Real estate of Russian oligarchs could be affected by sanctions – Commercial Observer

As Russia escalates its war on Ukraine, governments battle Russian President Vladimir Poutinecircle of personal allies, with plans to freeze or seize their assets, including bank accounts, yachts and luxury real estate.

The idea is both to put pressure on the oligarchs who support Putin financially, as well as to cut Putin off from reserves as the financial stranglehold on the country deepens.

The United States and many European countries have added Russian billionaires to a list of targeted sanctions. Even neutral Switzerland and Monaco, both known as havens for the money of the global elite, have agreed to freeze Russian assets.

The United States has said it will directly attack assets belonging to Putin’s inner ring. “Next week, we will launch a multilateral transatlantic task force to identify, track and freeze the assets of sanctioned Russian companies and oligarchs – their yachts, mansions and any other ill-gotten gains we can find and freeze under the law. ,” the White House tweeted last Saturday, while announcing its broader economic sanctions against the Russian financial system.

the US Department of Treasurywhich maintains a list of sanctioned individuals and companies through its Office of Foreign Assets Control, has been updating it regularly since last week, adding at least 10 russians with deep ties to Putin.

Some politicians here and in Europe have called for outright seizure. Representing Don Young, a Republican from Alaska, proposed a bill on Monday that would allow the seizure of yachts owned by targeted Russian oligarchs. “Wealthy Russian oligarchs shouldn’t live lavish lives while Putin terrorizes innocent Ukrainians,” he said. tweeted.

CNBC later reported that yachts belonging to Russian oligarchs were movingsome to ports without extradition to the United States or other countries that have agreed to freeze Russian assets.

Nevertheless, even tracking ownership of assets is a time-consuming process, and while the United States can freeze the assets of sanctioned persons, it can only seize them if the assets are linked to criminal activity or if it can be shown to have been purchased with ill-gotten gains. , which can take some time, according to several experts.

However, the president of the borough of Manhattan Marc Levin called on the government to move forward with a list of targeted sanctions and seize assets.

“For years, if not decades, Manhattan was a favorite haven for Russian oligarchs who notably used high-end, ultra-luxury real estate to park their money,” he said. on WNYC Tuesday. “We must stand up now and do our part to fight this immoral war against the Ukrainian people, and that means seizing these assets to put pressure on Putin’s regime.”

Indeed, Manhattan real estate has long been considered a safe haven for foreign money, legal and illegal buyers, Russian oligarchs among them. Manhattan and Miami-Dade were the first two counties to be targeted in the nation’s crackdown on dirty money in real estate several years ago. In 2016, the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued its first Geo-Targeting Order (GTO) for these two counties, requiring transparency on cash real estate transactions above a certain threshold.

FinCEN has since extended the order to 20 countries in total and lowered the threshold to $300,000 for each of them, although it continues to exclude trusts. Target counties now include the five boroughs of Manhattan, Palm Beach and Broward counties in South Florida in addition to Miami-Dade, as well as counties in California, Texas and Illinois. For any transaction that meets the criteria, title insurance companies must report the beneficial owner behind the legal entity that made the purchase.

Emboldened by the GTO data, Congress passed the Corporate Transparency Act in 2021, requiring all companies to disclose the beneficial owner behind business entities. FinCEN is still working on the final implementation of the rules, but it’s about to significantly change the current framework.

If illicit real estate transactions are not limited to Russia and Russians, thanks to a certain man named donald trumpthere has been more scrutiny in the press of Russian silver in these two markets.

Condominium units in Manhattan trump tower were known to have been popular among the Russians and housed a good part of the arms dealers, mafia bosses and an ordinary billionaire with regular money laundering needs. The Washington Post reported that at least 13 people with known or suspected ties to the Russian Mafia, owned, lived or operated from Trump properties.

In 2017, Reuters reported that shoppers with Russian passports bought at least $98.4 million real estate value in Trump-branded buildings in South Florida. However, a third of the units were purchased through untraceable LLCs, so the total was certainly higher.

The spotlight on Trump has served to highlight the larger problem when it comes to money laundering through real estate, likely helping to lead to more scrutiny of the issue.

That governments are going after individual assets has certainly captured the public imagination, with social media users keeping tabs on Russian oligarchs. yachts, private planes and real estate. When a Ukrainian sabotaged the 157-foot-long Lady Anastasia owned by her boss, a Russian businessman Alexander Mikheev, off Mallorca, Spain, many social media cheered.

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