Italy seizes £97m Sardinian property owned by Russia's richest man

Italy seizes £97m Sardinian property owned by Russia's richest man

March 19, 2022

Italy seizes £97m Sardinian property owned by Russia’s richest man Alexei Mordashov – as EU Officials discuss using sanctioned Russians’ assets to help fund Ukraine’s post-war recovery

  • Italian Prime Minister Mario Draghi’s office confirmed the seizure on Friday
  • He said the operation to seize the building complex was part of the Western drive to sanction Russian oligarchs close to Putin over the war in Ukraine
  • It comes as reports said the EU is considering using assets as war reparations
  • Ukraine continues to be bombarded with Russian artillery causing widespread death and destruction, as Putin’s forces continue their assault on the country

Italy has seized a £97 million property complex owned by Russia’s official richest man Alexei Mordashov, Prime Minister Mario Draghi’s office said on Friday. 

Italy’s operation to seize the building complex on the Mediterranean island was part of a broad, Western drive to penalise wealthy Russians linked to President Vladimir Putin following the February 24 invasion of Ukraine.

It was the second time this month that assets belonging to Mordashov, reputed to be Russia’s richest man, have been seized in Italy. Police on March 4 impounded his 215 ft yacht, the ‘Lady M’, which had a price tag of 65 million euros.

The news followed reports that the European Union is considering using assets seized from Russian oligarchs to help fund Ukraine’s recovery efforts, as Vladimir Putin continues to lay siege to several of the country’s major cities.

Such a scheme is still in its early stages, but sources in Brussels said one possibility would be to sell the assets in order to fun war reparations, which are unlikely to be forthcoming from Moscow. 

Mordashov, 56, is the son of a mill worker who became a steel magnate with estimated net worth of $29.1 billion. He is believed to be the richest man in Russia, apart from possibly Vladimir Putin himself – whose true wealth is unknown. 

Mordashov is also reportedly the president of Severgroup, an investment management company, and a shareholder in Bank Rossiya, which hit by US government sanctions over being ‘Putin’s bank’, according to the Financial Times.

Italy has seized a £97 million property complex owned by Russia’s official richest man Alexei Mordashov (pictured in 2018, file photo), Prime Minister Mario Draghi’s office said on Friday

In the last two weeks, Italian police have sequestered villas and yachts worth more than 780 million of euros from seven wealthy Russians who were placed on a European Union sanctions lists following the assault on Ukraine.

The most valuable asset seized so far is a superyacht owned by billionaire Andrey Igorevich Melnichenko, which is worth around 530 million euros and was impounded in the northern port of Trieste last Saturday.

The other Russians targeted so far in Italy are Alisher Usmanov, Vladimir Soloviev, Gennady Timchenko, Oleg Savchenko, Petr Aven.

According to Bloomberg, such assets could be used to help Ukraine recover from the war which, after less than a month, has seen widespread death and destruction – particularly in the country’s east.

The outlet added that any decision over what to do with seized assets would ultimately fall to the EU’s member states.

Eric Mamer, spokesman for European Commission President Ursula von der Leyen, told Bloomberg: ‘At this point the assets are only frozen. The president has not asked for this to be explored.’

It was the second time this month that assets belonging to Mordashov, reputed to be Russia’s richest man, have been seized in Italy. Police on March 4 impounded his 215 ft yacht, the ‘Lady M’ (pictured), which had a price tag of 65 million euros

Russian President Vladimir Putin (right) points as billionaire and businessman, owner of Severstal steel company Alexei Mordashov (left) looks on while visiting a college on February 4, 2020 in Cherepovets, Russia

Under EU sanctions, as well as similar schemes put in place by the likes of the US and the UK, Russian assets belonging to Russian oligarchs can be frozen.

On Thursday, the EU also announced that it was creating a ‘freeze and seize’ taskforce to share information among member states, and to implement the sanctions more effectively.

The bloc has said it will also cooperate with the Group of Seven (G7) countries on REPO (the ‘Russian Elites, Proxies and Oligarchs’ task force), Bloomberg reported.

There is a growing concern over Ukraine’s ability to withstand Russia’s assault for much longer. Some cities, such as the port city of Mariupol, are under siege. 

Moscow’s armies are preventing aid from reaching the thousands of people still inside the city, while also preventing people from escaping. 

According to Deputy Prime Minister Iryna Vereshchuk on Saturday, Ukraine has evacuated 190,000 civilians from front line areas via humanitarian corridors since the start of the war. 

She said corridors in the Kyiv and Luhansk regions were functioning on Saturday, but a planned corridor to Mariupol was only partially operational, with buses not being allowed through by Russian troops. 

Yesterday, a private jet owned by Roman Abramovich was among 100 planes essentially grounded by the White House as the US cracked down on aircraft that violated sanctions imposed on Moscow over its invasion of Ukraine.

Sanctioned Russian oligarch Roman Abramovich was spotted in a VIP lounge on Monday before he left Tel Aviv for Istanbul. Flight tracking data shows his Gulf Stream then flew from Istanbul to Moscow on Tuesday, where it is believed to remain

The US earlier this month banned American-made planes – or those with 25 percent American parts – from entering Russia without authorisation, but the Commerce Department said several aircraft had done so in contravention of the sanctions.

These include a Gulfstream G650ER owned by Abramovich, who also owns Chelsea football club, as well as Boeing 737 and 777 aircraft operated by Aeroflot. 

According to flight tracking website Flight Radar, the most recent journey made by Abramovich’s jet was flying from Istanbul, Turkey to Moscow on Tuesday (March 15). Before that, it had been in Tel Aviv in Israel from March 13 to 14.

A picture of the Russian oligarch at Tel Aviv airport appeared to confirm that he had flown to the country. Abramovich, who is of Jewish descent, has an Israeli passport. 

The department warned that providing any service to the named plane, including refuelling, would violate US rules and could result in fines and jail time.

Abramovich, 55, was one of seven oligarchs sanctioned by Western governments – including the UK – earlier this month over his alleged close ties to Russia’s President Vladimir Putin.

The billionaire, who counts Chelsea football club amongst his billions of pounds worth of assets in Britain, has denied his ties to the Russian leader. 

Reports suggest he was the first person to recommend Putin for president to predecessor Boris Yeltsin, and has been a close confidant to the despot.

Flight tracking data show that the plane, with tail sign LX-RAY, flew from Istanbul, Turkey, to Moscow and the safety of Russian airspace on Tuesday

Abramovich’s Gulfstream – like the one pictured here – is valued at about $65 million and is effectively barred from international travel, according to the Department of Commerce

Meanwhile, the deadline for offers for the West London club has now passed, following Abramovich’s decision to put the Blues up for sale on March 2.

‘We are publishing this list to put the world on notice – we will not allow Russian and Belarusian companies and oligarchs to travel with impunity in violation of our laws,’ Commerce Secretary Gina Raimondo said in a statement.

Western countries including the United States and the European Union have imposed stiff sanctions on a range of Russian industries and wealthy individuals seen as supporting Russian President Vladimir Putin and the invasion of Ukraine late last month. The penalties also targeted Belarus for its support.

All of the flights that violated the sanctions were operated or owned by Russian nationals, Commerce said.

Other planes Commerce identified include Boeing 777s and 737s operated by Nordwind Airlines, Boeing 767s and 737s flown by Utair, and Boeing 767s, 757s 777s and a 737 operated by Azur Air.

The department released specific tail numbers, including 33 Boeing planes operated by Aeroflot , and 12 Boeing 747 cargo planes operated by AirBridge Cargo, a unit of Russia’s biggest cargo airline Volga-Dnepr Group.

Aeroflot and a spokesperson for Abramovich did not immediately respond to requests for comment from Reuters.

Abramovich’s luxury lifestyle is being squeezed by EU and UK sanctions – and now the US has moved to prevent his Gulfstream plane from making international flights

Volga-Dnepr declined to immediately comment but said Friday it has suspended all flights using Boeing aircraft citing sanctions and a decision by Bermuda’s Civil Aviation Authority to terminate their safety certificates.

The United States, Canada and much of Europe have barred Russian planes from flying over their airspace, which has forced the cancellation of much of Russia’s international flights.

The rules apply to any U.S. manufactured aircraft or any with more than 25 percent U.S.-origin controlled content that were re-exported to Russia after the new stringent controls on aviation-related items for Russia took effect on February 24.

Deputy Commerce Secretary Don Graves said in a statement the series of U.S. actions ‘have isolated Russia and Belarus from the global economy, and I hope that today’s action brings that fact home to the Russian businesses and oligarchs that seek to continue their operations.’

Report suggest Russian airlines have weeks to orchestrate alternative supplies of banned aircraft parts or start grounding jets to avoid safety concerns as Western sanctions following Russian’s invasion of Ukraine threaten their post-Soviet revival.

Moscow took a first step this week towards keeping its commercial fleet flying by allowing its airlines to re-register leased planes in Russia, giving local authorities direct control over the certificates of airworthiness needed for each jet.

Abramovich made his fortune buying up discounted state assets after the collapse of the Soviet Union and was one of the oligarchs that make up Russia’s wealthy elite. The West has imposed sanctions on them in an attempt to put pressure on Vladimir Putin

Western analysts say airlines may start stripping some of Russia’s 500 foreign-leased jets within weeks or even days for parts while shopping around for genuine, but resold, parts from countries such as China.

Boeing said earlier this month it was suspending parts, maintenance and technical support for Russian airlines.

The Commerce Department’s Bureau of Industry and Security said since March 2, based on publicly available information, it ‘identified a number of commercial and private flights from third countries to Russia’ and could add more planes as it continues its review.

Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod said the ‘action lets Vladimir Putin’s enablers know that, as a consequence of their actions, they have fewer places to hide and fewer ways to get there.’

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