old obstetrician, who lives in Uzbek capital Tashkent, keeps billions in Swiss bank accounts.
Additionally, Usmanov is a successful investor. He owns 49 percent of shares in USM Holding Company, which controls a number of large companies, such as Metalloinvest, Russia's largest iron producer, and telecom company MegaFon. He is also a major investor in Uber, JD.com, and other internet companies.
In the years following its founding in 2009, investment company DST was discredited several times, due to its investing money from state-owned companies such as VTB bank and Gazprom in Twitter and Facebook. Usmanov held on to part of his shares through Mail.ru: DST’s former parent company, and also the founder of VKontakte, Russian counterpart of Facebook. Mail.ru has stashed billions in the Netherlands.
In 2012, shortly after those scandals, Moscow-born founder Yuri Milner decided to focus solely on DST and split the company from Mail.ru. Its headquarters moved to China and ties with the Kremlin became a thing of the past. Speaking to Follow the Money, Leonid Solovyev, DST’s California-based Director General of Advisory Company, confirmed this: ‘DST no longer has anything to do with Mail.ru or Usmanov.’
However, when pressed, Solovyev acknowledges the fact that Usmanov still has money in one of DST’s investment funds. The Dutch branch of DST, which falls under the Cayman Islands-based DST Global V.I.p., appears to have been founded by Elena Azarenko: a secretary employed by Mail.ru. The day after Follow the Money approaches her on Linkedin with questions, her profile suddenly disappears.
Azarenko is also said to have a Usmanov bank account in her name, but, in an email to the OCCRP, she denies this.
Follow the Money and the consortium of journalists are constantly being confronted with these kinds of denials, as soon as we ask the oligarchs for clarification. So, while it’s important to keep looking, we also need to obtain information from people who are knowledgeable about the legal and tax structures that are used to hide the assets. If you have any information that may be of interest to Follow the Money, or to one of the affiliated media of the consortium, please send us your tips.
Karin Spaink 5Colm O'Flynn
Colm O'FlynnKarin Spaink