Spotlight 30: Oligarchs and sanctions
Is sanctioning an oligarch enough to prevent their business?
In memory of Esther Hauser
Hi and welcome back to the 30th issue of Spotlight (a very special issue to us), a fortnightly collection of news, articles, and events about organised crime and corruption curated by Firm UK.
Every two weeks a collective of experts, academics, and volunteers will select a few relevant articles and/or events that will help you to understand our society under the hood.
It is been 42 days since Russia invaded Ukraine in late February: since then, we have digested a lot of news (and opinions). An OCCRP report covers how sanctions against Russian oligarch Alisher Usmanov might not be sufficient to prevent his activities.
We also suggest an analysis discussing why Latin America is home to some of the most violent cities.
We hope you enjoy Spotlight. And if you like it, please share it with your network and invite them to subscribe.
Thank you!
Revealed: ships may dump oil up to 3,000 times a year in Europe’s waters
Up to 3,000 cases of oil dumped by commercial ships may be happening every year in European waters, according to a new investigation by Lighthouse Reports, a European non-profit newsroom, which found the scale of illegal “bilge dumping” is likely to be far higher than publicly acknowledged. Bilge dumps do not tend to receive the same attention as large industrial spills because they are smaller and less visible but experts argue the frequency with which they are happening is having a big effect on marine life.
Dealing with this oily wastewater – by treating it to remove pollutants or by offloading it at the port – is expensive. To cut down on operational costs, some ships simply dump it directly into the ocean, where it can pose a serious threat to marine life. Even if countries identify potential illegal bilge dumping in their waters, they do not have to disclose what action is subsequently taken.
Maja Markovčić Kostelac, executive director of the European Maritime Safety Agency (EMSA), said:
“Illegal discharges of oil and other polluting substances still regularly occur in European waters, albeit the number of detections, as well as the number of prosecutions, remains low.”
Sanctioning an Oligarch Is Not So Easy: Why the Money Trail of Alisher Usmanov, One of Russia’s Wealthiest Men, Is Difficult to Follow
In response to the Russian invasion of Ukraine, Russian oligarch Alisher Usmanov — one of the world’s 100 wealthiest people — has been sanctioned by the United States, the United Kingdom, and the European Union.
Using information from several large leaks of financial documents and data, including Suisse Secrets, the Panama Papers, and FinCEN Files, reporters from OCCRP and the Guardian have pieced together a partial picture of how Usmanov has hidden his assets in secretive havens like Cyprus, Bermuda, and the British Virgin Islands — and how his money continued to flow through offshore entities for years, even as government officials made inquiries and banking institutions raised red flags about its hidden origins and signs of possible money laundering. This long-read article reports on some aspects of this picture.
For example, OCCRP has investigated Saodat Narzieva is a 56-year-old obstetrician and gynaecologist who lives in Uzbekistan. Her lifestyle is unusually chic for a Uzbekistani doctor. In fact, she is the sister of Alisher Usmanov. Narzieva is listed as the beneficial owner of 27 Swiss bank accounts through which billions of dollars have passed over the years.
Her lifestyle is an example of the kind of luxury accessible to oligarchs’ relatives. But her riches — and those Swiss bank accounts in particular — are also evidence of how even highly-respected Western banks can help obscure the connections between oligarchs and their money.
“All of Mr. Usmanov’s businesses have been audited by Big 4 [audit] companies, since their inception, as well as were his personal tax returns and expenses,” his press service wrote. “All of his investments, his expenses and his income have gone through strict compliance procedures.”
Why Does Latin America Dominate the World's Most Violent Cities List?
Mexico has long dominated the most violent cities list, consistently posting a greater number of urban centres than any other country. The top eight cities - also in the 2021 ranking - are all in Mexico, and the region posted a total of 38 cities on the list, compiled each year by Mexico's Citizens' Council for Public Security and Criminal Justice (Consejo Ciudadano para la Seguridad Pública y Justicia Penal - CCSPJP).
The list exposes patterns or clusters that warrant further attention. From the Valle del Cauca department in Colombia claiming three spots to a homicide spike in Mexico's tourist towns, the grim arrival of Ecuador, and the acute concentration of violence in northeast Brazil, InSight Crime dives into the main takeaways from the annual report.
A notable feature of the most violent cities list was the continuing absence of El Salvador and Guatemala. Just like in 2020, Honduras’ two most populated cities – the capital Tegucigalpa and San Pedro Sula – were the only urban centres from Central America to make the list for 2021. The article continues by presenting and discussing some notable data from the list.
Supreme Court Stops New Jersey From Dissolving Watchdog Agency
(also available on the NYT)
New Jersey officials claim that the Waterfront Commission, a product of the “waterfront” era when mobs dominated local wharves and the unions that run them, is obsolete. New York authorities do not agree.
Governor Philip D. Murphy of New Jersey has unilaterally vowed to remove the state representative from the committee by next week. To avoid closure, New York has taken a rare legal action to seek the intervention of the Supreme Court, which has jurisdiction over interstate disputes. The US Supreme Court temporarily suspended New Jersey’s plan to unilaterally shut down institutions that had been guarding busy ports around New York City for nearly 70 years in order to stop the effects of organised crime.
“I will not give up on the fight to protect the interests of New Jersey. The interests of New Jersey have not been fully provided by the Commission, which has run without transparency and has made its usefulness last longer,”
he in a statement.
“We are very pleased with the court’s decision,” said Phoebe S. Solial, a legal adviser to the agency.
Daniel Kinahan will face cartel questions in a US $2 million lawsuit
Irish gangster Daniel Kinahan, considered the head of the cartel/organised crime group with his name, will be questioned in court for the first time on his alleged involvement in international drug-smuggling, money-laundering and gangland murders after offering to testify in a civil RICO trial in the US.
Boxing manager Moses Heredia is suing Kinahan and boxing promoters MTK Global for US$2 million over the alleged poaching of boxer JoJo Diaz; Heredia’s lawyer Eric Montalvo confirmed Kinahan needs to be heard as part of their case.
Mr Montalvo has alleged in court filings to the District Court in California that "MTK was co-founded and is part-owned and controlled by Mr Daniel Kinahan, a noted member of Ireland's notorious Kinahan Cartel, also known as the Kinahan Organised Crime Group or KOCG.
Mr Montalvo further accused MTK and Kinahan of breaching the Racketeer Influenced and Corrupt Organisations (RICO) Act by using money derived from organised crime activity.
Kinahan offered to testify before the US court, under penalty of perjury, that he is not employed by MTK, the boxing company he founded. If Kinahan is caught in a lie he could face up to four years in state prison as perjury is a felony offence in California.
Keeping Oil from the Fire: Tackling Mexico’s Fuel Theft Racket
A new report by the Crisis Group sheds light on the theft and illicit trade of fuel in Mexico. Known as huachicoleo, fuel theft rackets experienced a spike after 2010, as a consequence of rising fuel prices and other unintended effects of energy reforms and security policies which have attracted organised crime into this domain.
This trend is part of a more general shift in how Mexico’s criminal landscape. In the face of law enforcement’s disruption of the drug trade, criminal groups are now involved in dozens of activities, ranging from extorting local enterprises to human smuggling, following a business model linked to strict territorial control.
Books, podcasts & more
Crime Beyond Borders - The Podcast
Crime Beyond Borders is a podcast series that delves into the cutting-edge research found in the Journal of Illicit Economies and Development (JIED). JIED is open access, peer-reviewed, electronic journal run by the Global Initiative Against Transnational Organized Crime and published by LSE Press
Find the first three episodes:
Episode 1: Brazil
Episode 2: Urban Peace and Illicit Economies
Episode 3: Environmental Impact of Illicit Economies