Sanctions imposed on the Russian billionaire Alisher Usmanov and his two sisters could be suspended after a legal challenge at the European court of justice by the businessman once described as one of Vladimir Putin’s “favourite oligarchs”.
Usmanov, as well as his sisters Saodat Narzieva and Gulbakhor Ismailova, each filed separate legal appeals in April in an attempt to overturn sanctions that have blocked them from travelling across the EU or making use of assets located in member states, including a $600m (£484m) yacht.
The Guardian understands an interim decision on whether to suspend sanctions could be issued within the next two weeks, pending a final ruling that is likely to be made by the end of the year. That would give the oligarch and his relatives access to bank accounts and assets that have either been frozen or seized.
The Uzbek-born Usmanov has been subject to an asset freeze and EU travel ban since late February, after Russia invaded Ukraine. The sanctions came after the bloc identified him as one of “Putin’s favourite oligarchs”. Similar sanctions have since been applied against the metals and telecoms magnate in the US and UK, where he was a major sponsor of Everton football club.
The EU later extended sanctions to Ismailova and Narzieva, for being financially “associated” with their brother.
The move resulted in the impounding of a $600m yacht – the largest in the world – after German federal police, who investigated a complex web of holding companies, claimed to have identified Ismailova as the only beneficial owner of the vessel.
A spokesperson for Usmanov and his sisters said the yacht’s ownership “was never concealed” and that all the required documents related to the structure of ownership via a trust were provided to relevant authorities, including in the EU, US and Germany.
The EU sanctions listing for Usmanov also said the oligarch had “transferred considerable assets to his sister Soadat Narzieva [sic] including a single payment or gift of $3m”. The sanctions notice added that Narzieva “held 27 Swiss bank accounts, holding hundreds of millions of dollars, which can be linked to her brother”.
Questions over Narzieva’s links to those 27 Credit Suisse accounts were raised as part of an investigation by a consortium of media partners, including the Guardian and the Organized Crime and Corruption Reporting Project, in March. The Russian Asset Tracker project drew on a number of leaks including Credit Suisse data. Documents showed a majority of the accounts were also linked to Usmanov’s media, metals and mining conglomerate, USM Group. Eighteen of those accounts are believed to have still been active in recent years.
A spokesperson for Usmanov and Narzieva told the Guardian in mid-March, before publication, that the Credit Suisse data was “fake and incorrect”.
On the day of publication, representatives for Narzieva said she been given a small shareholding in USM by her brother. In early May, nearly six weeks after the investigation was published, Usmanov’s spokesperson contacted Guardian to say Narzieva had been listed as a beneficial owner on Credit Suisse accounts for a brief period in 2013-2014 and that she was named on bank data owing to “technical reasons”.
According to documents from the Panama and Paradise Papers leaks, she appears to be one of six relatives and associates who were given a portion of Usmanov’s stake in USM in September 2013. The spokesperson said Narzieva’s holding was equal to 0.3% of the company. The businesses controlled by USM at the time included MegaFon, one of Russia’s largest mobile phone operators, and Mail.ru, a tech group now named VK that owned Russia’s equivalent to Facebook. Secondary shares in both companies were listed on the London Stock Exchange.
The spokesperson said that in August 2014, Usmanov bought back the shares he had distributed to Narzieva and other family members a year earlier.
“Family members subsequently sold their shares and received a profit, which amounted to an insignificant portion of Mr Usmanov’s wealth,” the spokesperson said.
They said Narzieva was paid $15m for her holding, and that she had received $2.1m in dividends, adding that her shareholding, which was held via a British Virgin Island’s offshore company called Optimum Group Holdings, was liquidated in 2018 and had no other business dealings with USM.
“The sole reason why these ‘mysterious multibillion accounts’ were associated with her is that for a brief period, between 2013 and 2014 [when she held the shares], Mrs Narzieva was one of a number of minority shareholders [family] of USM Holding [and, by extension, a dozen or so entities that ultimately formed USM Holding],” the spokesperson said.
“But she never had access to the accounts of these companies, nor did she have any signatory rights over any of them,” they added.
Narzieva, who is a gynaecologist and obstetrician in a maternity hospital in Uzbekistan’s capital, Tashkent, was one of six relatives and associates given shares in USM, Usmanov’s spokesperson confirmed.
The spokesperson said Narzieva would have been listed as a beneficial owner in identity forms for USM Holdings and affiliated companies. “Such forms usually mention all the minority owners of any company, even if these persons have no voting rights, no control over accounts, and no sway over the holding businesses’ activities.”
The spokesperson reiterated that Narzieva did not have “possession or control of any accounts in Swiss banks on behalf of her brother” and that there was nothing untoward about Usmanov’s financial relations with his sister. “Any speculation about Mrs Narzieva’s business dealings on behalf of her brother or on behalf of USM Holding is simply incorrect.
“At all times, Mr Usmanov remained the major shareholder of USM and had absolutely no need to use Ms Narzieva or any other individual to control accounts at Credit Suisse or at other banks,” the spokesperson said.
They added that Usmanov considered the sanctions against his sister to be an unfair, inhumane and unfounded example of retaliation against family.
Documents related to the sanctions appeal have not been made public.
Other Russian officials have also filed challenges to EU sanctions at the ECJ, including the oil billionaire and Putin ally Gennady Timchenko, and Igor Shuvalov, a former Russian deputy prime minister who heads the Russian development bank VEB. Timchenko is also applying for damages, an EU official confirmed.
