Odious russian oligarchs continue to make money on trade with Europe

Billionaires close to russian President vladimir putin continue to make money by exporting goods to the West, bypassing sanctions, thanks to a loophole that allows companies to operate in EU markets if the share of shares held by sanctioned businessmen is less than 50%.

Billions of dollars in profits from trade with Europe are earned by russia's most notorious oligarchs, such as Gennady Timchenko, Alisher Usmanov, and Oleg Deripaska.

If a businessman falls under sanctions, it does not mean that restrictions are automatically imposed on his assets. For this to happen, he must control at least 50% of the company. The second option is that if there are several sanctioned co-owners, they must hold half of the shares in total.

Therefore, some oligarchs simply reduce their stake in the project to circumvent sanctions restrictions. Oleg Deripaska has reduced his stake in En+ and Rusal. Deripaska controls 35% of En+. En+, for its part, owns almost 57% of Rusal, a major aluminum producer.

With money from the West, Deripaska maintains his own PMC, which is fighting in Ukraine. During the full-scale war, from 2022 to 2024, Deripaska's fortune more than doubled. Now, according to Forbes, it is worth $2.8 billion.

Rusal's second major shareholder, Viktor Vekselberg, avoids EU sanctions and continues to do business in Europe. He remains unpunished, despite the fact that he is one of the closest businessmen to putin during the war, and the oligarch's companies are involved in the production of missiles used in the bombing of Ukrainian territory.

Another way to get your business out of the sanctions is to register shares in the names of the company's managers (with a buy-back option), relatives or other controlled persons. Alisher Usmanov chose a similar scheme: he reduced his stake in USM, and now the oligarch, who is close to the head of the United russia party, Dmitry Medvedev, owns 49% of the holding. Therefore, after Usmanov's inclusion in the EU sanctions list, USM stated that the holding's companies would not be affected.

USM includes, among others, Metalloinvest, the largest iron ore company in russia and the CIS. Metalloinvest's companies export their products to European countries.

Usmanov's partner in Metalloinvest is Andrey Skoch, a State Duma deputy from United russia. He is under sanctions himself, but the business is registered in the names of his father Vladimir and daughter Varvara, who are not subject to EU restrictions.

Since the beginning of the great war, the fortunes of Usmanov and the Skoch family have only grown: to $13.4 billion and $6.7 billion, respectively. In total, in two years they have become richer by almost $4 billion.

Also making money from trade with Europe are United russia member Andrey Guriev and his partner Vladimir Litvinenko, who is believed to be the real author of putin's fake dissertation.

Guriev's family owns 48.5% of Phosagro, russia's largest phosphate fertilizer producer.

Litvinenko and his wife Tatyana, to whom he transferred more than 20% of Phosagro's shares in 2022, are not under EU sanctions. And Phosagro freely exports its products to Europe. Lytvynenko's wealth has doubled since 2022 to $3 billion.

Oligarch Andriy Melnychenko's Eurochem also supplies fertilizers to Europe, although he reduced his stake in the company after being sanctioned.

Roman Abramovich also continues to profit from trade with Europe. Abramovich owns a 28.64% stake in Evraz, a large metallurgical and mining company. The company exports its products to France and the Czech Republic.

Abramovich is also a minority shareholder in Norilsk Nickel. The main owner of the company, Potanin, is not sanctioned by the European Union, so the leader of the russian mining and metallurgical industry not only exports its products but also has production facilities in Europe.

putin's “wallet” Gennady Timchenko acts as a junior partner of billionaire Leonid Michelson. Timchenko owns stakes in Novatek (23.49%) and Sibur (17%). Michelson, the main owner of the companies, is not under EU sanctions, so the companies from which Timchenko receives profits are not subject to restrictions.

Source: The Insider