Bashar al-Assad’s central financial institution airlifted round $250mn in money to Moscow in a two-year interval when the then Syrian dictator was indebted to the Kremlin for navy assist and his family had been secretly shopping for belongings in Russia.
The Monetary Instances has uncovered information displaying that Assad’s regime, whereas desperately wanting overseas forex, flew banknotes weighing almost two tonnes in $100 payments and €500 notes into Moscow’s Vnukovo airport to be deposited at sanctioned Russian banks between 2018 and 2019.
The bizarre transfers from Damascus underscore how Russia, a vital ally to Assad that lent him navy assist to delay his regime, turned one of the vital necessary locations for Syria’s money as western sanctions pushed it out of the monetary system.
Opposition figures and western governments have accused Assad’s regime of looting Syria’s wealth and turning to prison exercise to finance the struggle and its personal enrichment. The shipments of money to Russia coincided with Syria changing into depending on the Kremlin’s navy assist, together with from Wagner group mercenaries, and Assad’s prolonged household embarking on a shopping for spree of luxurious properties in Moscow.
David Schenker, who was US Assistant Secretary of State for Close to Japanese Affairs from 2019 to 2021, mentioned the transfers weren’t shocking, on condition that the Assad regime frequently despatched cash in a foreign country for “a mixture of securing their ill-gotten positive factors and Syria’s patrimony overseas”.
“The regime must convey their cash overseas to a protected haven to have the ability to use it to acquire the superb life… for the regime and its inside circle,” he mentioned.
“Russia has been a haven to the Assad regime’s funds for years,” mentioned Eyad Hamid, senior researcher on the Syrian Authorized Growth Programme, noting that Moscow turned a “hub” for evading western sanctions imposed after Assad brutally put down an rebellion in 2011.
Assad’s escape to Moscow as rebels closed in on Damascus has even enraged some former regime loyalists, who see it as proof of Assad’s overriding self-interest.
His shaky rule had been propped up by Iran and its proxy militant teams, which had intervened in 2012, and Russia, which introduced its warplanes to bear down on what remained of the Syrian rebels and Islamist insurgents in 2015.
Syria’s relations with Moscow deepened dramatically as Russian navy advisers bolstered Assad’s struggle effort and Russian firms turned concerned in Syria’s useful phosphate provide chain. “The Syrian state could possibly be paying the Russian state for a navy intervention,” mentioned Malik al-Abdeh, a London-based Syrian analyst.
The Assad regime moved bulk shipments of US and euro banknotes into Russia between March 2018 and September 2019.
Russian commerce information from Import Genius, an export knowledge service, present that on Might 13 2019, a aircraft carrying $10mn in $100 payments despatched on behalf of Assad’s central financial institution landed in Moscow’s Vnukovo airport.
In February 2019 the central financial institution flew in round €20mn in €500 notes. In whole there have been 21 flights from March 2018 to September 2019 carrying a declared worth of over $250mn.
There have been no such money transfers between Syria’s central financial institution and Russian banks earlier than 2018, in line with the information, which begin in 2012.
An individual aware of Syrian central financial institution knowledge mentioned overseas reserves had been “nearly nothing” by 2018. However as a result of sanctions, the financial institution did need to make funds in money, they added. It purchased wheat from Russia and paid for cash printing providers and “defence” bills, the particular person mentioned.
They added that the central financial institution would pay in line with “what was accessible within the vault”. “When a rustic is totally surrounded and sanctioned, they’ve solely money,” the particular person added.
Russian information present that common exports from Russia to Syria — similar to shipments of safe paper and new Syrian banknotes from the Russian state-owned printing firm Goznak, and consignments of substitute Russian navy parts for Syria’s Ministry of Defence — passed off within the years earlier than and after the massive quantity of banknotes had been flown to Moscow.
However there isn’t any report of the 2 Russian lenders that acquired the banknotes from Damascus in 2018 and 2019 taking another shipments of bulk money from Syria or another nation over a ten-year interval.
Even with Syria’s state coffers wrecked by struggle, Assad and his shut associates over the previous six years seized private management of crucial elements of the nation’s devastated financial system, mentioned folks with perception into the regime’s workings.
First woman Asma al-Assad, an ex-JP Morgan banker, constructed a strong place influencing worldwide support flows and heading a secretive presidential financial council. Assad and his acolytes additionally generated revenues from worldwide drug trafficking and gas smuggling, in line with the US.
Hamid, of the Syrian Authorized Growth Programme, mentioned that “corruption below Assad was not a marginal affair or a facet impact of the battle. It was a method of presidency.”
Syrian money transfers had beforehand elicited sanctions from Washington. The US Treasury in 2015 accused former Syrian central financial institution governor Adib Mayaleh and a central financial institution worker referred to as Batoul Rida of facilitating bulk money transfers for the regime to Russia, and managing fuel-related offers to lift overseas forex. Rida was additionally accused by the US of attempting to acquire the chemical ammonium nitrate from Russia, which is utilized in barrel bombs.
Information present the money delivered to Moscow in 2018 and 2019 was delivered to Russian Monetary Company Financial institution, or RFK, a Russian lender based mostly in Moscow managed by Rosoboronexport, the Russian state arms export firm.
The US Treasury sanctioned the financial institution this 12 months for facilitating money transfers, enabling “thousands and thousands of {dollars} of illicit transactions, overseas forex transfers, and sanctions evasion schemes for the advantage of the Syrian authorities”.
In March 2018 information present Syria’s central financial institution additionally shipped $2mn to a different Russian financial institution, TsMR Financial institution, which has additionally been sanctioned by the US.
As Russian monetary establishments had been receiving money from Syria, Assad’s different worldwide backer, Iran, arrange schemes to funnel arduous forex to the beleaguered regime. Assad’s key cash males took necessary positions in these firms, in line with company information analysed by the FT.
Yassar Ibrahim, Assad’s closest financial adviser, is a shareholder in a Lebanese firm referred to as Hokoul SAL Offshore, alongside his sister Rana, who has additionally been sanctioned by the US.
Hokoul, in line with the US Treasury, is directed by Iran’s Revolutionary Guard Corps-Quds Drive and Lebanese militant group Hizbollah to maneuver a whole lot of thousands and thousands of {dollars} “for the advantage of the brutal Assad regime”. Ibrahim’s position within the firm has not beforehand been reported.
Whereas the cordon of western sanctions pressured the regime out of the greenback banking system, company information analysed by the FT present that key Assad lieutenants continued to maneuver belongings into Russia.
In 2019 the FT reported that Assad’s prolonged household had from 2013 purchased no less than 20 luxurious flats in Moscow utilizing a fancy sequence of firms and mortgage preparations.
And as lately as Might 2022 Iyad Makhlouf, Assad’s maternal cousin and a serious in Syrian Normal Intelligence, which allegedly monitored, oppressed and murdered residents, established a property firm in Moscow co-owned by his twin brother Ihab referred to as Zevelis Metropolis, Russian company information present.
Iyad’s brother Rami Makhlouf was the regime’s most necessary businessman, at one level believed to regulate over half of Syria’s financial system by way of an internet of firms together with cell phone community SyriaTel. However after Rami fell out of favour with the regime in 2020, Syrians with perception into the regime say Iyad and Ihab remained near Bashar and his spouse Asma.
Company filings present that Zevelis Metropolis was established by a feminine Russian worker of the US sanctioned Syrian-Russian banker Mudalal Khoury, who has been accused by the US of facilitating massive actions of cash from Syria to Russia on behalf of the Assad regime.
Khoury seems to have performed a pivotal position in embedding regime pursuits in Russia’s monetary system, and in 2015 the US Treasury mentioned Khoury “has had an extended affiliation with the Assad regime and represents regime enterprise and monetary pursuits in Russia”.
Schenker mentioned that given the strain Assad had confronted from western governments, particularly the US, for greater than a decade, “Assad all the time knew that he would by no means be acceptable firm in, say, Paris.
“He wasn’t going to be shopping for house buildings there, however he additionally knew that if this was going to finish, it was going to finish badly. So that they had years to attempt to spirit away cash, to arrange techniques that had been going to be dependable protected havens.”
