How EU Sanctions Shook Russian Oligarch Alisher Usmanov’s Empire

Russian Oligarch Alisher Usmanov well-known for his strong links to President Vladimir Putin, witnessed severe changes as a result of Russia’s invasion of Ukraine in February of 2022. The European Union (EU) instantly added Usmanov to its list of those subject to penalties, which resulted in several court challenges that have kept him in the public eye.

Key Points

• German prosecutors are investigating money laundering allegations against Russian oligarch Alisher Usmanov, focusing on 88 transactions to German accounts between 2017 and 2022.
• Prosecutors provided a printout of an English movie by Alexei Navalny, claiming Usmanov’s involvement in Russian tax evasion.
• German courts found no evidence of Russian law violations or links between the alleged tax avoidance and the transfers.
• Usmanov’s German lawyers expressed satisfaction, stating the dispute is nearly resolved.
• Despite setbacks, German authorities continue investigating Usmanov’s assets, seizing luxury cars from his properties.

Money Laundering Allegations on Russian Oligarch Alisher Usmanov

Prosecutors in Germany have been looking into allegations of money laundering against Usmanov, with the primary emphasis of their investigation being on 88 money transactions made to German accounts that he controlled between 2017 and 2022. To provide evidence supporting their stance, they supplied a printout of an English version of a movie produced by Alexei Navalny, the head of the Russian opposition, who claimed that Usmanov was involved in tax evasion in Russia.

Despite this, German courts have not been persuaded by the evidence offered up to this point. There was no obvious indication of any infractions of Russian law, nor was there a direct connection between the alleged tax avoidance and the transfers to Germany throughout their investigation. Lawyers for Usmanov in Germany have expressed their contentment with this conclusion, stating that they consider the dispute to be almost resolved.

88 Money Transactions to German Accounts: Details

German officials searched UBS bank locations in Frankfurt and Munich as part of an investigation into Russian oligarch Alisher Usmanov‘s potential money laundering. The alleged money laundering, estimated to be in the millions of euros, was the focus of the searches. The probe focused on banks with accounts linked to Usmanov, who refuted the claims through a spokeswoman, claiming he was a law-abiding Russian taxpayer.

UBS stated that its branches were searched and cooperated with authorities. The probe was not focused on the banking institution or its personnel but was part of a bigger investigation that included inspections of Usmanov’s home and yacht. German authorities had previously searched a luxury motor yacht in northern Germany in connection with Usmanov’s money-laundering claims.

Seized Assets and ‘Political Theater’

Despite setbacks in the money laundering case, German authorities have continued their investigations into Usmanov’s assets. In October 2023, searches were conducted at his properties on Lake Tegernsee, which led to the confiscation of expensive cars allegedly used by the oligarch. The Central Office for the Enforcement of Sanctions (ZfS) initiated these actions based on information suggesting that the vehicles were subject to EU sanctions and could be sold.

However, critics like Frank Buckenhof, an analyst from the German Trade Union of the Police, have dismissed these operations as a mere show for the oligarchs and political theater. He argues that the German authorities are simply trying to appease public opinion by demonstrating efforts against oligarchs after years of neglect. Buckenhof also questions the legal capabilities of the ZfS, which lacks the powers of a law enforcement agency.

Ownership Puzzle and Tax Evasion

German prosecutors faced difficulties identifying the rightful owner of assets linked to Usmanov. These assets, like the Dilbar yacht and Lake Tegernsee properties, were often registered through trusts and offshore firms, obscuring their ultimate owner.

Before the EU Sanctions were imposed, Usmanov withdrew from his trust containing sanctioned assets in February 2022. The trust was then transferred to his sister, Gulbakhor Ismailova, who was later subject to sanctions. The present beneficiary of the assets is unknown because Usmanov’s lawyers have not disclosed this information.

Establishing Usmanov’s ownership of the Lake Tegernsee villa is crucial for two other cases against him involving tax evasion and breaches of EU sanctions. Prosecutors must show that Usmanov is the villa’s rightful owner to establish his tax obligations in Germany. If unsuccessful, they must prove that they spent more than 182 days annually in the country to establish tax residency.

Violations of Sanctions Legislation

Prosecutors claim that Alisher Usmanov violated sanctions by utilizing a security firm to protect his Bavarian properties, thereby accessing frozen assets. However, they face the challenge of demonstrating that the funds used to pay the security company are indeed Usmanov’s. Authorities are investigating asset transfers from trusts to his sister and subsequently to unidentified third parties, which may raise inquiries regarding gift tax payments.

Conclusion

Russian Oligarch Alisher Usmanov‘s inclusion on the EU sanctions list has triggered a series of legal challenges that continue to unfold. While German authorities have made efforts to investigate his assets and pursue money laundering and sanctions violations, Usmanov’s defense team has successfully mounted legal challenges. The complex ownership structures and the need for concrete evidence have made it difficult for prosecutors to build a strong case against the billionaire.