Sell well, but above all quickly. Since Monday February 28, investment bankers Joseph Ravitch and Colin Neville, of the American bank Raine, have gone around their address book to get the message across: Chelsea FC, held for almost twenty years by Russian billionaire Roman Abramovich is for sale. For the trifle of 3.6 billion euros, the football club, the stadium and the real estate in the most prestigious district of Londongrad are up for grabs.
United States, Europe or the Middle East, Ravitch and Neville launch their touts, barely hiding their feverishness. In the arguments sent to potential takeover candidates, which L’Express was able to consult, they insist on the urgent nature of the transaction. “The speed and certainty of closing are essential in the analysis of any offer,” they write. And when word spread of a crash sale, bankers rushed to correct it. They assure, without proving it, that offers of 3 billion euros have already been declined. Not enough, however, to fool the microcosm of business.
If the placid Abramovich today shows great excitement when he is not (yet) on the list of oligarchs to be sanctioned established by London, is that a real wave of panic has taken hold of this small world gilded on edge. A caste of billionaires, who got rich beyond measure by carving up Russian state-owned enterprises after the country’s collapse in the 1990s, is now caught in the turmoil.
Not a day goes by without new sanctions darkening their usually azure skies, or without the list of these new planetary outcasts growing, whether that be in Great Britain, in the European Union (EU), or on the Washington side. The list of Twenty-Seven alone contains 500 names, those of the oligarchs of course, but also of their families and relatives to best circumscribe their assets and put them under glass.
The yacht hunt is on
Even the very welcoming and accommodating Principalities of Monaco and the Swiss Confederation have announced that they want to join the wheel of the EU. “That Switzerland and Monaco decide to align themselves with European sanctions clearly changes the situation,” says Johan Langerock, Greens adviser on tax issues in the European Parliament. Monaco has already taken part in the great hunt for Russian yachts by preventing the Quantum Bluea 100-meter-long behemoth of the seas, owned by Sergei Galitsky, to cast off.
The name of the 17th fortune of Russia, however, does not appear on any list. But the latter growing every day, the Rock would have acted as a precautionary principle. As for theLove Veroseized as he was preparing to leave the port of La Ciotat on the sly, things are clearer: this yacht is the property of Igor Setchine, the powerful boss of the Russian oil group Rosneft, a close friend of Putin.
All-out sanctions, seizures, lists of oligarchs amended almost daily… The shock wave creates a real blast effect intended to stun Russian billionaires close to the Kremlin, but also the intermediaries who helped them launder fortunes built with great blows of bribes and sometimes in blood. And it works. At the very moment when certain oligarchs are hastily trying to liquidate or transfer part of their wealth, the “facilitators” (lawyers, tax experts, notaries, property dealers, etc.) are suddenly… less easy to reach.
“To agree today to support Russian oligarchs, or even the Russian state, is to take a very high reputational risk, points out Olivier Attias, international law lawyer at August Debouzy. And to become an accomplice in circumventing sanctions, it’s exposing yourself to a five-year prison sentence!” A wind of panic and uncertainty that is blowing more broadly across all financial players. In Luxembourg, Switzerland, Liechtenstein or Portugal, the offices specializing in financial vehicles or the portage of goods, the sanctions oblige them to cut dead branches before the rest of the heritage is fanned.
France, spearhead in the hunt for Russian oligarchs
In the meantime, in France, the hunt for the oligarchs is being organized. Even if he went back on his remarks, Bruno Le Maire did not hesitate to declare that France was going to “wage a total economic and financial war on Russia”. The freezing of assets is one of the weapons of the Minister of Economy. To achieve this objective, a “task force” has been set up in Bercy to unearth the yachts, villas or financial assets of billionaires close to the Kremlin. Since last week, dozens of officials from the General Directorate of Public Finance, Customs, Tracfin and the Treasury have been inspecting bank accounts, real estate and tax files, ports, to compile a list of assets held by the targeted oligarchs. . Real estate agents, notaries and banks are also involved.
This work is facilitated by the tools put in place for several years to fight against tax evasion, money laundering or the financing of terrorism. “We have computer files connected to data from Bercy or the European Union which would allow us to detect a suspicious transaction”, assures David Ambrosiano, the president of the High Council of Notaries. Despite this, the hunt for oligarchs remains an obstacle course. Very often, the latter hide behind complex financial arrangements. “We must then investigate, try to see if they have not taken shelter behind a member of their family”, we explain to Bercy. Painstaking work that allows to bring up names likely to be added to the sanctions list.
The effort is as considerable as it is commendable. But those close to Putin did not wait to see their wallets taken by storm to organize themselves. “When you are a Russian oligarch, you have long anticipated the possible predation of a State on your assets, so you have distributed them in different countries with a granulometry according to the risks of seizure”, details Philippe Pelé-Clamour, Russia specialist and professor at HEC.
In recent years, the Russian elites have also had their arm twisted by Putin to reinvest part of their fortune in the local economy, therefore out of reach today of the various sanctions. Heritages that may also have been diversified in art. In 2008 alone, Roman Abramovich bought a triptych by Francis Bacon for 86 million dollars and then a painting by Lucian Freud for nearly 34 million dollars! Collections which are most often stored in free ports in Switzerland, small offshore fortresses which allow, in addition to total anonymity, exemption from VAT and customs duties.
Cryptocurrencies can also be used as alternative investments and, for the moment, beyond the reach of the authorities. The price of bitcoin is also experiencing a nice upturn and purchases in rubles on the various digital currency platforms have increased sharply.
Still too many holes in the net
Above all, if the path of Western sanctions is paved with good intentions, it is also strewn with gaping holes. “They are at best 15%, 20% effective,” said Sara Brimbeuf, corruption specialist for Transparency International. To begin with, many European countries still do not have an exhaustive register listing the beneficial owners of companies, whereas it has been an obligation for the Member States since 2017. “In France, 30% of them still do not have nothing informed”, points out Sara Brimbeuf.
Worse: if the company has its headquarters outside Europe, it escapes this obligation. The European Commission has also proposed before the summer to remove this exemption. “Afterwards, there will always be the black hole of tax havens, which we are not about to resolve, while the latest EU list does not include the Cayman Islands, Luxembourg or even Switzerland. ..”, laments Quentin Parrinello, tax justice and inequality specialist for Oxfam France.
But this terrible war can be an opportunity to put the whole system back on track, provided of course that the means are given. “Bruno Le Maire talks about seizing the assets of the oligarchs, so that means seizing the National Financial Prosecutor’s Office, but the latter is already awash in files”, points out Sarah Brimbeuf, who counts no less than 600 cases in progress for the 18 magistrates in place. “To apply these new measures it will be necessary to ‘hire’ massively”, concludes the expert from Transparency International.
Could the oligarchs turn against Putin?
If the Western world has decided to hit the Russian oligarchs in the wallet, it is in the hope that the latter, treated as pariahs and cut off from part of their fortune, will end up turning against Putin. Plausible? “I don’t believe it, they are too dependent on Putin for access to Russian public markets, not to mention their security,” breathes Michel Duclos, former French ambassador to Russia. In fact, several oligarchs who had turned against the master of the Kremlin have suffered violent deaths in recent years.
“Now, an objective alliance with the army, which has taken a lot of power since the victory in Crimea, could change the situation, continues the former ambassador. We can quite imagine that the generals say that the “boss” no longer knows what he is doing … “A scenario all the more likely that he could be supported by the population. “With inflation due to Western economic sanctions, the Russian people will see their purchasing power crumble, and they risk losing all their savings as the country’s banks falter,” said Catherine Karyotis, professor of finance at Neoma Business School. The Russians, like the Ukrainians, held hostage by Putin’s madness.