Politics

UK freezes record $13 billion in assets linked to Abramovich associates

Key Points
  • The United Kingdom has frozen assets belonging to two Russian oligarchs worth up to 10 billion pounds, or $13 billion.
  • Eugene Tenenbaum and David Davidovich are both close associates of Russian billionaire Roman Abramovich.
  • Thursday's action represents the largest asset freeze in British history, according to a government spokesperson.
  • The move comes one day after authorities on the offshore tax haven of Jersey froze assets valued at more than $7 billion that are suspected of being connected to Abramovich.
Chelsea owner Roman Abramovich is seen on the stand during the Barclays Premier League match between Chelsea and Sunderland at Stamford Bridge on December 19, 2015 in London, England.
Clive Mason | Getty Images

WASHINGTON -- The United Kingdom on Thursday announced that it had frozen assets belonging to two Russian oligarchs worth up to 10 billion pounds, or $13 billion.

The move against Eugene Tenenbaum and David Davidovich, two close associates of the better known Russian billionaire Roman Abramovich, represent the largest asset freeze action in British history, according to a government spokesperson.

Thursday's asset freeze comes one day after authorities on the offshore tax haven of Jersey froze assets valued at more than $7 billion that are suspected of being connected to Abramovich.

That brings the combined value of the assets frozen to as much as $20 billion. In addition to the freeze, only Davidovich, not Tenenbaum, was banned from traveling to Britain.

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Russian oligarch Roman Abramovich tries to broker peace deal with Ukraine

Jersey is a self-governing Channel Island whose head of state is Britain's Queen Elizabeth II.

British officials said the Jersey judgment against Abramovich and the U.K. actions against Tanenbaum and Davidovich were coordinated.

The moves are aimed at cutting off potential sources of cash that Russian President Vladimir Putin could call upon to bankroll his botched invasion of Ukraine.

"We are tightening the ratchet on Putin's war machine and targeting the circle of people closest to the Kremlin," British Foreign Secretary Liz Truss (below) said in a statement announcing Thursday's asset freeze. "We will keep going with sanctions until Putin fails in Ukraine. Nothing and no one is off the table."

"If Putin succeeds there will be untold further misery across Europe and terrible consequences across the globe," said U.K. Foreign Secretary Liz Truss.
Mateusz Wlodarczyk | Nurphoto | Getty Images

England, and in particular London, has long served as a hub for Russia's post-Soviet billionaire class, and several landmark properties in the city's most fashionable areas serve as second homes to Russian oligarchs.

But Russia's brutal war in Ukraine and the international response to it is threatening the financial security that British pounds and property riches once represented to Russia's wealthiest and best-connected oligarchs.

British sanctions imposed on Abramovich in March are forcing him to sell the renowned London soccer club Chelsea. A multibillion-dollar deal to sell the club is reportedly nearing completion, with four bidders still in the running to own one of Europe's most successful soccer teams.

Unlike a high-profile asset like Chelsea, the holding companies now controlled by Davidovich and Tenenbaum (below, left) represent the other side of Abramovich's empire, one that largely remains hidden.

Chelsea owner Roman Abramovich (R) and director Eugene Tenenbaum (L) celebrate a goal for Chelsea v Bolton Wanderers in Barclays Premier League February 25, 2012.
Jed Leicester | Action Images | Reuters

The international sanctions imposed in response to Russia's war on Ukraine have shed new light on the worldwide labyrinth of shell companies that Russian oligarchs use to disguise the sources and destinations of their wealth.

In the past week, relatively tiny tax havens like Jersey and the Cayman Islands have announced the freezing of tens of billions of dollars in assets held in their banks by Russian oligarchs who have come under sanction.

Jersey has long served as a secretive offshore corporate tax haven. Some of the world's wealthiest people hide their assets on the island using byzantine mazes of shell companies.

David Clapp | Photolibrary | Getty Images

Tenenbaum and Davidovich are both involved with one company registered in Jersey called Evrington Investments Limited that is linked to Abramovich, according to British authorities.

Corporate records show that on Feb. 24, the same day that Russia invaded Ukraine, Abramovich transferred control of Evrington Investments to Tenenbaum.

Less than a month later, Tenenbaum transferred control of the company to Davidovich.

But it wasn't just Tenenbaum who took over Abramovich assets on precisely the day of the invasion.

On Feb. 24, Abramovich transferred control of a separate company, Norma Investments, to Davidovich, according to corporate records. In the past, Abramovich has used Norma Investments to fund energy start-ups around the world, The Wall Street Journal reported.

And it wasn't just companies.

One of Abramovich's biggest yachts, the Aquamarine, also was transferred to Davidovich on Feb. 24, according to an investigation by The Guardian. Technically, the 150-foot superyacht is owned by a company called MHC Jersey Ltd., which is registered on Jersey.

Davidovich confirmed to the Guardian that he was the owner of both MHC and of the yacht itself.