U.S. Exposes Attempted Sanctions Evasion Scheme Connected to Russian Oligarch

U.S. Department of the Treasury

May 14, 2024

WASHINGTON -- Today, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated one Russian individual and three Russia-based companies involved in an attempted sanctions evasion scheme in which an opaque and complex supposed divestment could have unfrozen more than $1.5 billion worth of shares belonging to U.S.-designated Russian oligarch Oleg Vladimirovich Deripaska (Deripaska).

OFAC designated Deripaska on April 6, 2018 pursuant to Executive Order (E.O.) 13661 for having acted or purported to act for or on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation as well as pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy. Deripaska is also sanctioned by Australia, Canada, the European Union, New Zealand, and the United Kingdom. On September 29, 2022, the U.S. Department of Justice charged Deripaska with conspiring to violate and evade U.S. sanctions in violation of the International Emergency Economic Powers Act.

"Treasury will continue to take action to protect the integrity of our multilateral sanctions regime and stop evasion by the Kremlin and its oligarch enablers," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. "Anyone still doing business in or with Russia should be skeptical of supposed divestment schemes that involve shell companies or proxies linked to sanctioned oligarchs. Corporate sales and acquisitions can be abused for money laundering and sanctions evasion."

In June 2023, Deripaska coordinated with Russian national Dmitrii Aleksandrovich Beloglazov (Beloglazov), the owner of Russia-based financial services firm Obshchestvo S Ogranichennoi Otvetstvennostiu Titul (Titul), on a planned transaction to sell Deripaska's frozen shares in a European company. Within weeks of this coordination, Russia-based financial services firm Aktsionernoe Obshchestvo Iliadis (Iliadis) was established as a subsidiary of Titul. In early 2024, Iliadis acquired Russia-based investment holding company International Company Joint Stock Company Rasperia Trading Limited (Rasperia), which holds Deripaska's frozen shares.

Today, Beloglazov, Titul, and Iliadis were designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. Rasperia was designated pursuant to E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Iliadis.

This scheme is consistent with typologies highlighted by the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force in a March 9, 2023 Global Advisory. As noted in the REPO Task Force Global Advisory, sanctioned Russian individuals leverage complex ownership structures to disguise their connections to particular assets or entities and use enablers to aid evasion efforts. A March 7, 2022 Financial Crimes Enforcement Network (FinCEN) Alert also identified certain red flags, including the use of corporate vehicles to obscure ownership and source of funds and the use of third parties to shield the identify of sanctioned persons, to assist financial institutions in identifying potential Russian sanctions evasion attempts.

SANCTIONS IMPLICATIONS

As a result of today's action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person. In addition, sufficient due diligence should be conducted to determine that any purported divestment in fact occurred and that the transfer of ownership interests was not merely a sham transaction.

The power and integrity of OFAC sanctions derive not only from OFAC's ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC's FAQ 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

For identifying information on the individual and entities sanctioned today, click here.

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