That threatens the protagonists of the investigation in Russia
The authors of the investigation on materials “Panama dossier” found an offshore company in the 13 families of the Russian deputies and officials. In strict compliance with Russian anti-corruption legislation some participants of the investigation could threaten the dismissal of review the Deputy Director of the research Centre for anti-corruption “Transparency International Russia” (TYRE) Ilya Shumanov.
In the Russian law on combating corruption there is no concept of “offshore”, but its provisions did not allow Russian officials and deputies to dispose of foreign firms, notes Šuman. Since 2013, civil servants are prohibited from engaging in business operations abroad or use foreign financial instruments in the form of accounts, loans, bills. An offshore company is a foreign financial instrument, therefore, to lead them the civil servant has the right, emphasizes Šuman.
The civil servant is entitled to be a beneficiary, beneficiary of the offshore company, but by law, the official must declare it. Besides, there should not be conflict of interest between the activities of the offshore company and the employees.
According to Shamanova, if a public servant is a beneficiary (beneficiary) of the offshore company, this does not mean that he is the holder of a foreign account. “Bill owns a legal entity, not a physical one”, explains the expert.
In Russian anti-corruption legislation there is a gap: if a civil servant transferred in trust management to the offshore, law enforcement can turn a blind eye. “Just in the contract on transfer to trust management should be spelled out that changing the beneficiary,” says Šuman.
The expert adds that because of errors the Registrar may be that the civil servant in the databases is the owner of the offshore company, although gave it in trust. It was stated by several interviewed persons involved in the investigation, in particular Deputy Viktor Zvagelsky and Chelyabinsk Governor Boris Dubrovsky.
As the media giant revealed a network of offshore companies worldwide
A year ago unknown gave to the German newspaper Sueddeutsche Zeitung access to 11.5 million legal documents of the Panama Mossack Fonseca company involved in the transaction and the registration of offshore companies.
The German newspaper was not able to analyze all the material independently and connected to the work of the international consortium of investigative journalists (ICIJ), which in turn appealed to more than a hundred editions and organizations fighting corruption around the world. Just work with the extracted documents has involved more than 370 journalists from 76 countries of the world.
On Sunday they presented the results of their work: in “Panama” (The Panama Papers) they were able to communicate with offshore companies the names of 12 current and former world leaders, politicians 128 and 29 billionaires on the Forbes list.
Who funds the investigation
Information about foundations and organizations that Fund ICIJ presented on the website of the consortium. Among these organizations founded by George Soros Foundation “open society”, Foundation “Odessian” (Netherlands), Ford Foundation, Foundation, the David and Lucile Packard Foundation, Sigrid Rausing Trust British, American Pew Charitable Trust and others. Among the organizations that have supported the Centre for investigation of corruption and organized crime (OCCPR), called “open society”, as well as the United States Agency for international development (USAID).
The majority of owners of offshore companies in practice are engaged in business activities, the expert emphasizes. “Although there are offshore companies to do business,” he says. The state Duma deputies are prohibited from engaging in any business activity.
The law on combating corruption in the case that the officers discovered undeclared foreign asset, including financial, he faces a disciplinary liability — the removal from office.
Verification of civil servants on violation of anti-corruption legislation should trigger the Prosecutor’s office. In the case of deputies the decision on mandate addition takes the Duma Commission on control over reliability of data on incomes. By law, she can start to check the Declaration and on the basis of an application head of a political party and the media, explained Deputy head of the Commission Vladimir Pozdnyakov, the Commission itself cannot initiate the review.
But in reality, when it comes to public inquiries on corruption of high-ranking officials, law enforcement agencies, as a rule, they did not react, said the lawyer of Fund of struggle against corruption (FBK) Love Sable. “The reaction is, when our employees do not publicly apply for violations when there is no mention of this statement from the Fund of struggle against corruption Alexei Navalny,” says Sobol. According to her, for the authorities to initiate a criminal case after a public and high-profile investigations is to show weakness.
Possible sanctions abroad
The publication of such investigations may be cause to check, did the civil servant in his country, the tax laws of disclosure companies and tax and legal requirements for public officials, says a senior lawyer at international tax law firm Goltsblat BLP LLP, Artem Toporov.
Inspectors can also examine, do not constitute transactions conducted through the company, independent offences, if there is special legal requirements, etc.
Journalists learned about each President
The friend of youth of Vladimir Putin Sergei Roldugin was one of the largest shareholders of the seller of television advertising in Russia, Video international (Vi), through offshore companies owning 20% of the company. In 2010, when it was announced that 100% of Vi bought the structure of the Bank “Russia”, “Surgutneftegas” and the main shareholder of “Severstal” Alexey Mordashov, 12,5% sale Cyprus received Med Media Network — a 100% subsidiary of another offshore structure International Media Overseas, the real beneficiary of which is called Sergei Roldugin.
Roldugin was one of the beneficiaries of companies, owning stakes in the plants of KAMAZ and AVTOVAZ. In his interest to act “Troika Dialog” Ruben Vardanyan, buying shares of these companies. About 32.2% from 54.4% stake of KAMAZ, Troika owned through a Cyprus Avtoinvest Limited. In 2007, the Troika has transferred all rights to manage Avtoinvest offshore Avto Holdings Ltd. In 2008, the company Roldugin Sonnette Overseas acquired 15% Avto Holdings and entered into a shareholder agreement with the other co-owners, including the “Troika”. The ultimate goal of the agreement was to obtain a controlling stake of KAMAZ through Avtoinvest. A similar agreement between the Troika and offshore companies associated with Roldugina, were about the stock of AVTOVAZ.
In turn, transactions with funds of illicit origin can be classified as legalization of funds acquired by criminal means or as a result of the crime. And this can lead to frozen funds and assets and undertaking of criminal complaints not only in Russia but also abroad, he said.
The information contained in “Panamanian documents”, increases the risk of new U.S. sanctions against individuals deemed close to President Vladimir Putin, and their related companies. Cellist Sergei Roldugin — one of the few in Putin’s circle who escaped American sanctions in the spring of 2014. The Bank “Russia”, named by the U.S. Treasury as “the personal Bank” for senior Russian officials, “obviously tried to use this loophole” [what Roldugin does not come under the sanctions], writes The Guardian, which participated in the investigation. In 2014, after the imposition of sanctions against Yuri Kovalchuk and Bank “Rossiya”, a Swiss lawyer, Andres Baumgartner helped to open a secret account in the Swiss “daughter” of Gazprombank for offshore International Media Overseas owned Roldugina.
OFAC (a division of the US Treasury Department responsible for sanctions), as a rule, “very concerned with the problem of circumvention of existing sanctions: if something about a person, it appears that it helps to circumvent existing sanctions, OFAC may make it to the list of SDN (persons whose assets in U.S. jurisdiction are blocked), says the American lawyer Kelly Jacobson Burton PLLC Doug Jacobson, specializing in the sanctions. While OFAC may rely on any information sources, including data journalism, said the lawyer.
At risk of sanctions because of “Panama” and leaks are two of the company: Russia’s largest seller of TV advertising Video international (Vi) and Cyprus RCB Bank, 46% owned by VTB.
Subsidiaries of state banks involved
European regulators announced his readiness to check the banks contained in “Panamanian documents”. The attention of the local regulators can draw, the Swiss “daughter” of Gazprombank — Russische Kommerzial Bank (RKB) and RCB Bank, 46% owned by VTB and 19,85% — “OTKRITIE”.
The official representative of the Swiss financial market regulator FINMA Vincent Mathis in response to a query said that the publication in the media about the so-called Panamanian documents will be taken into account. “As part of its Supervisory activities, FINMA will specify the extent to which banks participated in the schemes and observed under Swiss law”, — said in response to the FINMA. While FINMA declined to comment on the activities of individual organizations and individual names.
According to investigative journalists, one of the main sources of financing for offshore companies Roldugin were huge unsecured loans from RCB Bank, commercial sense, is questionable. The Guardian reports the words “high-ranking source in Moscow” that describes RCB as “private wallet” for high-ranking officials. Until the fall of 2014, VTB owned 60% of the Cypriot Bank, and eventually sold some shares to the Bank “Opening”. Through this transaction RCB Bank ceased to be subject to automatic sanctions (restrictions on attraction of the Western financing) as the “daughter” VTB. In the opinion of the partner Paragon Advice Group Alexander Zakharov, if Western authorities interested in the findings of the investigation, the RCB appears to the potential risks associated with the possibility of audits by OFAC. Now RCB is not included in VTB group (the Bank only owns 46% of shares) and is not registered in the sanctions lists.
From “Panama archive” that Roldugin in 2010-2015 was a secret shareholder in a Cyprus Vi Med Media Network, whose beneficiaries were not previously known. Mossack Fonseca documents show that the owner of 100% of Med Media is offshore Roldugin International Media Overseas. Roldugin controlled 20% Vi at least until 2015, when the package was handed over to the offshore Financial Robertson, the beneficiaries of which are not installed.
The representative of the OFAC had not responded to the request , and U.S. state Department spokesman said the state Department, as a rule, “does not comment on leaks”. “It is unclear how and when OFAC uses the information Mossack Fonseca, but I am sure that these documents are of interest to them, and OFAC will carefully examine this information,” says Jacobson.