Shell Companies, Data Hurdles Give Rise to ‘Oscar,’ EU’s Newest Sanctions Project

By Gabriel Vedrenne

Europol, the EU’s law enforcement agency, has launched a new initiative to support financial and criminal investigations by the bloc’s 27 nations into parties blacklisted for their ties to or support of Russia’s invasion of Ukraine.

Operation Oscar, which Europol plans to run for at least 12 months, will see the agency join with Eurojust, which facilitates cross-border legal cooperation, and Frontex, which coordinates border control, to enable the “exchange of information and intelligence” between EU nations and support their efforts to seize assets and combat sanctions circumvention.

“Europol will centralize and analyze all information contributed under this operation to identify international links, criminal groups and suspects, as well as new criminal trends and patterns,” the agency announced Monday.

Oscar represents the latest in a series of global initiatives to enforce commercial and banking restrictions that western nations have imposed on oligarchs and other entities in Russia and Belarus since Feb. 24, when Moscow’s latest military offensive into Ukraine commenced.

On March 2, U.S. Attorney Merrick Garland unveiled “Task Force KleptoCapture,” a coalition of law enforcement agencies formed to combat “unlawful efforts to undermine restrictions taken against Russian financial institutions, including the prosecution of those who try to evade know-your-customer and anti-money laundering measures.”

The EU launched a similar project, the “Freeze and Seize Task Force,” on March 17, and the same day announced the creation of the “Russian Elites, Proxies, and Oligarchs Task Force” with Australia, Japan, Britain and the U.S.

Taskforces have grown in importance during the first seven weeks of Russia’s invasion, which saw newly blacklisted individuals and their associates move quickly to shield their wealth behind complex amalgamations of trusts, legal entities and bank accounts in disparate locations, said Gabriele Dunker, a partner with Financial Transparency Advisors in Vienna.

The cross-border nature of those arrangements complicates efforts by national authorities to obtain the financial records, corporate documents and other data they require to trace suspicious assets back to their owners, Dunker told ACAMS

“Without a governing legal framework, it would be difficult, if not impossible, for all these authorities to legally share information, particularly outside of an ongoing criminal investigation,” she said.

EU nations have frozen more than €30 billion to date in line with sanctions imposed in response to the invasion, but some governments claim they have encountered obstacles—either real or perceived—that blocked them from sharing intelligence on suspected attempts to evade sanctions.

These challenges have become more frequent during the current crisis, said Yannick Poivey, co-founder of Swiss Forensic & Compliance in Lausanne.

“Elites in many developing countries move their money offshore, but Russian oligarchs do so on a much larger scale and their arrangements are usually much more complex because they benefit from highly skilled advisers.”

An affidavit filed in Washington, D.C., last month against Viktor Vekselberg, a Russian oligarch blacklisted by the U.S. since April 2018, illustrates the complexity.

An FBI agent alleged in the affidavit that Vekselberg used eight companies registered in three jurisdictions—Cyprus, Panama and the British Virgin Islands—to obscure his ownership of the Tango, a $120 million superyacht now moored off the coast of Palma de Mallorca, Spain.

“Between 2011-present, Vekselberg and his co-conspirators conspired to commit bank fraud by structuring transactions about the Tango in such a manner as to obfuscate [his] ownership interest therein, and in order to cause U.S. financial institutions to process U.S. dollar transactions,” the agent stated in the affidavit.

“Further, there is probable cause to believe that the deceptive practices allowed Vekselberg and his coconspirators to evade U.S. financial institutions’ know-your-customer investigations on these transactions and the reporting of the transactions to the Treasury Department,” the agent stated. “Ultimately, U.S. financial institutions processed these transactions.”

Separately, no fewer than 14 percent of the 27,000 secret offshore companies revealed by the Pandora Papers, a cache of 12 million legal records and other documents published by the International Consortium of Investigative Journalists last year, tied back to 4,400 Russian citizens, making them the most represented nationality.

A parallel investigation by Al Jazeera found that nearly 40 percent of the 2,351 “golden passports” that Cyprus issued from November 2017 to July 2019 went to Russian nationals, several of whom qualified as politically exposed persons, were the subject of criminal proceedings or had appeared on sanctions lists.

Cyprus, like several other EU countries, has created a national taskforce to improve compliance with sanctions against Russia and Belarus.

“Faced with jurisdictions with limited means or political will, these taskforces not only save time by addressing a single request for information instead of one per country, they may also be more convincing because they carry a greater political and economic weight,” said Poivey.

Contact Gabriel Vedrenne at

Topics : Sanctions , Asset Forfeiture
Source: European Union
Document Date: April 13, 2022