Blood Money Europe S Secret Trade In Syrian Phosphates Syria

Cheap Syrian phosphate exports to Europe have increased in recent years. Europe has few of its own phosphate reserves, and European farmers were already struggling to afford phosphate fertilizers before the war in Ukraine pushed prices even higher. But this secret trade has a cost. Phosphate exports provide financial savings to the oppressive government of Bashar al-Assad and channel European funds to Syria’s key phosphate trading partner: Russian billionaire Gennady Timchenko, a close friend of Russian President Vladimir Putin. While EU sanctions on Syria do not explicitly prohibit the import of phosphates, they do prohibit agreements with the Syrian Minister of Petroleum and Mineral Resources, who is responsible for phosphates. European companies also risk violating the global scope of US sanctions on the Syrian government. Timchenko, meanwhile, was one of the first oligarchs to be added to UK and EU sanctions following Russia’s invasion of Ukraine in February. Thus, European companies pay a tangled network of shell companies and intermediaries to buy Syrian phosphates, which are secretly shipped to ships such as the Sea Navigator. An analysis of dozens of such voyages using ship tracking data reveals a plan for ships carrying phosphates from Syria that disappear from the International Maritime Organization’s AIS tracking system as they head for Syria and reappear en route to Europe a week or two later. Russian tycoon Gennady Timchenko in 2017. Photo: Sergei Karpukhin / Reuters Timchenko’s officials have also set up front companies in Syria to ship phosphates to Europe. “Syria’s phosphate trade shows why the EU sanctions system is not right for its purpose – tax evasion works and is not even that difficult,” said Ibrahim Olabi, a Syrian legal expert monitoring sanctions avoidance. “Russia has learned how to do this in Syria and can now use that experience to avoid sanctions for the war in Ukraine.” A survey by the Organized Crime and Corruption Reporting Organization (OCCRP), Lighthouse Reports and Syrian Investigative Reporting for Accountability Journalism (SIRAJ), in collaboration with journalists in seven countries, found phosphate loads from Syrian desert mines at factories of Europe. using open source analysis and financial documents and trade data from dozens of countries. Official trade records show that Spain, Poland, Italy and Bulgaria have recently started importing Syrian phosphates. Serbia and Ukraine, which also impose EU sanctions on Syria as part of their bloc agreements, are also major buyers. When asked about imports, companies and government agencies said they did not violate the sanctions because Syria’s phosphates are not explicitly banned and do not deal directly with those subject to sanctions. “You may be right. “You are also giving blood money to a regime that violates human rights and to a Russian oligarch under sanctions,” said Irene Kenyon, a former Treasury officer at the US Treasury Department. The companies of the Syrian front of a Russian oligarch In the desert surrounding Palmyra, the ancient city vandalized by Islamic State fighters, bus workers from neighboring cities dig phosphate rocks from dusty mines in Syria. Few Syrians still live in the villages scattered in this arid region, where Islamic State cells continue to carry out periodic attacks. Russian and Syrian private security contractors guard phosphate mines and coastal convoys. Phosphates are essential for crops and animal feed, and European agriculture depends on the global phosphate industry of about $ 55 billion. Syria was one of the world’s largest exporters of phosphates before the war engulfed the country in 2011, with industry collapsing when Islamic State occupied the area around the mines in 2015. Russia sent troops to Syria that year, eventually helping Assad retake most of the country. The government reciprocated by giving generous contracts to Russian companies in some of the countries’ most lucrative sectors. In 2018, the Syrian state-owned General Company for Phosphates and Mines (Gecopham), owned by the Ministry of Petroleum and Mineral Resources, handed over control of Syria’s largest phosphate mines to Russia’s Stroytransgaz. Stroytransgaz belongs to Timchenko, one of the richest people in Russia. Timchenko and Putin have been friends since at least the 1990s, when the oligarch was an oil trader in St. Petersburg. Timchenko denies claims that it is one of the fronts for Putin’s personal fortune, saying the couple are merely partners in judo. The United States imposed sanctions on Stroytransgaz in 2014 following the annexation of Crimea by Russia, forcing Tymchenko to withdraw from his company’s activities in Syria, which date back to the early 2000s. In 2016, Stroytransgaz executives took over a dark Russian logistics company and renamed it Stroytransgaz (STG) Logistic. On paper, STG Logistic is owned by a Moscow-based company that manages businesses for anonymous customers. Exports phosphates to the Syrian government in exchange for 70% of revenues. In 2018, Timchenko’s company sold a subsidiary, Stroytransgaz (STG) Engineering, to two shell companies based in Moscow. Shortly afterwards, the company won contracts to manage the export port in Tartous and Syria’s state-owned fertilizer plants, giving companies using the Stroytransgaz name control of the entire phosphate supply chain in Syria. Stroytransgaz now denies any affiliation with these companies. “STG Engineering is a separate legal entity and does not belong to our group of companies. “Just a similar abbreviation of the company name,” said spokeswoman Natalia Kaliniceva. However, company records in Syria and Russia show that senior Stroytransgaz officials played a key role in setting up these companies, including former Stroytransgaz director Igor Kazak and current Timchenko employee Zakhid Shaksuvarof. Irene Kenyon, a sanctions expert and director of risk information at consulting firm FiveBy Solutions, said the history of these companies gave her “high enough confidence” that they were owned or controlled by Timchenko’s company. “These are very common methodologies: creating mattresses and mattress shell companies to help reveal the ultimate useful property by people under sanctions,” he said. Subscribe to the First Edition, our free daily newsletter – every morning at 7 p.m. BST Putin’s man in Ukraine Syria is Ukraine’s largest supplier of phosphates, despite Kiev’s strained relations with Damascus since Assad backed the invasion of Crimea. Ukrainian fertilizer companies used to buy directly from the Syrian government, but since imports resumed in 2018, the trade has been through a network of shady start-ups. The vast majority of Syrian phosphates reach Ukraine via the port of Nika Tera in the southwestern city of Mykolaiv, now the front line in the Russian War in Ukraine. The port is owned by Ukrainian oligarch Dimitro Firtash, who also controls Ukraine’s largest producer of phosphate fertilizers, Sumykhimprom. Ukrainian oligarch Dimitro Firtash on trial in the courts of Vienna, Austria, in February 2017. Photo: Ronald Zak / AP While Sumykhimprom is technically state-owned, it is run by a close business partner of Firtash and owes the oligarch’s companies millions of dollars, according to a Radio Free Europe / Radio Liberty survey. “It is not uncommon for powerful players in Ukraine to control state-owned companies in this way,” said John Lough, a Russia-Ukraine expert at the British think tank Chatham House. Firtash, one of Ukraine’s richest men, owes his fortune to deals with Kremlin-controlled companies, including a $ 3 billion plan to resell undervalued Russian gas to Ukraine and make a difference. In return, it has funded pro-Russian politicians in Ukraine. Earlier this year, he denounced Putin’s war in Ukraine, telling NBC: “I was never pro-Russian, but you have to understand that I am a businessman. And my goal is to make money. “ His influence once extended to the United Kingdom, where he owns a mansion in London’s most expensive neighborhood, and he became a major benefactor of Cambridge University. He now runs his vast business empire from Austria, where he has spent the last eight years fighting extradition to the US to stand trial for corruption. Sumykhimprom was the largest importer of phosphates in Ukraine until 2020, when it disappeared from import records. As the company continued to produce phosphate fertilizers, it appeared to be sourcing its materials through third parties. Sumykhimprom did not respond to repeated requests for comment on whether it was purchasing Syrian phosphates. The growing European market More recently, companies in EU countries have resumed buying Syrian phosphates. Italy resumed trade in 2020, followed by Bulgaria last year and Poland and Spain in January. Trade is growing rapidly due to rising prices, according to European importers and industry analysts. “Syrian phosphates are very bloody not only because of the conflict in Syria but also because of what is happening in Ukraine,” said Glen Kurokawa, a phosphate analyst at the CRU Commodity Research Group. “Syria must sell at a political discount because its goods are so toxic that they can be handled.” European demand is likely to rise as the war in Ukraine disrupts markets for phosphates and fertilizers. Sanctions expert Julius Seidenader said the phosphate trade in Syria revealed how the fragmented imposition of sanctions by Europe and …