New Ukraine Sanctions Target Business Interests of Russian-Uzbek Billionaire Usmanov – The Diplomat

A brand new raft of U.S. sanctions associated to the Russian warfare in Ukraine take additional purpose at Russian-Uzbek billionaire Alisher Usmanov. Usmanov, whose estimated internet value is round $19.5 billion, was focused personally with sanctions quickly after the Russian invasion of Ukraine, however his companies largely escaped sanctions till now.

In saying the brand new sanctions, the U.S. Treasury Division mentioned that “Usmanov has at his disposal a large community of companies in monetary protected havens and relations by way of which to conduct monetary transactions, enabling him to doubtlessly circumvent sanctions.”

Usmanov reportedly has comfortable relations with each Russian President Vladimir Putin and Uzbek President Shavkat Mirziyoyev. Usmanov has been known as one among Putin’s “favourite oligarchs.” On the identical time, he has shut ties to Mirziyoyev. In 2017, Mirziyoyev flew on Usmanov’s personal aircraft to attend the United Nations Normal Meeting in New York.

On February 28, the EU froze the belongings of and imposed journey bans on a listing of “oligarchs,” together with Usmanov. The USA adopted, designating Usmanov personally for sanctions in early March 2022 and placing blocks on his superyacht, Dibar, and his aircraft, an Airbus A340-300 with the tail-number M-IABU, which it famous “is likely one of the largest privately owned planes in Russia and was beforehand leased out to be used by Uzbekistan’s president.”

The U.S., nevertheless, approved “all transactions and unblocking all property of any entity owned 50 p.c or extra, instantly or not directly, by Usmanov, that doesn’t seem on” the U.S. Treasury Division’s Workplace of Overseas Asset Management’s Specifically Designated Nationals (SDN) record. At that juncture, whereas Usmanov was personally topic to sanctions by the U.S. his companies weren’t.

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Usmanov has important pursuits within the metals and mining, telecommunications, and knowledge know-how sectors by way of USM Holdings, by which he has a 49 p.c stake. On the time of the preliminary sanctions, Metalloinvest — one among USM’s most vital firms and a significant metal producer — famous that the sanctions wouldn’t have an effect on the corporate. 

Usmanov’s supporters within the Uzbek authorities reportedly lobbied their European counterparts to raise the sanctions. Because the Monetary Instances reported in November 2022, “Uzbekistan is lobbying the EU to raise sanctions on Alisher Usmanov and his sister because the Uzbek-Russian billionaire struggles to disentangle himself from the fallout of Moscow’s warfare in Ukraine.” The report acknowledged that Uzbek officers had used latest conferences with EU officers to boost Usmanov’s case. These efforts didn’t yield success, nevertheless. 

And now new sanctions within the U.S. and U.Okay. goal Usmanov’s companies instantly, together with Metalloinvest. On April 12 the U.S. State Division issued a reality sheet beneath the headline “Additional Curbing Russia’s Efforts to Evade Sanctions and Perpetuate its Warfare towards Ukraine,” which outlined the brand new sanctions. They now designate USM Holdings instantly, in addition to quite a lot of its constituent entities, a lot of that are based mostly in Russia, like Metalloinvest and Megafon, one among Russia’s largest telecoms, however not less than one firm based mostly in Uzbekistan. 

The brand new sanctions additionally designate a bunch of latest people. Some are executives with ties to Usmanov and his community of enterprise pursuits, and others are relations: notably a sister and a step-son. The brand new sanctions make clear a regular, however sneaky, observe of transferring enterprise or funds within the names of wives or sisters to flee discover: 

Uzbekistan nationwide Shokhrukh Olimdjonovich Nasirkhodjaev (Nasirkhodjaev) is the CEO of Hamriyah Metal FZC, a United Arab Emirates-based firm designated as we speak by the Division of State. OFAC additionally designated Nasirkhodjaev’s spouse, Uzbekistan nationwide Nasiba Erkinovna Narzieva (Nasiba), and Nasiba’s mom, Uzbekistan nationwide Saodat Burxanovna Narzieva (Saodat). Saodat is Usmanov’s sister. 

Usmanov has added Saodat to quite a lot of his financial institution accounts and has despatched her hundreds of thousands of {dollars} over time. Saodat has transferred hundreds of thousands of {dollars} to each Nasirkhodjaev and Nasiba. Saodat has additionally been sanctioned by the UK.

The November 2022 Monetary Instances report about Tashkent’s efforts to get Usmanov off the sanctions hook cited an announcement from the Uzbek Embassy in Brussels, which known as Usmanov one among Uzbekistan’s “most well-known residents” and famous that “[i]t is tough to establish areas by which Mr Usmanov has not helped his homeland.” Whereas the assertion emphasised Uzmanov’s philanthropy, it additionally satirically underscored the intense dangers Uzbekistan perceived in his being focused for sanctions.

One of many story’s reporters, Marc Filippino, defined in a podcast concerning the report that “Uzbek officers argue the sanctions have restricted the billionaire’s capacity to take a position a few of his fortune in his delivery nation.” Additionally they put his current investments there in danger, as the brand new sanctions illustrate.

Because the begin of the warfare in Ukraine, a significant concern amongst Central Asian governments has been the potential for secondary sanctions given the area’s deep financial integration with Russia. Kazakhstan and Uzbekistan, particularly, fear about being accused of aiding Russia in circumventing sanctions and being focused with secondary sanctions in consequence. The Usmanov case is exclusive in some methods, given his extraordinary wealth and highly effective connections in each Uzbekistan and Russia, however on the identical time it serves additionally for instance the very interwoven nature of enterprise pursuits throughout the previous Soviet Union.