Funding his war machine: The three firms are under US sanctions for allegedly providing petroleum supplies to President Bashar al-Assad’s regime that were likely to be used by his military, including aviation fuel
Assad used Panama law firm to get round international sanctions by setting up shadow companies to help fund his war
‘his UK fixer bought £6million of luxury flats’
Assad’s money trail …
- Three Syrian firms were hit with punitive measures after outbreak of war
- But they used shadow firms in the Seychelles to ‘circumvent’ sanctions
- Law firm Mossack Fonseca also worked for Assad’s cousin Rami Makhlouf
- Makhlouf was described in US cables as Syria’s ‘poster boy for corruption’
- HSBC lobbied Mossack Fonseca to keeping working with Makhlouf
- Assad’s UK fixer Soulieman Marouf bought six London with offshore firms
Syrian president Bashar al-Assad and his wife Asma walk through Paris on a visit in December 2010
Syrian President Bashar al-Assad was able to dodge international sanctions and help fund his war by setting up shadow companies in the Seychelles, it was reported today.Three Syrian firms were hit with punitive measures by the U.S. for allegedly supplying fuel to the regime.
But they used Panama law firm Mossack Fonseca to create shadow firms as ‘a way for the Syrian regime to circumvent international sanctions’, according to French newspaper paper Le Monde.
The claims are the latest to emerge in the Panama Papers which named the firms as Pangates International, Maxima Middle East Trading and Morgan Additives Manufacturing.
Syrians inspect a collapsed building following reported air strikes by Syrian government forces on the rebel-held part of Allepo, last year.
Leaked files revealed that President Bashar al-Assad was able to dodge international sanctions and help fund his war by setting up offshore shadow companies
Since the start of Syria’s war in 2011, tens of thousands of people have been killed and thousands of homes destroyed in air raids and barrel bomb strikes.
Le Monde said the leaked files show Mossack Fonseca continued to work with at least one of the companies, Pangates, until at least nine months after the sanctions were announced in July 2014. Pangates belongs to the Damascus-based Abdulkarim group, which is close to the Syrian government, Le Monde said. The probe, coordinated by the International Consortium of Investigative Journalists, has exposed a tangle of financial dealings by global elites.
Assad’s billionaire cousin Rami Makhlouf, who is facing sanctions, was also shown by the leaks as long having registered companies in tax havens.
Syria’s most notorious and powerful tycoon, Makhlouf founded shadow companies such as Drex Technologies SA, which was registered in the British Virgin Islands in 2000 and which it took Mossack Fonseca a decade to grow concerned about, Le Monde reported.
Documents show Mossack Fonseca worked with Assad’s cousin, Makhlouf, who has been described in U.S. diplomatic cables as Syria’s ‘poster boy for corruption’.
In February 2008, U.S. Treasury officials flagged Makhlouf as a ‘regime insider’ who ‘improperly benefits from and aids the public corruption of Syrian regime officials.’
They froze his U.S. assets and banned American firms or people working with him then blacklisted some of his companies later that year. However, the leaked files reveal that Mossack Fonseca continued to work with Rami Makhlouf and his brother, Hafez, who had also been blacklisted by the U.S. in 2007.
Documents show Mossack Fonseca worked with Assad’s cousin, Rami Makhlouf (pictured), who has been described in U.S. diplomatic cables as Syria’s ‘poster boy for corruption’
The firm’s e-mails at the time did not mention the sanctions and in January 2011 it dismissed the advice of its own compliance team which said it should sever ties with the family. According to The Guardian, the compliance officer wrote: ‘I believe if an individual is found on a sanction list then this is a serious red flag and we should make every effort to disassociate ourselves from them.’
But one of Mossack Fonseca’s partners, Chris Zollinger, reportedly resisted over concerns the company would lose business. They wrote that ‘there are allegations (rumours), but not any facts or pending investigations or indictments.’
He made reference to a colleague’s previous notes from a conversation between Mossack Fonseca and British bank HSBC that served as Makhlouf’s financial manager. In the notes, HSBC assured the law firm that the bank’s London and Geneva offices ‘know about Mr Makhlouf and that they are comfortable with him.’
According to ICIJ, Mr Zollinger said that if HSBC didn’t have an issue with him ‘then I think we can also accept him.’
However, he ultimately agreed with dropping the firm after further discussions with colleagues and growing investigations into Makhlouf’s business empire. Zollinger recently told Süddeutsche Zeitung: ‘In retrospect, my comment in the e-mail was wrong, which I regret.’
Soulieman Marouf used offshore firms to buy luxury properties in the UK
He added that Mossack Fonseca had ‘no influence on the transactions or the business of the company’ linked to Makhlouf. Mossack Fonseca was not legally obliged to comply with US sanctions. It did, however, have an obligation to respond to EU measures imposed in May 2011 that were extended to the British Virgin Islands (BVI) in the June of that year. But it took until September 2011 before Mossack agreed to resign from Makhlouf’s companies. It meant Makhlouf was able to keep his Swiss bank accounts open throughout the start of the Syrian war.
HSBC said: ‘The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicised reforms implemented over the last few years.
‘We work closely with the authorities to fight financial crime and implement sanctions.’
Mossack Fonseca denies any wrongdoing.
A spokesman told ICIJ that the firm relies on intermediaries such as banks and other law firms to review the backgrounds of the customers that are referred to them.
He added: ‘Likewise, we have our own procedures in place to identify such individuals, to the extent it is reasonably possible.’
Assad’s London fixer uses offshore firms to hold luxury London flats including a £1m flat in St George Wharf in Vauxhall (pictured)
The time it takes to resign varies by jurisdiction, the spokesman said, and some authorities require the agent to remain in place to prevent interference with an investigation.President Assad’s UK fixer bought £6million of luxury flats in London with cash siphoned through offshore firm. President Assad’s UK fixer used offshore companies to buy at least six flats in London worth nearly £6million, it has emerged.
Businessman Soulieman Marouf bought a portfolio of homes across the capital through companies in the tax haven of the British Virgin Islands (BVI), according to the leaked Panama Papers.
They included a £1m riverfront flat in St George Wharf in Vauxhall, a £1.2m apartment at the Norman Foster-designed Albion Riverside building in Battersea and a £1.3m home in St John’s Wood. Marouf made headlines in 2012 when it emerged he carried out shopping errands for Assad’s wife, Asma, buying goods worth thousands of pounds from Armani and Harrods as the civil war ripped Syria apart.
In October of that year, his assets were frozen in Europe, with the sanctions notice describing him as as a supporter of the Syrian regime and ‘close to President al-Assad’s family’.
The order meant he could not deal with his London flats without a licence, but his lawyer said the permits were ‘obtained when required’ from the Treasury. His name was removed from the EU blacklist in 2014 after getting backing from then foreign secretary William Hague.
Restrictions have now been lifted and he continues to invest in UK property. He has since registered two new companies in the British Virgin Islands, named after London addresses
The Panama legal firm at the heart of a massive data leak kept clients who were subject to international sanctions, documents show.
In November 2014, his offshire company acquired a £500,000 flat at 59 Regent Court in St John’s Wood.
A lawyer for Marouf told The Guardian: ‘There are a number of reasons for utilising offshore companies, including the desire for privacy.
‘Full disclosure has been given to [the] Treasury and/or HMRC [Revenue & Customs] and the UK tax authorities have acknowledge that these companies are compliant with UK tax laws.
‘The UK authorities are fully aware that our client is the beneficial owner of these companies.’
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