Swedbank is under investigation for violations of US sanctions
Major shareholders in the Russian weapons manufacturer Kalashnikov have sent almost 1 million euros to its American counterpart, an owner of Kalashnikov USA – with the help of Swedbank. At the same time, US and EU sanctions forbid the companies from doing business with each other.
Swedbank is now under investigation by US financial authorities.
After Russia annexed Crimea in 2014 The United States responded with sanctions against government ministers, companies and oligarchs with ties to the war in Ukraine.
One of the companies that was put on the list and prevented from doing business with the EU and USA was the crown of the Russian weapons industry – the gun maker Kalashnikov.
“The Russians had just invaded their neighbor. So it stands to reason that we would go after the Russian defense industry, which we did. And Kalashnikov is a signature piece of that defense industry”, says Daniel Fried (D), the diplomat responsible for coordinating the sanctions in the Obama administration.
Now, SVT reveals that the business network of Russian oligarch Iskander Mahkmudov – shareholder of Kalashnikov Group in Russia and the biggest client of Swedbank Estonia, have funneled over 1 million euros to counterparts at Kalashnikov USA.
The payments were sent in four transactions, from companies registered in the tax haven of the British Virgin Islands. The money was deposited in accounts at Bank of America controlled by key people at Kalashnikov USA.
One of them is the company’s founder and owner, a Russian citizen living in Florida.
As early as a year ago, the Bloomberg news agency reported that the then CEO of Kalashnikov Russia, now Russia’s deputy minister of defense, Aleksey Krivoruchko, had extensive dealings with the people behind Kalashnikov USA before the sanctions. When Bloomberg published the story, Kalashnikov USA promised that all contacts with former Russian partners ended after the sanctions.
Bloomberg-reporter Michael Smith is given access to the information SVT has obtained:
“There we have proof of a sort of financial flows. I’d like to show this to them and see how they respond.”
Last spring, Swedish Television revealed how the business network of the infamous Russian oligarch Iskander Makhmudov funneled hundreds of millions of dollars to tax havens through over 200 companies in Swedbank.
The same network has been crucial in the transactions to people associated with Kalashnikov USA.
SVT has shared the information with Swedbank’s new CEO, Jens Henriksson:
“I’m not going to go in and say exactly what I know, because I can’t confirm who our customers are. I’m just going to say that I’m shocked and saddened. I’m going to take this information and give it to our investigators and that we’ll take a closer look at it. So thank you very much.”
Swedbank later adds that the information provided by SVT was known by the bank and are still under investigation. All conclusions of the internal investigation, which looks at 30 billion transactions during the years 2007 – 2019 will be published early next year.
Neither Kalashnikov USA nor the Russian Kalashnikov responds to SVTs questions about their roles in the affair but the oligarch’s representative states that the questions to his client are not relevant because Makhmudov and his partner have never been majority owners of Kalashnikov Russia – and therefore are not targeted by the American sanctions.
But the regulations about sanctions are not just about formal ownership, but also works indirectly and looks at who actually controls a company and whether new owners are being used to avoid sanctions.
The report from SVT also reveals information about a former employee of Swedbank in Estonia who was the key account manager for among others, Iskander Makhmudov.
From several confidential internal reports from Swedbank, it is concluded that the bank viewed this employee as a corruption risk. He was responsible for the richest and most important clients of Swedbank Estonia and the internal investigation reveals that he was aware that some of the business of his clients were dirty. In messages sent to a colleague he has described transactions as “not the whitest of deals” and another as a “fairy tale“.
Also, right after he quit at Swedbank he became the CEO of a company in Cyprus owned by a minister of the Russian government Mikhail Abyzov (2012-2018).
The same minister was previously a client for the employee at Swedbank, funneling over 850 million dollars to tax havens up until 2017.
The former employee writes in an email to SVT that the bank’s investigators have no evidence to back up their accusations. Referring to banking secrecy, he also says that he cannot comment on the customers he dealt with in the bank.
The full investigation “Swedbank and Kalashnikov“ is available in english on SVT Play.
Other articles in english about suspected money laundering in Swedbank:
Axel Gordh Humlesjö, Linda Larsson Kakuli & Joachim Dyfvermark
Reporters
Researcher
Ella Hopf Berger & David Lindahl
Web editors
Visualization, Web Production & technical development
Editor in chief
Photo: TT/SVT
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Publicerat 20 februari 2019
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