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Russian businessman circumvents US sanctions

Updated: Feb 25

Gennady Timchenko, the tycoon ally of Vladimir Putin who also would have helped Maduro and PDVSA to circumvent the sanctions imposed by the United States.


By Maibort Petit


Circumventing the sanctions imposed by the United States government is not a task that the Nicolás Maduro regime has undertaken in a single way, on the contrary, there are several ways it uses and several people, institutions and formulas to fulfill its mission, supposedly being one of them - according to sources consulted by Venezuela Politics - businessman Gennady Timchenko, who is the most important independent Russian oil trader in the world and who would have amassed a good part of his fortune in the shadow of Vladimir Putin. The president of Russia, an ally of the Nicolás Maduro regime, would have made the link so that through Timchenko, Petróleos de Venezuela SA can carry out crude sales, mainly in Asian markets.



 

About the Author

Maibort Petit is a Venezuelan writer, researcher and political scientist specialized in Transnational Organized Crime. Based in New York, she works for various Hispanic media outlets and as a consultant for various firms in New York and Washington DC.


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Ties between Timchenko and Putin increased when the latter's youngest daughter, Katerina Tikhonova, married Kirill Shamalov, the son of an old friend of the president, in 2013. The young businessman was gaining importance and his fortune grew exponentially and in just 18 months he bought a large share of Sibur, a major oil and petrochemical processor. The purchase was made thanks to a loan from a bank headed by another longtime Putin associate, and where Shamalov's brother held a senior position. The shares he acquired belonged to Gennady Timchenko and it would have been this who would have influenced the granting of the bank loan that allowed the purchase [1]. The marriage between Katerina and Krill ended in 2018.Sibur , a major oil and petrochemical processor. The purchase was made thanks to a loan from a bank headed by another longtime Putin associate, and where Shamalov's brother held a senior position. The shares he acquired belonged to Gennady Timchenko and it would have been this who would have influenced the granting of the bank loan that allowed the purchase [1]. The marriage between Katerina and Krill ended in 2018.


It should be noted that Gennady Timchenko himself is subject to sanctions by the United States due to the annexation of the Crimean peninsula from Ukraine in 2014 and, furthermore, for his support of pro-Russian separatists fighting against the forces of the Kiev government in eastern Ukraine.


A Time investigation in 2018 on the support secretly provided by Russia to the Venezuelan regime in the launch of the Petro cryptocurrency, established that the advice came in part from a company called Aerotrading, of which there was no information, although it would be referred to as "the largest blockchain consulting company," the technology that makes cryptocurrency possible. Time managed to identify the Russian representatives whom Maduro thanked for helping him create the petro, Druzhkov and Bogorodsky, who met with the president on February 20, 2018 to discuss the preparations for the launch of the cryptocurrency.

“Druzhkov, the younger of the two, seems to be relatively new to the world of cryptocurrencies. He only founded his startup in this field last fall, an online trading house called Zeus Exchange. His partner at that company, a wealthy Russian industrialist and art collector named Sergei Litvin, also does not appear to have prior experience in cryptocurrency. But Litvin is on the executive board of a conglomerate that has been under US sanctions since 2014. The conglomerate, Stroytransgaz, is controlled by one of Putin's oldest friends, billionaire oil trader Gennady Timchenko, who is also subject to US sanctions ”[2].

Who is Gennady Timchenko?

It was on November 9, 1952 that Gennady Nikolayevich Timchenko was born, a Russian billionaire businessman who, according to Bloomberg, is ranked 63, with an estimated fortune of USD 23.9 billion.

He is the founder and owner of the private investment group Volga Group, which specializes in investments in energy, transportation and infrastructure assets. Volga Group is one of the largest investment groups in Russia with consolidated total revenues of all portfolio companies USD 116 billion; 90 thousand workers; investments in 18 major companies, mainly in Russia; its central areas of action are energy, logistics and infrastructure [3]. It was founded in 2007 and the portfolio also includes investments in consumer goods, financial services and real estate projects [4].


 

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Prior to this, he was the owner of Gunvor Group, a Cyprus registered corporation that is one of the world's leading independent commodities trading houses, founded in 2000 as a trading company for crude oil and petroleum products. And while it remains a physical trader at heart, the company has strategically invested in upstream, midstream and downstream assets to create a platform for international expansion. “Today, Gunvor plays an important role in helping smooth global energy markets. We source crude oil and refined petroleum products from more than 100 countries, have strategically located industrial assets around the world, and work with more than 75 global financial institutions, balanced in Asia-Pacific, Americas,

On March 19, 2014, Timchenko sold his 43.5 percent stake in Gunvor to his partner Torbjörn Törnqvis [6]. By November 2014, it became known that the United States Attorney's Office for the Eastern District of New York was investigating Timchenko for money laundering. The Russian businessman reportedly transferred funds related to allegedly corrupt deals in Russia through the US financial system. Guvnor Group bought oil from Russia's Rosneft and sold it to third parties, which was denied by the group through a statement [7].


These operations were carried out a day before Gennady Timchenko was sanctioned by the United States as a result of the annexation of Crimea by Russia. Anticipating such sanctions and their effects, Timchenko said he had sold his stake in Guvnor, but the amount of the transaction was not disclosed.

In October 2020, Timchenko petitioned the Swiss high court to reverse a US Treasury Department freeze on a pair of his bank accounts in the European nation. In September a Geneva court had already rejected his appeal of a decision by local prosecutors to refuse to examine whether the freezing of the accounts was legal. Without further recourse, Timchenko took his case to the Swiss Federal Court. In February, he demanded that one of the banks hand over their records and confirm whether they had been shared with US authorities. The bank refused and Timchenko initiated the criminal case accusing the banking institution of criminal mismanagement. It maintains that the US sanctions have political support [8].

In 2017, Gennady Timchenko was also linked to former US Secretary of Commerce Wilbur Ross and PDVSA, since the senior US official has commercial investments in Russia through a shipping company of which the venezuelan oil company is a client of.


Ross's investment, which ranged from $2 million to $10 million, was in Navigator Holdings, which transports natural gas from Sibur, the company owned by Putin's daughter's husband after buying the part he owns. Gennady Timchenko was also in it, as we noted above.

Wilbur Ross sold his properties when he entered the government of Donald Trump, but kept his stake in Navigator through a chain of companies in the Cayman Islands [9].


REFERENCES

[1] Reuters. "The man who married Putin's daughter and then made a fortune." December 17, 2015. https://www.reuters.com/investigates/special-report/russia-capitalism-shamalov/

[2] Time. "Exclusive: Russia Secretly Helped Venezuela Launch a Cryptocurrency to Evade US Sanctions". March 20, 2018. https://time.com/5206835/exclusive-russia-petro-venezuela-cryptocurrency/

[3]VolgaGroup. http://volgagroup.com/upload/iblock/891/891e15c44efc369048d81e4bf624cf71.pdf

[4] Pitchbook. Volga Group Overview. https://pitchbook.com/profiles/investor/64236-52#overview

[5] Guvnor Group. https://gunvorgroup.com/who-we-are/

[6] Reuters. "Oil firms, US banks trade with Gunvor after co-founder sanctioned". March 20, 2014. https://www.reuters.com/article/us-ukraine-crisis-sanctions-gunvor-idUSBREA2J1T920140321

[7] The Guardian. "US 'launches money-laundering investigation' into member of Putin's circle." November 6, 2014. https://www.theguardian.com/world/2014/nov/06/us-money-laundering-putin-russia

[8] Bloomberg. Putin's Oil Ally Takes Fight for Frozen Funds to Top Swiss Court. October 6, 2020. https://www.bloomberg.com/news/articles/2020-10-06/putin-s-oil-ally-takes-fight-for-frozen-funds-to-top-swiss- court

[9] Hispanic New Jersey. "Sec. of Commerce of the United States linked to businesses in Russia and Venezuela ”. November 6, 2017. https://hispanonewjersey.com/2017/11/06/sec-de-comercio-de-ee-uu-vinculado-negocios-en-rusia-y-venezuela/

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