PARIS — “An exceptional stay in the mountains”, promises the 4-star Grand Coeur et Spa, Relais & Châteaux chalet located at the foot of the ski slopes in Méribel, in the south-east of France. Its particularity: It belongs to the company Sogeco whose main shareholder is Elena Timchenko, wife of Gennady Timchenko. The billionaire is considered a close friend of Russian President Vladimir Putin and as such is on the European, American and British lists of frozen assets.

“Gennady Timchenko is a long-time acquaintance of the President of the Russian Federation Vladimir Putin and is widely described as one of his confidants”, indicates the European text.

On the other hand, the first name of his wife does not appear there and the alpine chalet, like its twin establishment belonging to the same company, did not receive any visit from the authorities, indicated the general manager of the two establishments. The echoes.

850 million euros in frozen assets

Until recently, Gennady Timchenko was still presented as the co-president of the economic council of the Franco-Russian Chamber of Commerce and Industry, alongside the CEO of TotalEnergies Patrick Pouyanné, on the organization’s website. The link to the economic council page has since been disabled.

But France has not been idle since the announcement, a month ago, of an arsenal of unprecedented sanctions against Vladimir Putin’s Russia, following the invasion of Ukraine.

In total, 850 million euros of assets belonging to the Russian oligarchs have been frozen on French territory, recently announced the Minister of Economy Bruno Le Maire. This includes 150 million euros in bank accounts and nearly 540 million euros in real estate, divided between around thirty properties or apartments.

France has performed better than many of its European neighbors, but the result is nonetheless modest. Authorities have identified more than 20 villas belonging to the oligarchs on the French Riviera alone – one of the favorite destinations for Russian billionaires who also own property in the French Alps, the heart of Paris or the southwestern coastal region from Biarritz.

“No oligarch will slip through the cracks,” Le Maire told French radio in early March, saying authorities were determined to “strike at the heart of Russian power.”

In the wake of the announcement of the first European sanctions at the end of February, the Minister set up a task force with the mission of identifying in France everything that belongs to blacklisted billionaires, and if necessary, extending the search to spouses, children and blind real estate trusts.

This exceptional hunt mobilizes tax, treasury, financial intelligence and customs officers. The tax administration can in particular cross-reference its real estate files with the FICOBA listing of bank accounts: it is up to them to detect in this mass of data the assets of personalities sanctioned by the EU.

The financial intelligence unit (Tracfin), particularly experienced in tracking down tax evaders and terrorist funders, plays a key role. It is this unit which on February 27 launched a call for vigilance to the banking sector, four days after the start of the invasion of Ukraine, and just before the official implementation of sanctions. The quick action prevented almost 5 billion euros from leaving the territory, according to the Ministry of Economy.

A yacht with seven VIP suites

“Tracfin is the crème de la crème of intelligence,” says lawyer Olivier Dorgans, of the firm Ashurst, recalling that his agents contributed to the arrest of the terrorists of the November 2015 attacks in Paris.

The most spectacular catch to date is that of the Love Vero, Igor Sechin’s yacht. A companion of Vladimir Putin since the 1990s, when the master of the Kremlin was mayor of Saint Petersburg, the boss of the oil giant Rosneft is one of the most influential men in Russia.

It’s a very big catch.

For the French authorities, this is a very big problem. Tracfin managed to identify Sechin behind the company that owns a superyacht that arrived at the yard south of La Ciotat in January. The operation took place on the night of March 2-3. Customs officers boarded the 86-meter-long white vessel which was about to hurriedly set sail as repair work was scheduled until April 1. Once the offense has been established, the vessel could be seized.

But the battle is not yet won. “At this stage, the procedure is only administrative”, specifies Ronan Boillot, national director of the customs coastguard. In the meantime, the yacht with seven VIP suites remains at the dock. Two other less flamboyant ships, Ursa Minor and The Great Bearhave just fallen into the hands of customs officers in Cannes and Antibes.

Gennady Timchenko, Zakhar Smushkin and Igor Sechin in Moscow in 2105

Alexei Druzhinin/Russian PPIO/via Zuma

Maintaining secrecy

The members of the working group are not talkative. Maintaining the secrecy of their operations is one of the conditions of their success. They know they are faced with an army of lawyers scrutinizing the legality of each of their actions and ready to reverse the procedures at the slightest error. “We are dealing with individuals who are not really compassionate,” explains a French official involved. Even if they are weakened, the oligarchs continue to cause fear.

Several ships have managed to slip through the cracks by heading to more welcoming areas such as the Seychelles or the Maldives.

Following the peregrinations of these powerful in the seas of the globe has become a hobby for some Internet users who have become obsessed with sites like MarineTraffic, which allows ships to be tracked in real time thanks to their registration number. But going back to the real owner to allow the grounding of the ship is a real ordeal.

Several operations have been carried out on vessels deemed “worthy of interest”, without leading to confiscations. “We tried to intercept a ship in Saint-Barthélemy, but we could not prove who owned it,” says Ronan Boillot, who also specifies that the yacht season has not yet started in France. “In May and June, these asset freezing measures would have had more impact!”

In the race to track down the assets of the oligarchs, the public authorities have an advantage: sharing information and documents with neighboring countries. An international working group was set up in record time and everyone was invited to play along.

Monegasque banks

Even the Principality of Monaco, where more than 800 Russians live year-round, immediately complied. Just under ten accounts were frozen by Monegasque shores, according to our information, and in the port, where several giants of the seas are currently moored in early spring, the yachts of the oligarchs have disappeared.

“There has been an exemplary application of the measures in Monaco”, assures Michel Hunault, director of Siccfin, the equivalent of Tracfin in Monaco, while refusing to comment on the identity of the people concerned and on the number of properties. seized.

According to several people involved in this international mobilization, some of the first catches in Europe were made possible by the effect of surprise on oligarchs who did not expect to find themselves on the blacklist. But many others had felt the tide turn, especially since the sanctions put in place in 2014 after the Russian invasion of Crimea, and had protected their heritage.

“I doubt that they still have assets, in individual bonds, in French banks,” explains Olivier Attias of the August and Debouzy cabinet.

Networks of intermediary companies, some of which are registered in tax havens, trusts, foundations, use of false names: these methods are well known, especially since they can also be used to hide from the tax authorities.

Cayman Islands not cooperating

“Structures interfere, a trust in Jersey, an empty shell in Cyprus, a company in the British Virgin Islands. Or it’s easier: Astraw man owns the property. It’s as old as the earth and as old as the mafia, ”explains a former senior official of the Ministry of the Economy.

It is much easier to impose a sanction than to apply it.

Lawyer Alexandre Malan, who is familiar with cases related to Russia, agrees: “Behind the speeches of certain States, the reality is that there is little cooperation with the British Virgin Islands or the Cayman Islands for example. “

Danny Glaser of US firm K2 Integrity, which specializes in corporate investigations, compliance and cybersecurity, notes that imposing a sanction is much easier than enforcing it. “Most often – and this applies more to Europe than to the United States – sanctions are seen as a way to express political outrage rather than something that needs to be implemented,” he said. Glaser.

In the same vein, the desire of the French government to transform the asset freezing measures into real expropriation quickly came up against the obstacle of the law. Paris, which wants to be at the forefront of this offensive, has suggested that 70 names be added to the blacklist in order to possibly include the entourage of billionaires.

Local impact

Among the fifty oligarchs under sanctions, there are still some notable absentees. Oleg Deripaska, shareholder of the aluminum production giant RUSSEL via the company En+, is not on the European list while it is on those of the United Kingdom and the United States. The RUSAL factories supply 80% of France’s aluminum needs, which could explain this “oversight”.

Some oligarchs are preparing their response, challenging their placement under sanction and targeting the reasons sometimes vaguely formulated in official documents, according to lawyers.

Cities in the South of France Antibes and Saint-Jean-Cap-Ferrat are starting to feel the effect of banning some Russian billionaires. “Here, on the seaside promenade, you only hear the Russian language spoken, and in the summer, in the Bay of Ants, there are only yachts chartered by them,” says Olivier, a local. who is about to go surfing.

Many locals, who have seasonal contracts of four or six months, are afraid of losing them. “That’s what happened to my daughter,” adds Olivier. “She was supposed to start working as an air hostess on March 1 at Roman Abramovich’s in Cap d’Antibes but then someone called her to tell her there was no need to come.”

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