Panama Papers | Wife of Belarus oligarch in Malta used BVI companies during EU sanctions

Olga Makarova, the wife of a Belarusian entrepreneur who suffered a blacklist on his business activities under EU sanctions, set up over 12 offshore companies in the British Virgin Islands and Seychelles at the height of the sanctions afflicting her husband’s companies.

Vladimir Peftiev’s wife appears as the beneficiary of various offshore companies incorporated in the British Virgin Islands, according to the Panama Papers released by the ICIJ.

The address connecting Makarova to these offshore companies was the Portomaso apartment that the Peftievs lived in since the mid-2000s.

Vladimir Peftiev is considered to be one of Belarus’s richest oligarchs, and according to United States diplomatic cables, a close associate of dictator Alexander Lukashenko.

The Panama Papers revealed Makarova as the shareholder and beneficiary of Barchetta Ltd, Maestrale Ltd, Stenmore Management Limited, Segal Investment Limited, Cardel Group Inc, Rocchetta Ltd, Sfera Ltd, Strathford Holding Ltd, Cadwall International SA, Milden Holdings, Sarles Investments, Kelly Bay Pacific Overseas Co., Isely Investments Ltd, and Unifin Consultancy Limited.

There was no mention in the ICIJ database of any Maltese intermediary who assisted Makarova in setting up the offshore companies, most of which were created between 2007 and 2013.

Without the emails in the ICIJ’s possession, it is not possible for MaltaToday to understand the context in which these offshore companies were created and for what reason.

Vladimir Peftiev, the man known as ‘the banker’ to Belarusian dictator Alexander Lukashenko, was a Malta resident when he was slapped with official sanctions for his association with the Lukashenko regime.

He was listed as an economic advisor of Lukashenko and a key financial sponsor of his regime, as well as the chairman of the Belarusian state’s arms export company Beltechexport. Also blacklisted were Beltechexport and two firms allegedly under Peftiev’s control, state lottery company Sport-Pari and BT Telecommunications.

MaltaToday knows that in order to obtain residency in Malta, Peftiev had himself appointed as a “marketing director” of the firm Samuel International, a firm that is owned by Maltese firm CAC Fiduciary.

The firm also appears in the Panama Papers as an intermediary that used Mossack Fonseca’s services to set up 10 entities in the British Virgin Islands, but not for Peftiev or Makarova.

A notice appearing The Times’s social and personal pages in 2005 announced the birth of his son Nikolai, his fifth child, with Olga Makarova.
During the sanctions, the EU instructed member states to freeze all assets held by Peftiev, who claimed his rights to a fair trial were violated by the sanctions.

Peftiev’s bid to be Malta’s honorary consul for Belarus had also been turned down by the foreign affairs ministry in June 2011. Peftiev held meetings with the Chamber of SMEs (GRTU) and the Chamber of Commerce in April 2011. Both Chambers spoke highly of Peftiev’s credentials after meeting him and his wife.

US embassy cables leaked by Wikileaks say Peftiev, who had been residing in Malta since 2005, speculated that he had obtained dual citizenship and that by 2007 he “no longer maintained business dealings or bank accounts in Malta.”

The embassy’s source also claimed that “the alleged Maltese money might now be salted away in Venezuela” and any illicit Lukashenko-controlled funds in Malta may have been repatriated to Belarus.

The sanctions against Belarus came in view of the deteriorating human rights, democracy and rule-of-law situation in the country. Beltechexport produces and overhauls used weapons for resale, and is the leading re-exporter of second-hand weaponry and arms vehicles and aircraft.

In February 2016, the Council suspended the travel ban and asset freeze in response to the release of all Belarusian political prisoners on 22 August, 2015, following improved EU-Belarus relations. It followed presidential elections held on 11 October, 2015 in an environment free from violence.

Lukashenko and Peftiev

According to the Centre for Eastern Studies (OSW), an independent public research institution monitoring events in the Balkans and former Soviet states, Belarus has seen a small group of businessmen among its top earners who, in exchange for their political loyalty and their consent to share profits with those in power, “have enjoyed a number of privileges that allow them to safely conduct business in an environment typically hostile to private enterprise.”

That group of influential individuals includes “Belarus’s wealthiest entrepreneur, Vladimir Peftiev, worth an estimated $1 billion, potentially making him the only Belarusian billionaire.”

Peftiev’s assets include: Beltechexport (export of arms and military equipment), BT Telecommunications (investment in advanced technologies), Sport Pari (lotteries, gambling), Delovaya Set (Internet service provider), as well as Akvadiv distillery and a number of investments in logistics and real estate.

In 1993 Peftiev created the joint venture Beltechexport to export stockpiles of ammunitions from the Soviet era. When the stock of weapons dried up, Peftiev diversified his portfolio with the betting company Sport-Pari, together with Dimitri Lukashenko, one of the president’s sons.
France24’s exposé ‘The Belarus Networks’ says the use of offshore companies, especially in the British Virgin Islands, “let Belarussians conduct business in the EU with impunity. US diplomats noted that persons on the sanctions list, or fearing to be added to the list, used their children to conduct their business in Europe. The daughter of former prime minister Sergei Sidorsky, for instance, is believed to have conducted a money laundering business in Germany.”