The central bank of Bashar al-Assad’s regime lost about $250 million in assets over a two-year period when the then-Syrian dictator received military support from the Kremlin and his relatives secretly bought Russian assets. The cash was flown to Moscow.
The Financial Times reports that despite being desperately short of foreign currency, the Assad regime in 2018 and 2019 sent $100 coins weighing nearly two tons to deposit in sanctioned Russian banks. He revealed records showing that banknotes and 500 euro banknotes were transported to Moscow’s Vnukovo airport.
The unusual transfer from Damascus comes as Russia, a key ally of Assad that has provided military support to extend Assad’s regime, is the most important source of Syria’s funds as Western sanctions force the country out of the financial system. This highlights the fact that it has become one of the sources of funding.
Rebels and Western governments accuse Assad of plundering Syria’s wealth and engaging in criminal activity to finance the war and his own wealthy class. The cash shipments to Russia coincided with Syria becoming dependent on Kremlin military support, including Wagner Group mercenaries, and Assad’s relatives beginning to buy up luxury real estate in Moscow.
David Schenker, who served as the U.S. assistant secretary of state for Near Eastern affairs from 2019 to 2021, said the Assad regime was “a combination of securing ill-gotten gains and securing ill-gotten gains.” He said the remittances were not surprising given that he regularly sent money out of the country to pay for his expenses. Syrian property abroad. ”
“The regime will need to take that money overseas to a safe place to provide a rich lifestyle for the regime and its aides,” he said.
“Russia has long been a haven for the Assad regime’s finances,” said Eyad Hamid, a senior fellow at the Syria Law Development Program, which helped Moscow evade Western sanctions after Assad brutally suppressed an uprising in 2011. He pointed out that it has become a “base” for doing things. .
Assad’s flight to Moscow as rebels close in on Damascus has infuriated even some supporters of the former regime, who see it as proof of Assad’s overwhelming self-interest.
His unstable rule has been supported by Iran and its proxy militias, which intervened in 2012, and by Russia, which sent in fighter jets to crush the remnants of Syrian rebels and Islamic extremists in 2015. Ta.
Relations between Syria and Moscow have deepened dramatically as Russian military advisers strengthen Assad’s war effort and Russian companies become involved in Syria’s valuable phosphate supply chain. “The Syrian state may be paying the Russian state for military intervention,” said London-based Syria analyst Malik al-Abdeh.
From March 2018 to September 2019, the Assad regime moved large shipments of U.S. and Euro banknotes to Russia.
According to Russian trade records from the export data service Import Genius, on May 13, 2019, a plane loaded with $10 million in $100 bills sent on behalf of Assad’s central bank landed at Moscow’s Vnukovo airport. .
In February 2019, the central bank received an inflow of around 20 million euros in 500 euro notes. From March 2018 to September 2019, there were a total of 21 flights with a declared value of over $250 million.
Records dating back to 2012 show no such cash transfers between Syria’s central bank and Russian banks before 2018.
Foreign exchange reserves were “almost zero” by 2018, a person familiar with Syria’s central bank data said. However, it added that due to sanctions, the central bank was forced to pay in cash. The company bought wheat from Russia and paid for money-printing services and “defense” costs, the person said.
They added that the central bank would pay according to “what is in the vaults.” “When a country is completely surrounded and under sanctions, all they have is cash,” the official added.
According to Russian records, regular exports from Russia to Syria, including shipments of secure paper and new Syrian banknotes from the Russian state-owned printing company Goznak, and consignments of replacement Russian military parts to the Syrian Ministry of Defense, include: It was done a few years ago. And after a large amount of banknotes was airlifted to Moscow.
However, there is no record that the two Russian lenders that received notes from Damascus in 2018 and 2019 also received large amounts of cash from Syria or other countries over a 10-year period.
Despite Syria’s national treasury being destroyed by the war, Assad and his aides have maintained personal control over key parts of Syria’s devastated economy for the past six years, people familiar with the regime’s workings say. said.
First lady Asma al-Assad, a former JPMorgan banker, has held a powerful position influencing international aid flows and leading the secret Presidential Economic Council. The United States says President Assad and his supporters also derived income from international drug trafficking and fuel smuggling.
“Corruption under Assad was not a minor incident or a side effect of the conflict; it was the government’s way of doing things,” said Hamid of the Syria Law Development Programme.
Syrian cash transfers have previously triggered U.S. government sanctions. In 2015, the U.S. Treasury Department found that former Syrian Central Bank Governor Adib Mayale and central bank official Batur Rida facilitated large cash transfers from the regime to Russia and controlled fuel-related transactions to raise foreign currency. criticized as such. Mr. Lida was also accused by the United States of trying to source the chemical ammonium nitrate used in barrel bombs from Russia.
Records show that the cash handed over to Moscow in 2018 and 2019 was handed over to Russian Finance Corporation Bank (RFK), a Moscow-based Russian financier controlled by Russian state arms export company Rosoboronexport. Ta.
The U.S. Treasury Department sanctioned the bank earlier this year for facilitating cash transfers and enabling “millions of dollars in illegal transactions, foreign currency transfers, and sanctions evasion schemes for the benefit of the Syrian government.”
Records from March 2018 show that Syria’s central bank also transferred $2 million to TsMR Bank, another Russian bank that is also under U.S. sanctions.
As Russian financial institutions received cash from Syria, President Bashar al-Assad’s other international backer, Iran, planned to funnel foreign currency to the beleaguered regime. Company records analyzed by the FT show key money officials for the Assad regime held key positions at these companies.
Yasar Ibrahim, President Assad’s closest economic adviser, is a shareholder in a Lebanese company called Hokur SAL Offshore, along with his sister Rana, who is also under sanctions from the United States.
According to the US Treasury, Hokur has been directed to move hundreds of millions of dollars from Iran’s Revolutionary Guards Quds Force and the Lebanese militant group Hezbollah “for the benefit of the brutal Assad regime.” Ibrahim’s role in the company has not been reported so far.
A cordon of Western sanctions locked the regime out of the dollar banking system, but corporate records analyzed by the FT show that key Assad lieutenants continued to move assets to Russia.
In 2019, the FT reported that President Assad’s extended family had used a complex series of companies and loan schemes to purchase at least 20 luxury apartments in Moscow since 2013.
Then, in May 2022, Iyad Makhlouf, President Assad’s maternal cousin and a Syrian general intelligence major who is said to have surveilled, suppressed, and killed citizens, revealed that he was in charge of Zeveris City, which he co-owns with his twin brother Ihab. He is listed in Russian corporate records as having established a real estate company in Moscow. show.
Iyad’s brother Rami Makhlouf is the regime’s most important businessman and was at one time thought to control more than half of Syria’s economy through a network of companies including the Syrian Tel mobile phone network. But even after Rami lost support for the regime in 2020, Syrians with knowledge of the regime claim that Iyad and Ihab remained close to Bashar and his wife, Asma. .
According to company filings, Zeveris City was founded by Russian female employees of Mudalal Khoury, a Syrian-Russian banker sanctioned by the U.S., who is involved in large-scale transfers from Syria to Russia on behalf of the Assad regime. It has been criticized by the United States for facilitating the transfer of funds.
Mr. Khoury is seen as playing a vital role in integrating regime interests into Russia’s financial system, and in 2015 the US Treasury Department said that Mr. Khoury had a “long association with the Assad regime, “They represent business and financial interests.”
Schenker said that given the pressure Assad has faced for more than a decade from the West, especially the United States, “Assad always knew that he would never be an acceptable ally in Paris, for example.” .
“He had no intention of buying an apartment there, but he also knew it would end badly if things continued like this. So they spent years stealing money and turning it into a reliable safe haven. I tried to build a system.
