Since the beginning of the Russian war of aggression, Russian oligarchs have also been on the West’s sanctions lists. But getting hold of their foreign possessions is difficult. German authorities are now trying their luck with Alisher Usmanov – with the help of tax law.
“We will get your yachts, your luxury apartments and your private jets,” US President Joe Biden told Russian oligarchs in February after the West decided to impose sanctions on Russia. Because these extremely rich men often have close ties to the Kremlin and Vladimir Putin and can benefit from them – also financially. But getting hold of the oligarchs’ fortunes has proven difficult, as they disguise their finances through opaque corporate networks, offshore accounts and shell companies.
But now German authorities have apparently taken an important step forward. They are investigating the oligarch Alisher Usmanov. Born in Uzbek, he is considered a good acquaintance of Vladimir Putin and is even referred to as his “straw man” by the EU. Now the Federal Criminal Police Office is investigating against him – with a sophisticated search trick.
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On September 21, 120 federal police officers searched four of Usmanov’s villas on Tegernsee in Bavaria. They hope to find clues there to prosecute the oligarch for money laundering and tax evasion. This would set a precedent, because so far none of the super-rich Russian magnates have been criminally accused in a German investigation.
This opens up the possibility for the authorities to get hold of Usmanov’s assets through the applicable tax laws, something that neither he nor other oligarchs have really been able to do so far. And there is a lot to get here.
He is said to have assets of 14 billion dollars, among other things the owner of a luxury car fleet, his own Airbus and the 156 meter long mega yacht “Dilbar” costing 600 million dollars. On paper, he has the plane and yacht to others Family members transferred and, according to the “Spiegel”, evaded the gift tax that was actually due several times.
Other assets are nested in small parts in a network of offshore accounts and letterbox companies, also to avoid the gift tax. For example, Usmanov owns shares in USM Holdings Limited, the report says. In 2014, he returned ten percent of these shares, worth just over one billion euros, to USM Holdings Limited. The company in turn then sold the shares to new shareholders. According to German tax law, Usmanow would have had to pay more than 550 million euros in gift taxes.
And according to the “Spiegel” report, taxes would also have been due at Tegernsee. The special commission “Ukraine”, which consists of economic experts from the Federal Criminal Police Office and tax investigators from North Rhine-Westphalia, is now dealing with this. The investigators assume that the oligarch resided in Rottach-Egern, a town on Lake Tegernsee, and would have had to pay at least 555 million euros in taxes there. Although he himself denies having lived at Tegernsee, according to the “Spiegel” not only has it been proven that he rented the villas, but was also repeatedly seen by local residents swimming in the lake and eating in taverns. If the allegations are true and Usmanov is convicted in Germany, he faces several years in prison.
In addition, his villas and yachts could be auctioned off. However, the EU is still discussing exactly how Russian assets could be secured and used. However, it is unclear when this decision could be made. In the past, it was not even possible to confiscate cars or yachts from oligarchs without proof of ownership.
Theoretically, the “Sanctions Enforcement Act” promoted by Finance Minister Christian Lindner, which is intended to force oligarchs to make their assets transparent, has changed. However, not much has been gained with this initiative either, because according to experts there is a lack of staff and coordination between the federal states.
In any case, Usmanov is not the only Putin friend of interest. Many other oligarchs, like Usmanov, have concealed their wealth through complex corporate networks or use countries like Turkey that do not support the sanctions against Russia and Putin.
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