They thus remain invisible to the wider public and cooperation partners, and can also operate in Latvia, despite the fact that their reputation is not a secret.
IN SHORT:
Friends of the Kremlin are still not on the sanctions list, the factory receives EU funds
The names of Andrej Bokarev and Iskander Mahmudov were widely heard in Latvia several years ago. Despite their closeness to the Kremlin, both the suppliers of trams in Daugavpils and the manufacturers of train carriages for the Riga-Moscow route were connected to the two Russian oligarchs.
Then, in 2021, with the approval of the Financial and Capital Market Commission, their Russian companies gained control of the “Riga Electrical Engineering Plant”.
At the end of last year, the publication “The Insider”, which is in opposition to the Russian government, expressed surprise at this business in Latvia, which was still undisturbed even during the war, and even at the use of European funds for the factory.
“Bokarev and Mahmudov are longtime friends of the Kremlin. [..] The oligarchs are also suppliers to the Russian Ministry of Defense. One of their business partners in the Kalashnikov Arms Concern was Alexei Krivoruchko, now Russia’s Deputy Defense Minister. Bokarev and Mahmudov left the Kalashnikov factory, but continued to supply diesel engines to Russian warships through their factory in Kolomna,” wrote “The Insider” in the publication of December 8, 2022.
Almost a year has passed and almost nothing has changed. The European Union has not included them in its sanctions anyway.
In addition, it is planned that two European fund projects, both of which have been allocated a total of 1.4 million euros to the factory, will be completed this year, with subsequent cash disbursements.
The company hid its previously publicly visible connection with oligarchs
At the same time, several months after Russia’s full-scale invasion of Ukraine, the company hid its previously publicly visible ties to oligarchs.
Instead of the names of the real beneficiaries – Bokareva and Mahmudova – in the company register, an entry appeared that it was impossible to find them out.
The correction was made after the company’s application, the Register of Companies had no reason to refuse.
“The regulation stipulates that this threshold is 25%. Let’s say, if there are five participants in equal shares, none of them meets the wording of the law – he does not meet the definition of this true beneficiary. Therefore, there will be such an entry, because there is no reason to indicate any of to them,” explained Sandis Karelis, Acting Chief State Registrar of the Enterprise Register.
This does not mean that these people are really no longer behind the company.
And it can be concluded that Bokarev and Mahmudov have not actually disappeared anywhere either. The Russian companies that have shares in the factory and through which the ownership chain led to Bokarev and Mahmudov have not changed. And through them, each oligarch owns about 18% of the factories operating in Latvia.
“Rīgas Elektromašinbūves rūpnīka” did not find time to explain its activities and ownership structure. The e-mail thanked them for their interest with emphatic kindness and indicated that answers were not possible at this time.
“The management of the joint-stock company “Rīgas elektromašīnbūves rūpnīca” apologizes to Latvian Television and to you personally, taking into account the circumstances that the management is on a foreign visit, and in fact there is no person who could coordinate the information you requested for issuance,” the plant stated.
The knot of sanctions tightens around Bokarev and Mahmudov
The State Security Service was usually stingy in its comments on this situation: “In accordance with its competence, the State Security Service constantly obtains and analyzes information on risks to Latvia’s national security, including the activities of persons connected to the Russian power elite in our country. We can confirm that the mentioned company has come to the attention of the service , but we will refrain from further comments at the moment.”
The availability of information about the possible risks of Russian influence is emphasized as a cornerstone when working in an environment exposed to the risk of sanctions.
And also around Bokarev and Mahmudov, the knot of sanctions tightens. Australia (since 06/04/2022 for Bokarev), United Kingdom (since 13/04/2022 for Bokarev and 26/09/2022 for Mahmudov), Ukraine (since 12/10/2022 for Bokarev and 19/10/2022 for Mahmudov) and New Zealand (since 22.11.2022 to Mahmudov), which applied sanctions last year, the USA also joined in September this year.
And companies or entrepreneurs related to these sanctions, if they are related to Latvia, the Register of Companies has just started to indicate in a special list provided for by law. However, there were no records related to Bokarev and Mahmudov this week either.
If a person is not fixed as the true beneficiary, each case is a matter of separate analysis.
“I would refrain from commenting on what percentage threshold this grade should be. New models are currently being created, where knowledgeable people are trained, and each case will be assessed individually. It is complicated enough and also has enough legal consequences, because as soon as we put such a mark in their registers, of course, by releasing such information publicly, its consequences for the subject could be irreversible,” explained Karelis.
Probably many more “hidden”.
The Ministry of Justice, which initiated the creation of such a list, promises that if there is something that can be improved, it will be done. What’s more, the companies associated with the mentioned Russian oligarchs are far from the only ones that rushed to cover up possibly risky ties.
After the war, it is “impossible to find out” the true beneficiaries of several more companies, and there are around 600 companies that belonged to persons from Russia before the war and no longer, according to “Lursoft” data.
The Minister of Justice Inese Lībiņa-Egnere (“New Unity”) admitted that there must be tools that help to see the risky links.
“That’s why I already mentioned the term – spider, because in essence there is already a desire to hide under this information, to hide those persons who have been sanctioned,” said the minister.
Therefore, it would be expected from the Register of Companies that it will reveal the link that is not publicly visible in case of sanctions. Otherwise, everyone who cares about it, for example cooperation partners, would have to invest a lot of effort themselves.
“And in other countries, since there is a problem – yes, individuals have to comply with sanctions, but there is no such real register. We want to come against it,” said the minister.
Although it may affect bank settlements, the sanctions of other countries are not directly binding on Latvia in any case. Therefore, the question remains whether the European Union will still join the sanctions against Bokarev and Mahmudov.
Director of the Legal Department of the Ministry of Foreign Affairs, Sanita Pēkale, stated that they are currently working on the next round of sanctions.
“And of course, together with other European member states and the European Commission, we are actively working to identify areas where it would still be possible to exert pressure to stop Russia’s illegal activities,” she added.
The official proposals of the European Commission are also expected soon, which will be approved if all EU member states agree to them.
2023-11-12 18:45:19
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