Alisher Usmanov’s assets may be out of reach of sanctions regime

Ex-Arsenal shareholder claims millions of pounds of his assets are in irrevocable trust

Alisher Usmanov, the Russian oligarch once said to be the UK’s richest person, claims to have placed hundreds of millions of pounds of his assets into an irrevocable trust, potentially leaving them outside the sanctions regime established by western governments.

The tycoon – a former 30% shareholder in Arsenal football club who has also ploughed millions into sponsoring Everton and is subject to sanctions – can today be revealed as connected to at least six luxury UK properties and one central London office building, collectively worth more than £170m and held via a complex web of offshore companies and family members.

The list of assets linked to Usmanov has been compiled by the Russian asset tracker, a partnership involving the Guardian, the Organized Crime and Corruption Reporting Project (OCCRP) and other international news organisations that are reporting on the wealth of Russia’s most powerful operators.

The project has also found evidence that the oligarch has:

  • Close relatives who are named as the owners of luxury properties in countries including Italy, Germany and Latvia.

  • The use of a $350m private jet and a helicopter deregistered from the Isle of Man on the day Usmanov was sanctioned by the UK, plus another now deregistered from Luxembourg, the LX-VIP.

  • A 512ft, $600m private yacht called Dilbar, along with a concession to moor the vessel until 2036 in Barcelona port, which is thought to be worth about $20m.

The Russian asset tracker serves as a snapshot in time, and includes assets only where reporters have seen documentary evidence or other reliable information linking them to those under sanctions.

The purpose of the Russia sanctions is to punish those accused of supporting the Putin regime from enjoying their wealth. The complicated structures under which assets linked to Usmanov are held shows how difficult they are to enforce.

In response to questions from the Guardian about the ownership of these luxury assets, a spokesperson for Usmanov revealed that most of the billionaire’s UK properties, as well as his yacht, had been “long ago transferred into irrevocable trusts”.

He added: “From that point on, Mr Usmanov did not own them, nor was he able to manage them or deal with their sale, but could only use them on a rental basis. Mr Usmanov withdrew from the beneficiaries of the trusts, donating his beneficial rights to his family.”

Data from UK and offshore registries had previously appeared to show Usmanov’s assets as held by companies and trusts that he controlled.

An irrevocable trust cannot be altered without the permission of beneficiaries. The individual who puts the assets into the trust – called a grantor - in effect removes their ownership rights to the assets. Irrevocable trusts are generally set up to minimise taxes or protect assets.

Usmanov’s spokesperson would not reveal exactly when the irrevocable trust had been established, or give its name or jurisdiction, and he would not say when Usmanov withdrew from the list of beneficiaries, or if those moves had been triggered by the threat of sanctions.

However, he implied that the trust now ultimately owned Usmanov’s Beechwood House in Highgate, north London, worth an estimated £48m, and his £34m 16th-century Sutton Place estate in Surrey. Both properties were cited by the UK government when it announced this month that it was freezing Usmanov’s assets.

Sutton Place is owned by Delesius Investments Limited and Bacerius Investments Limited, which are both incorporated in Cyprus, while Beechwood House is owned by Isle of Man-based Hanley Limited, according to Land Registry records.

Experts suggested UK authorities would struggle to use the current sanction regime on families of individuals who had been subject to sanctions, even if they believed any rules were being breached.

James Birkett, a sanctions expert at the business intelligence firm Alaco, said: “The challenge would be identifying and evidencing these relationships [between the sanctioned individual and family members and associates] – both given the Office of Financial Sanctions Implementation’s (OFSI) well-known capacity constraints and the ability to obfuscate the ownership of assets via offshore structures.

“It is likely that such a move would be subject to legal challenge and OFSI would want to be pretty sure it could avoid the embarrassment of being required to reverse its decision ... Nobody is really going after family members yet. It would be a step-change in how the programmes have been applied.”


Simon Goodley

The GuardianTramp

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