US spotlights EU-Russia sanctions compliance

Its list includes “14 individuals and entities linked to those that have engaged in serious and sustained evasion of existing sanctions or are 50 percent or more owned by a designated entity,” as well as “12 entities for operating in the Crimea region of Ukraine,” which was, last year, annexed by Russia.

It includes six Ukrainian separatists and two former Ukrainian regime members.

It also designates subsidiaries of Russian lenders VTB Bank and Sberbank and arms firm Rostec.

It said the top sanctions evaders are linked to Gennady Timchenko, Arkady Rotenberg, and Boris Rotenberg - oligarchs and personal associates of Russian leader Vladimir Putin.

The Ukrainian individuals include Vitaliy Zakharchenko, former interior minister, whom the US accuses of issuing “the order on 20 February 2014 to use firearms against peaceful Euro-Maidan protestors in Ukraine, which resulted in dozens of deaths.”

It noted some Crimea and Ukraine listings “have also been previously designated by the European Union, underscoring continued trans-Atlantic unity.”

The US order casts a spotlight on EU sanctions compliance, which, according to EU diplomats, is not as robust as it could be.

“A number of [EU] countries have said [in EU Council debates] we need to look at how our sanctions regime is implemented, to avoid some companies using subsidiaries, or other structures, to circumvent the measures, but this suggestion was never taken up,” an EU source told EUobserver on Tuesday.

“Implementation of sanctions remains a competence of [EU states’] national authorities.”

The new US list names Sven Anders Olsson, a Swedish lawyer, said to be involved in Timchenko’s oil trading empire, including via his board membership in IPP Oil Products (Cyprus).

It also names SB International and SB Securities, two Sberbank subsidiaries in Luxembourg, Sberbank Europe in Austria, and VTB Bank (Austria).

Deutsche Bank, Siemens

For its part, the Bloomberg news agency, on Tuesday reported that Deutsche Bank, has, in an internal probe, identified $4 billion of “suspicious transactions” in its Russia operations, on top of $6 billion previously identified for evading money-laundering controls.

The suspicion is the funds were moved out of Russia, potentially to evade sanctions. Bloomberg said some accounts under review belong to associates of Arkady and Boris Rotenberg.

A Deutsche Bank spokeswoman on Tuesday told EUobserver it’s sharing information with German, Russian, UK, and US authorities, but declined to comment on Bloomberg’s $4 billion report.

The US Department of Justice declined to confirm it has launched an investigation into the German lender.

Dzerkalo Tyzhnia, a Ukrainian weekly, on 18 December, also published an investigation into German engineering firm Siemens.

It said Siemens, in partnership with Russia’s Rostec, is to deliver gas turbines to Taman, a Russian rural district close to Crimea.

But it found evidence the turbines will end up in Crimea in violation of EU restrictions. It said Siemens and Rostec are to use a joint-venture, in which the German firm is a minority shareholder, to transfer the turbines to occupied Ukraine.

Siemens could not be contacted for a comment on Tuesday. It previously denied the allegations, first reported in Vedomosti, a Russian daily, in June.

Nord Stream, asset freezes

The EU source said Germany’s plan to build a new gas pipeline to Russia, Nord Stream II, should undergo a “legal analysis” by the European Commission.

The commission is checking its compliance with EU competition law. But the source said it should also check if it involves transfer of technology forbidden under EU measures.

The EU has imposed asset freezes on 149 persons and 37 entities.

EUobserver contacted authorities in some of the EU’s biggest Russia financial centres: Austria, Cyprus, Greece, Luxembourg, The Netherlands, and the UK.

The Austrian central bank said “we have frozen some assets,” but declined to say more. A spokesman for the Luxembourg PM said Luxembourg has not frozen a centime.

The others declined to give information.

The Cypriot foreign ministry said: “The competent services of the Republic of Cyprus are taking all necessary actions on the basis of relevant [EU] Council decisions.”

A Greek diplomat said: “Given the overall current situation of the Greek economy and the Greek banks’ recapitalisation having been completed only very recently, it seems … somehow difficult for any significant assets of the individuals included in the Council’s list to be found in Greek banks.”