The Russian invasion of Ukraine is likely to continue if Donald Trump is re-inaugurated as president. And so will the sanctions against the Russian oligarchs. A recent report in the Swiss NZZ highlights a glaring contradiction in the US approach to tracking down Russian oligarch assets. While US politicians have criticized Switzerland for its alleged laxity in enforcing sanctions against Russia, they appear to overlook similar practices within their own borders.
The focal point of the critique revolves around the 300 million dollar luxury yacht “Amadea” owned by oligarch Suleiman Kerimov, sanctioned by the US in June 2022 and currently docked in San Diego Bay. This case exemplifies the broader issue of the US harboring assets linked to Russian oligarchs, similar to the accusations levied against Switzerland.
Switzerland has often been viewed by American officials as a reluctant participant in international efforts to seize Russian assets despite improvements in its compliance measures over the years. However, states such as South Dakota, Wyoming, Delaware, Alaska, and Nevada in the US provide fertile ground for Russian oligarchs to conceal their wealth through complex corporate structures and trusts, highlighting an apparent double standard in the US’s stance.
The US has long been a destination for Russian money, with oligarchs taking advantage of opaque legal structures to establish entities like the Heritage Trust in Delaware. This trust was specifically set up to manage Kerimov’s American assets, using elaborate legal arrangements and shell companies to obscure his involvement. These assets were actively managed by American firms until they were frozen in 2022, illustrating the sophisticated means employed to skirt sanctions and oversight.
The issue is not confined to Kerimov. Many wealthy Russians have exploited these American “privacy states” to safeguard their assets, a practice that has been relatively easier in the US than in countries like Switzerland or Singapore, according to a Zurich lawyer cited in the report.
The irony of the situation is not lost as the US Treasury Department, in a stark turnabout, recently labeled these tax havens as “notorious privacy states” in its latest money laundering report. This acknowledgment comes despite previous denials from US judicial authorities about the existence of such tax havens as Delaware.
The influx of Russian capital into the US began well before the current geopolitical tensions, tracing back to the early 2010s when political disillusionment prompted an exodus of wealth-seeking democracy and security in the West. This movement was accelerated by the availability of “golden passports” in jurisdictions like Cyprus, Malta, or Dubai, enabling oligarchs to rebase their assets and, in some instances, their identities.
This report calls into question the consistency and effectiveness of US policies regarding the enforcement of sanctions against Russian oligarchs and casts a critical light on the global challenge of regulating and tracking oligarch wealth.
