The recent legal action by Russian multi-billionaire Alisher Burkhanovich Usmanov against UBS Europe SE in Frankfurt am Main has brought attention to allegedly absurd money laundering reports. Usmanov’s lawsuit centers on allegations that UBS Germany made over a dozen “illegal reports” to the German FIU from 2015 to 2018, which flagged “allegedly suspicious transactions,” are claimed to have triggered criminal investigations against Usmanov.
Background of the Lawsuit
Usmanov, a prominent figure in Russia’s metal and telecommunications industries with an estimated wealth of €13 billion, has filed a lawsuit against UBS Europe SE. This case follows his placement on the European Union’s sanctions list due to his close ties with Russian President Vladimir Putin and his support of Russia’s destabilization policies in Ukraine. These sanctions were accompanied by extensive investigations in Germany on suspicions of money laundering, particularly linked to his properties, including a house on Lake Tegernsee, and his account with UBS’s German subsidiary.
Read our reports on Alisher Usmanov here.
Legal Representation
Usmanov’s case is being handled by the Munich-based law firm Gauweiler & Sauter. The legal team is led by Peter Gauweiler and Stefanie Rabenau. Gauweiler, a well-known figure in German politics and law, previously represented media entrepreneur Leo Kirch in a landmark case against Deutsche Bank, securing €900 million in damages. Gauweiler has also been active in legal challenges against the European Central Bank’s euro rescue measures.
Accusations Against UBS
Usmanov’s lawsuit centers on allegations that UBS Germany made over a dozen “illegal reports” to the Financial Intelligence Unit (FIU) of the General Directorate of Customs from 2015 to 2018. These reports, which flagged “allegedly suspicious transactions,” are claimed to have triggered criminal investigations against Usmanov. The Frankfurt General Prosecutor’s Office subsequently opened a money laundering investigation, leading to high-profile searches and contributing to Usmanov’s sanctioning.
In 2015, UBS had offered Mr. Usmanov its services as an international bank for the purpose of setting up and managing his accounts in Germany. However, between 2018 and 2022, the bank then filed more than a dozen so-called money laundering reports – some of them completely absurdly on the occasion of regular rent payments or ordinary cash withdrawals. The claims asserted in the lawsuit are based on multiple violations of the banking contract (Sections 280 I, 241 II of the German Civil Code) and unauthorized actions by the bank and its responsible bodies in connection with the transmission of the above suspicious reports (§§ 823 II BGB in conjunction with § 186 StGB; § 823 para. I in conjunction with Art. 1 I, 2 I GG).
Press release Gauweiler & Sauter (link)
Legal Developments
According to a press release from Gauweiler & Sauter, the Frankfurt Regional Court ruled on May 13, 2023, that the investigative measures against Usmanov were “unlawful in their entirety.” Usmanov’s legal team argues that the actions taken by UBS and the subsequent investigations unjustly exposed him to public scrutiny and sanctions, causing significant personal and financial damage.
Implications
This lawsuit not only highlights the ongoing tensions between Western financial institutions and sanctioned Russian entities but also underscores the complexities of navigating legal and regulatory frameworks in international finance. The outcome of this case could have far-reaching implications for how financial institutions handle transactions and reports involving high-risk clients.
As the legal proceedings unfold, the case of Alisher Usmanov versus UBS Europe SE will be closely watched for its potential impact on the financial and legal landscape, particularly concerning the responsibilities and liabilities of banks in their reporting practices.
