Abramovich made 1.3 billion in suspicious transactions through ING-Amsterdam

Russian oligarch Roman Abramovich has made payments for over 1.3 billion dollars via his bank accounts at ING Amsterdam. Deutsche Bank’s anti-money laundering department reported these payments as suspicious. In 2016, Abramovich sent almost a fifth of his then estimated assets from Cyprus to the British Virgin Islands via ING using round-trip payments.

According to Deutsche Bank, Abramovich’s payments through his ING accounts are indicative of ‘round-tripping’, in which money passes through various companies, banks and jurisdictions. Such transactions can be used to disguise where money has originated from. Since the payments do not serve a clear economic purpose, go back and forth on the same day, and often involve large, round-dollar amounts, Deutsche Bank considers the transactions suspicious.

These payments show up in the FinCEN Files, a leak of more than 2,600 documents from U.S. authority FinCEN, to whom American banks are required to report suspicious transactions. The documents were obtained by BuzzFeed News and shared with 109 media organisations worldwide. In the Netherlands, a team of journalists from investigative journalism platform Investico and newspapers Trouw and Het Financieele Dagblad investigated the leak.

The documents reveal that ING wrote it does not consider Abramovich’s transactions to be suspicious. However, Deutsche Bank reported suspicious payments from one of Abramovich’s companies banking with ING as early as 2013, and in subsequent years continued to report suspicious transactions executed by ING. According to the documents, other American banks also filed reports of suspicious payments being made by Abramovich to the anti-money laundering authority.

Nonetheless, Abramovich was able to continue banking with ING, even after Deutsche Bank raised some critical questions with ING regarding its client. ING responded to Deutsche Bank that the payments return to the same company as the one they were sent from via a series of international transactions: ‘The incoming wire transfer was forwarded via several subsequent intercompany wire transfers within the group of the ultimate beneficial owner, and eventually it was wired back to the original remitter’. The payments continued until at least January 2017.

Unclear why Abramovich has been banking in the Netherlands

It is unclear why Abramovich has been banking with ING in Amsterdam since 2005. To our knowledge, there is nothing that ties the Russian to the Netherlands. According to a spokesman for Abramovich, the transactions are part of an internal restructuring of his companies and are subject to comprehensive controls. ‘Mr. Abramovich’s financial matters are wholly compliant with international tax laws and regulations’, says the spokesman, ‘any suggestion otherwise is false.’ It is not however clear what kind of restructuring Abramovich refers to. ING does not want to comment on the revelations that have emerged from the leak. Abramovich’s bank accounts were active until at least 2017, but now appear to be inactive.

Nevertheless, international anti-money laundering experts are concerned about Abramovich’s payments through ING. ‘This is exactly the kind of structure that is being used for illegal transactions’, says Louise Shelley, a professor at George Mason University in Virginia who specialises in illicit money flows. The payments went from ING to the Latvian bank Rigensis, only to return to ING on the same day. That is suspicious, she says. ‘Latvia has been the gateway to Europe for black money from Russia for two decades.’

Anti-money laundering expert Graham Barrow stresses that such transactions are costly. ‘Why would a rational businessman send his money around like this? There are no obvious good reasons for this, but many bad ones.’ Barrow also reacted to Abramovich’s response with scepticism, saying that despite the explanation, his payments arouse suspicion. ‘It is still not clear why Abramovich makes the payments in several steps. There is no clear economic reason for that, and these types of “layered” payments are being used by money launderers. Whether this is the case here is not possible to say. That is up to the authorities to investigate.’

‘Friendly face’

Although Abramovich is often considered the ‘friendly face’ of Putin’s Russia and has been held in high esteem in England as the owner of Chelsea football club, he has also been associated with more dubious practices. In 2016 he applied for a Swiss residency permit, but his application was refused. According to the Swiss Tages-Anzeiger, which draws on research into Abramovich conducted by the federal police, the grounds for refusal were ‘suspicions of money laundering’ and ‘alleged contacts with criminal organisations’. If Switzerland were to grant Abramovich a residency permit, his presence could ‘pose a danger to national security’, writes the Swiss newspaper. Abramovich strongly denies the accusations.

Abramovich has also had problems with his visa renewal in the United Kingdom, The Guardian reported in 2018: since the country tightened its rules in 2015, a visa can be refused if officials believe the applicant’s money has been obtained unlawfully. According to the British newspaper, Abramovich’s visa was not extended at the time.

Abramovich is one of the businessmen who benefited considerably from privatisations after the collapse of the Soviet Union in the early 1990s. According to Mikhail Zygar, author of All the Kremlin’s Men, Abramovich amassed his fortune through several controversial oil deals. Along with business partner Boris Berezovsky, Abramovich also bought oil company Sibneft in 1995 for a pittance of its actual market value. According to a source with considerable knowledge of the case, ING did not investigate the origin of Abramovich’s assets when the bank accepted him as a customer in the early 2000s.

Most of the ‘old’ oligarchs from Yeltsin’s time fell into disfavour during Putin’s rule. Many lost their wealth and fled the country or were imprisoned. Abramovich was one of the few who managed to hold on to his position among the Russian elite and in President Putin’s entourage. According to Tony van der Togt, a Russia expert at Dutch think tank Clingendael, banks should be aware that oligarchs like Abramovich operate as an extension of the Russian state. ‘It is quite possible that Putin will exert influence in the West through oligarchs. When the Russian state’s budget is under pressure, as has been the case for several years, you see that the Russian state makes oligarchs take care of payments abroad. As a bank you have to be wary of that.’