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By John Helmer, Moscow

President Vladimir Putin’s campaign to repatriate Russian capital from offshore havens, and to force the well-known Russian oligarchs to return their cash and assets to Russia, took a leap forward on Monday evening in Nice, France. That is when French police arrested Suleiman Kerimov (lead image), and refused to accept that the diplomatic passport he was eligible to carry, issued by the Russian Foreign Ministry in Kerimov’s capacity as a senator of the Federation Council for Dagestan, provided him with the immunity Kerimov protested that it did.

Nice-Matin first reported Kerimov’s arrest as he stepped off his private jet at Nice Airport.   Whether Kerimov’s aircraft  has also been seized is not yet clear.

Three hours later, the Russian Foreign Ministry released several bulletins on the Interfax wire service, though not on the Foreign Ministry website, claiming Kerimov should be released. Senator Konstantin Kosachyov (Kosachev), chairman of the Foreign Affairs Committee of the Federation Council, did most of the talking. Kosachyov, a diplomat’s son, was a foreign ministry officer himself until 1999, and then went into parliament.


Source: http://www.interfax.com/news.asp

Reuters followed with the French riposte, adding a protest from the Russian Foreign Ministry.  “Russia’s foreign ministry said in a statement carried by Interfax news agency that Kerimov held a diplomatic passport and had immunity. It said it had informed the French authorities. ‘Kerimov does have a diplomatic passport, but that does not protect him from prosecution,’ the French official said. A French diplomatic source said immunity was given by governments to people on diplomatic lists or if they had been mandated with a specific mission in the country.” Russian government sources have acknowledged that Kerimov was not on an official mission in France, and that Russian regulations did not entitle him to use his diplomatic passport. 

Kerimov, who owns the Polyus goldmining company through his son, has believed he enjoyed immunity from prosecution in Russia by taking seats, first in the State Duma, and then in the Federation Council, starting in 1999. In March of this year, the Kremlin also awarded Kerimov its medal for meritorious service to the Fatherland, second class.   The official citation records Kerimov’s “labour achievements, active public activity and many years of diligent work.” This omits to acknowledge any contribution by Kerimov in either chamber of the Russian parliament, since there is no record of a vote he has cast, a speech made, or legislation he has introduced. Kerimov has given no interview to the Russian press as a member of parliament. Through his Moscow spokesman, and a New York lawyer called Eliot Lauer, he almost never answers questions.

The last attempt by a foreign authority to arrest him on criminal charges occurred in Minsk, Belarus, when Belarusian prosecutors were investigating fraud in potash trading in 2013. Kerimov, who owned Uralkali at the time, narrowly escaped in August 2013, when instead of flying into Minsk as planned, he sent Vladislav Baumgertner (right), Uralkali’s chief executive, in his place.  Baumgertner was held in detention in Minsk for three months until transferred to a Moscow prison. Kerimov was compelled to sell out of Uralkali in the meantime.

In May of 2011, on the last occasion when Kerimov was accused of money-laundering, involving an Indian intermediary, Lauer declared  for his client: “Mr. Kerimov is outraged by the reports that appeared in the Indian media last month regarding alleged connections between Hasan Ali Khan and Mr. Kerimov. In fact, he has filed a complaint to the Russian Prosecutor’s Office asking the Office to investigate the accusations made in those media reports with the Indian authorities. The reports that appeared in the Indian media last month contained unverified and untrue statements regarding Mr. Kerimov.”

Kerimov has a notorious business history in Russia. The investigation of his first gold-mining prospectus, along with highlights of Nafta Moskva, his earlier oil trading business, was reported here.   The full dossier of Kerimov’s transfer-pricing, tax optimization, concealed leveraging, double accounting and other schemes can be examined here

Investigation of Kerimov’s financial operations in Switzerland has revealed his employment of the Studhalter family as front men – Alexander Studhalter, Philipp Studhalter and Albina Studhalter – to convert Kerimov’s Russian cash through companies, trusts and a foundation based in Lucerne into Swiss and French real estate.


The Studhalter mishpocha – Alexander (left), Philipp (centre), Albina (right). For father Rudolf Studhalter and more, click to follow.  

By nominating the Suleiman Kerimov Foundation, run by the Studhalters as an arm’s length trust for his offshore assets, Kerimov escaped the deoffshorization law Federal Law No. 79, which Putin signed on May 7, 2013;  click to understand the loophole in the law here

In the south of France Kerimov has been accumulating more palatial villas than it is possible for one man to live in, especially one who lives offshore in a large motor yacht. Kerimov’s money trail to the Mediterranean started in 2011 with a Russian liquidity problem and troublesome German neighbours at the Villa Medy Roc. Also,  because Kerimov is reputed to be buying on leverage with cash supplied by Russian state banks, on the say-so of senior bankers who are friends with Kerimov, it is never clear what Kerimov’s net worth remains after his obligations have been subtracted and paid. If these obligations include concealed proceeds taken corruptly by his friends, then inside the cells at the Nice police station Kerimov has many beans to spill, in exchange for his freedom. Alternatively, he may do what comes naturally, and say nothing at all.

His lawyers explain that in order to make charges of money laundering stick in France, there must be a predicate offence – a crime or crimes charged either in Switzerland or in Russia. Quite clearly for the time being, there are none. In Lucerne the Studhalter mishpocha are an upright and blameless lot. In Moscow Kerimov has never been charged with an offence, and cannot be charged, according to his parliamentary immunity.  


One of the properties Kerimov owns through cutouts, Villa Hier (literally, Villa Yesterday) at Cap d’Antibes, was arrested in September

There is also the printed word of the Financial Times (FT), editor Lionel Barber and reporters Catherine Belton, Courtney Weaver, and Henry Foy, who have been reporting the blamelessness of Kerimov’s business conduct for many years; click to open the dossier.  In 2012, the FT’s endorsement  of “How Suleiman Kerimov lost a multi-billion-dollar fortune – and made it back again”, won the Cat’s Paw award for 2012. Read more

The last time a Russian oligarch was arrested in France, the affair involved the assent of the then- Minister of Interior, Nicolas Sarkozy. Not coincidentally, he was gathering campaign finance at the time for his run at the French presidency. The date was January 9, 2007; the legal process was in Lyon; the oligarch was Mikhail Prokhorov; the charge was pimping and procuring women (Russian) for sex gifts to Prokhorov’s business friends during the New Year holiday at the alpine resort of Courchevel. Prokhorov was in jail for four days. The affair ended three years later without an indictment, not least of all because everyone was a willing participant in Prokhorov’s scheme and well paid not to testify.   The financial benefit Sarkozy got from the business was reported here

The likelihood is, according to French sources, that the order by the investigating judge Alexandre Julien and police in Nice to arrest Kerimov as he landed in Nice will have been cleared in advance by the President, Emmanuel Macron. 

Putin last spoke to Macron on November 2. Their conversation by telephone, according to the Kremlin communiqué,  was Macron’s initiative, and the outcome  “business-like and constructive… Various aspects of bilateral cooperation were addressed, including the activity of the Trianon Dialogue civil society forum.” Among the aspects did Macron mention to Putin that the money-laundering investigation of Kerimov was nearing the point where, if Kerimov came to France, he would be arrested? And if Macron implied as much, what did Putin reply?

There will be no acknowledgment from either the Elysée Palace or the Kremlin that Kerimov’s fate was a point of reference between the two officials. But if both knew, and agreed not to get in the way of Kerimov’s arrest, the outcome may just as well have been explicitly decided between them.

The French communiqué on the telephone conversation focused on what the two men had to say about Syria and Iran. As for direct “regular and frank dialogue” between them, the Elysée report said Putin expressed his content with the “dynamic of bilateral Franco-Russian relations in the spirit and in application of the directions defined during the visit to France of President Putin at Versailles last May. “In this regard,” Macron ‘s message went on, Putin “underlined” to Macron “the importance of the links between the civil societies of Russia and France.” 


Putin and Macron at their face-to-face meeting in Versailles, May 29, 2017.

The French arrest has already sent shivers through the Russian oligarchy, as it docks its motor boats and airplanes around the world. And for those who get ashore safely, the questions now being asked in Moscow are — who will be protected from a money-laundering indictment, by whom, and for what reason of state?

Roman Abramovich’s vessel Eclipse docked at Port of Palm Beach, Florida, this week, but according to the local press, Abramovich was not on board, and has not disembarked. For more details, read this

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