Report: Abramovich placed kids in control of billions in assets to avoid sanctions

Russian-Israeli oligarch Roman Abramovich is reported to have rapidly reorganized his assets in the early days of the war in Ukraine, making his children the beneficiaries of his trusts in an apparent effort to evade international sanctions.

A large cache of files shared anonymously with The Guardian showed how Abramovich — the former owner of England’s Chelsea soccer club and once Israel’s wealthiest individual — turned his seven children into billionaires almost overnight in February 2022.

Sanctions experts told the paper in the report published Friday that the financial moves will make it more difficult for countries to sanction Abramovich, who is accused of having close ties with the Kremlin and has Moscow to thank for much of his wealth. Unlike international sanctions against Putin’s aides, penalties against oligarchs have largely avoided targeting their families as well.

The assets transferred to Abramovich’s children — the youngest of whom is just nine years old — include luxury properties along with fleets of super-yachts, helicopters and super-jets, The Guardian said. The ten offshore trusts in Jersey and Cyprus that transferred to his children hold assets worth at least $4 billion, although the total value could be much higher, the report said.

The FBI identified this strategy by Abramovich last year when the agency said he had reorganized his trusts in an effort to prevent the US from seizing two of his jets.

The files leaked to The Guardian suggest that the effort was much more far-reaching, though.

The Bermuda-flagged luxury yacht “Solaris” belonging to Roman Abramovich sails near the Aegean coastal resort of Bodrum, Turkey, March 21, 2022. (IHA via AP)

Still, sanctions experts acknowledged that while seemingly unethical, the reorganization of assets does not appear to have broken any laws.

The measures taken by Abramovich appear to allow him to legally state that he does not control the offshore trusts’ assets and that he is even barred from exercising such control from here on out.

Abramovich was photographed Tuesday visiting the Western Wall in the Old City of Jerusalem, reportedly for the bar mitzvah of his son. He has been spotted in Israel several times since Russia’s invasion of Ukraine last year.

The oligarch has already been sanctioned by Britain and the EU for his purported support of Russian President Vladimir Putin and Moscow. Last month Canada said it too would be sanctioning Abramovich and seizing assets linked to him.

Analysts have said Russia’s invasion has been a personal disaster for Abramovich, wiping billions off the value of his assets.

According to an updated list of richest people issued by The Times newspaper in May, the sanctions toppled Abramovich from his position as Israel’s richest man, now with an estimated net worth of $6.9 billion, down from $14.5 billion last year.

Russian Roman Abramovich, center, listens to Turkish President Recep Tayyip Erdogan during the Russian and Ukrainian delegations’ meeting for talks in Istanbul, Turkey, Tuesday, March 29, 2022 (Turkish Presidency via AP)

In late March 2022, Abramovich took part in Turkish-hosted peace talks between Russia and Ukraine, which failed to produce meaningful results.

He took Israeli citizenship in 2018, although it is not clear how much time he spends in the country.

Controversially, he also holds a Portuguese passport by claiming to be a descendant of Sephardic Jews.

Abramovich amassed a fortune in Russia’s oil and aluminum industries following the 1991 breakup of the Soviet Union. In 2005, Russian state-owned energy giant Gazprom paid $13 billion for the Sibneft oil company controlled by Abramovich, allowing Putin’s Kremlin to recapture state influence in the lucrative energy industry.

Agencies contributed to this report.

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