Sanctioned or not, Russians abroad find their money ‘toxic’

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LONDON/ZURICH/NEW YORK, March 30 (Reuters) – Yevgeny Chichvarkin, a telecommunications magnate who fled Russia in 2008 and became a top restaurateur in London, has long been a strong supporter of Ukraine.

With his partner Tatiana Fokina, the multimillionaire says he has sent four trucks of medical and protective equipment to Poland to help Ukrainians since the Russian invasion on February 24.

Chichvarkin, a burly man with a waxed mustache, said he drove the first load himself.

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But the 48-year-old entrepreneur, a longtime critic of Russian President Vladimir Putin, said he had just unexpectedly had one of his Swiss bank accounts frozen. He declined to say by which bank.

Chichvarkin is one of a growing number of Russians living abroad who have problems accessing their money, even when they are not direct targets of Western sanctions.

Reuters interviews with nine Russians living abroad – along with their wealth managers, lawyers, tax advisers, real estate and art brokers – suggest Western sanctions intended to punish Putin’s inner circle are also largely ensnaring holders Russian passports.

Four Russians living abroad with dual nationality described banks freezing their accounts or payments in London, Zurich and Paris. A wealthy emigrant from London said he had switched to cash for shopping and was keeping a low profile.

Two wealth management advisers and a lawyer described rejected Russian client bank account applications. Banks said they were taking extra care with Russian money. And three brokers said some real estate and art deals have stalled.

A Canadian-American lawyer says his Russian clients are afraid to travel internationally for fear of being stopped at customs as Western banks throw a wide blanket of suspicion on Russian money – even charity donations charities. Dual passports no longer provide escape routes as they once did.

“I deal with Russians who can’t get out of hotels, students who don’t have money because credit cards have no value,” said Bob Amsterdam, founding partner of the firm. Amsterdam & Partners lawyers based in Washington and London.

“Banks (…) refuse bank accounts to Russians: they close their doors to Russians on nationality,” said Amsterdam, who is based in London. “The main law firms in the city have closed their doors to Russians in terms of nationality.”

‘YOU MUST BE VERY CALM’

Several lawyers representing wealthy Russians in Europe spoke of a general climate of mistrust. A tax and wealth planning expert, who asked not to be named because of a climate she said penalized association with Russia, said Russians were being watched regardless of where they lived or their wealth.

“Currently anything Russian is toxic, which means everyone is trying to be extremely, extremely careful about what to do with Russian clients,” said the lawyer, a dual Russian citizen. and British, who runs a law firm in Zürich.

Journalist Elena Servettaz, a dual citizen who has lived in France since 2005, said French bank Crédit Mutuel refused a transfer of less than 1,000 euros to her account – money sent to her from London to support relief efforts for Ukrainian refugees.

When Servettaz called the bank, he was told the transaction had been flagged because of his Russian nationality. Servettaz received the money more than a week later.

“It’s so unfair when you’re part of the Russian opposition, you help Ukrainian refugees, and they say you’re Russian, so you can’t get your money,” Servettaz said.

Crédit Mutuel said European banks were required to apply “the utmost caution” in reviewing transactions that could be affected by EU sanctions, and that the additional checks required to ensure compliance could lead to delays, even if he did his best to limit the effects on customers.

A Crédit Mutuel spokesperson said in an emailed statement that the Servetta situation “was quickly resolved once the customer sent us the requested information.”

Reuters reported this month that European Union regulators have asked some banks to review the transactions of all Russian and Belarusian customers, including EU residents. Read more

Some wealth managers in Europe have sought to distance themselves from the economic and political fallout. Switzerland’s Julius Baer (BAER.S) began blocking new business with Russian clients this month, two sources familiar with the operations said. UBS CEO Ralph Hamers said all Russian passport holders had effectively become semi-sanctioned. Read more

Julius Baer said he was not accepting new Russian customers domiciled in Russia, but was continuing to serve existing Russian customers “subject to any applicable laws, regulations or penalties.”

Russian writer Grigory Chkhartishvili, who lives in London and whose last name is Georgian, managed to transfer a sum of money through the British bank Barclays to support his charity helping Ukrainian refugees, True Russia.

But his wife, whose surname is Russian, was blocked by Barclays as she tried to send money to the same charity, he said. The bank requested a face-to-face interview with her.

“My sum was ten times larger, but that was no problem,” Chkhartishvili said. “It shows the mood.”

Chkhartishvili said his wife, who declined to be interviewed by Reuters and asked that her name not be made public, told him she was able to transfer the money the next day after calling the bank and explained that she was helping Ukrainian refugees.

Barclays did not respond to a request for comment.

A wealthy Russian oil and banking tycoon, who asked not to be identified so he could speak freely about his financial situation, said he felt he had become ‘collateral damage’ from the Russian invasion – that Moscow calls it a “special operation”.

Based in London for three decades, he said he still had businesses in Russia and feared greater financial restrictions, despite not being on a sanctions list.

“I have some savings,” he said, adding that he was considering selling European assets. “You have to live without money… You have to be very quiet.”

‘RUSSOPHOBIA’

In the basement of one of his newest ventures, The White Horse pub in London’s upscale Mayfair, Chichvarkin says he’s confident his lawyers will be able to unblock his Swiss bank account.

It is the only one of his accounts that has been frozen, he said. He thinks it’s because it’s the only one he’s opened with a Russian passport.

At the same time, Chichvarkin believes his and his partner’s opposition to Putin and the war, as well as their vocal support for Ukraine, have helped shield their businesses from anti-Russian hostility from customers. and the public, agitated by what Fokina calls “Putin’s attitude”. war”.

Yet their Michelin-starred restaurant Hide – which they own alongside wine shop Hedonism Wines, where a bottle can cost 124,000 pounds ($163,500) – received a one-star Google review about two weeks after it started. of the war, Fokina’s aide said.

The rare bad review, among 1,767 others that gave the restaurant an average rating of 4.5 stars, simply read: “Russian owned.” It has since been removed.

“You’ve heard of people canceling Tchaikovsky concerts, people vandalizing Russian food stores,” Fokina said. “It’s London 2022. How did we get there so fast?”

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Additional reporting by Valentina Za in Milan, Michele Kambas in Cyprus, Elizabeth Howcroft and Sinead Cruise in London; Written by Silvia Aloisi; Editing by Leela de Kretser and Daniel Wallis

Our standards: The Thomson Reuters Trust Principles.

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