The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has identified an attempted sanctions evasion scheme involving a Russian individual and three Russia-based companies. The intricate scheme could have potentially unfrozen over $1.5 billion worth of shares belonging to U.S.-designated Russian oligarch Oleg Vladimirovich Deripaska.
Deripaska was designated by OFAC on April 6, 2018, under Executive Order (E.O.) 13661 for purportedly acting on behalf of a senior official of the Russian Government and E.O. 13662 for operating in the energy sector of the Russian Federation economy. He is also sanctioned by Australia, Canada, the European Union, New Zealand, and the United Kingdom. On September 29, 2022, Deripaska was charged by the U.S. Department of Justice 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.
In June 2023, Deripaska coordinated with Russian national Dmitrii Aleksandrovich Beloglazov, 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. Subsequently, Russia-based financial services firm Aktsionernoe Obshchestvo Iliadis (Iliadis) was established as a subsidiary of Titul and acquired Russia-based investment holding company International Company Joint Stock Company Rasperia Trading Limited (Rasperia), which holds Deripaska’s frozen shares.
Today’s designation includes Beloglazov, Titul, and Iliadis under E.O. 14024 for operating in the financial services sector of the Russian Federation economy. Rasperia was designated under E.O. 14024 for being owned or controlled by Iliadis.
This scheme aligns with typologies highlighted by the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force in a March 9, 2023 Global Advisory. The advisory noted that sanctioned Russian individuals often use complex ownership structures to disguise their connections to assets or entities and employ enablers to aid evasion efforts.
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.
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.
