The largest Russian oligarchs continue to earn money from business with the EU
Category
Economics
Publication date

The largest Russian oligarchs continue to earn money from business with the EU

Oleg Deripaska
Source:  The Insider

Despite sanctions, Russian oligarchs continue to earn billions from trade with the European Union, using loopholes to circumvent restrictions.

Points of attention

  • The largest Russian oligarchs are profiting significantly from trade with the EU, despite facing sanctions.
  • Oligarchs like Alisher Usmanov and Roman Abramovich are successfully evading restrictions and increasing their fortunes through clever tactics.
  • Many oligarchs transfer company shares to relatives or front persons to avoid sanctions, enabling them to continue trading with the EU.
  • Key players such as Rusal, Metalloinvest, Phosagro, and Eurochem are among the companies actively involved in these controversial practices.
  • The situation sheds light on the inefficiencies of sanctions and the complex strategies employed by Russian oligarchs to maintain their business ties with the EU.

How Russian oligarchs continue to profit from trade with the EU, bypassing sanctions

According to the publication's journalists, sanctions against Russian oligarchs close to Kremlin dictator Vladimir Putin do not apply to their companies if the oligarchs' share of shares in these companies does not exceed 50%.

Thus, most Russian oligarchs simply transfer some of the shares of their own companies to close relatives or front persons with the right of subsequent redemption.

Which companies of Russian oligarchs continue to profit from trade with the EU?

In particular, such actions were taken by the owner of the aluminum corporation Rusal, oligarch Oleg Deripaska, who is also the owner of a private military company participating in the criminal war unleashed by Russia against Ukraine.

Since Russia launched its criminal war against Ukraine in 2022, Deripaska's fortune has increased more than one and a half times to $2.8 billion.

The second key shareholder of Rusal, Viktor Vekselberg, is not under sanctions at all, although he regularly meets with Putin, and his companies produce missiles with which the Russian occupation army then attacks Ukraine.

Alisher Usmanov registered his company's shares in the name of nominees with the right to repurchase, reducing his own stake in USM to 49% and avoiding personal sanctions.

Key Russian oligarchs continue to earn billions from trade with the EU, bypassing sanctions
Putin during a meeting with Alisher Usmanov

USM includes Metaloinvest, the largest iron ore company in the Russian Federation, which exports its products to European countries.

Usmanov's partner in Metaloinvest, State Duma deputy from United Russia Andrey Skoch, is also under sanctions, and the business is registered in the name of his father Vladimir and daughter Varvara.

As of February 24, 2022, the fortunes of Usmanov and the Skocha family have increased to $13.4 billion and $6.7 billion, respectively.

Over the past 2 years, these oligarchs have become richer by $4 billion.

United Russia member Andrey Guryev and his partner Vladimir Litvinenko also continue to earn money from trade with the EU.

The Guriev family owns 48.5% of the largest producer of phosphate fertilizers in the Russian Federation, Phosagro.

Litvinenko transferred more than 20% of Phosagro shares to his wife Tatyana in 2022, allowing the company to freely export products to Europe. His fortune has doubled since 2022, to $3 billion.

Andriy Melnychenko also supplies fertilizers to Europe through his company Eurochem, but to do so he reduced his stake in the company.

The products of the large metallurgical and mining company "Evraz", owned by Roman Abramovich, also continue to supply its products to countries such as France and the Czech Republic.

In addition, he is a minority shareholder of the company "Norilsk Nickel", which not only exports its products, but also owns production in Europe.

Gennady Timchenko, who is called Putin's "wallet", owns shares in Novatek — 23.49% and Sibur — 17%.

The main owner of the companies, Leonid Mikhelson, is not subject to EU sanctions, therefore the restrictions do not apply to these companies.

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