Bashar al-Assad's central bank airlifted about $250 million in cash to Moscow during a two-year period when the then Syrian dictator was beholden to the Kremlin for military support and his relatives were secretly buying assets in Russia.
The Financial Times revealed records showing that the Assad regime, despite its severe shortage of foreign currency, sent nearly two tons of $100 bills and 500-euro notes to Moscow's Vnukovo Airport for deposits in sanctioned Russian banks between 2018 and 2018. And 2019.
The unusual transfers from Damascus underscore how Russia, an important ally of Assad who provided him military support to prolong his regime, has become one of the most important destinations for Syrian money after Western sanctions drove it out of the financial system.
Opposition figures and Western governments accused the Assad regime of plundering Syria's wealth and turning to criminal activity to finance the war and enrichment. The cash shipments to Russia coincided with Syria's reliance on military support from the Kremlin, including from Wagner Group mercenaries, and the extended Assad family beginning to purchase luxury real estate in Moscow.
David Schenker, who served as US Assistant Secretary of State for Near Eastern Affairs from 2019 to 2021, said the transfers were not surprising, given that the Assad regime regularly sends money out of the country for “a combination of securing its illicit gains and securing its ill-gotten gains.” legitimate.” Syria's heritage abroad.
He added: “The regime will have to bring their money abroad to a safe haven so they can use it to provide a decent life…for the regime and its inner circle.”
“Russia has been a financial haven for the Assad regime for years,” said Iyad Hamed, a senior researcher at the Syrian Legal Development Program, noting that Moscow had become a “hub” for evading Western sanctions imposed after Assad brutally suppressed the 2011 uprising.
Assad's flight to Moscow as the rebels approach Damascus has angered some loyalists to the former regime, who see it as evidence of Assad's overriding self-interest.
His fragile rule has been supported by Iran and its proxy armed groups, which intervened in 2012, and Russia, which brought its warplanes to attack the remaining Syrian rebels and Islamist rebels in 2015.
Syria's relations with Moscow deepened significantly as Russian military advisors supported Assad's war efforts and Russian companies became involved in Syria's valuable phosphate supply chain. “It may be the Syrian state that is paying the Russian state for military intervention,” said Malik al-Abdah, a Syrian analyst based in London.
The Assad regime moved large shipments of US and euro banknotes to Russia between March 2018 and September 2019.
Russian trade records from Import Genius, an export data service, show that on May 13, 2019, a plane carrying $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 sent around €20 million in €500 banknotes. In total, there were 21 flights from March 2018 to September 2019 with a declared value of more than $250 million.
There were no such cash transfers between the Central Bank of Syria and Russian banks before 2018, according to records starting in 2012.
A person familiar with Central Bank of Syria data said foreign reserves had become “almost zero” by 2018. But because of sanctions, the bank was forced to make payments in cash, they said. The source said that it bought wheat from Russia and paid for money printing services and “defense” expenses.
They added that the central bank will pay according to “what is available in the treasury.” “When a country is completely under siege and sanctioned, all it has is cash,” the person added.
Russian records show that regular exports from Russia to Syria – such as shipments of safe paper and new Syrian banknotes from the state-owned Russian printing company Goznak, and shipments of replacement Russian military components to the Syrian Ministry of Defense – took place in previous years. After a large quantity of banknotes was transported to Moscow.
But there is no record that the Russian lenders who received banknotes from Damascus in 2018 and 2019 took any further shipments of loose cash from Syria or any other country over a decade.
Even as Syrian state coffers have been decimated by the war, Assad and his close aides have over the past six years taken control of significant parts of the country's devastated economy, people familiar with the regime's workings said.
First Lady Asma al-Assad, a former banker at JP Morgan. Built a strong position Influencing international aid flows and chairing a secret presidential economic council. Assad and his cronies also generated revenue from international drug trafficking and fuel smuggling, according to the United States.
Hamed, of the Syrian Legal Development Programme, said, “Corruption during the Assad era was not a marginal matter or a side effect of the conflict. “It was a way of governing.”
Syrian cash transfers had previously sparked sanctions from Washington. In 2015, the US Treasury Department accused former Syrian Central Bank Governor Adeeb Mayaleh and a Central Bank employee named Batoul Reda of facilitating large cash transfers for the regime to Russia, and managing fuel-related deals to collect foreign currency. The United States also accused Reda of trying to buy the chemical ammonium nitrate from Russia, which is used to make explosive barrels.
Records show that money delivered to Moscow in 2018 and 2019 was delivered to the Russian Financial Institution Bank, or RFK, a Moscow-based Russian bank controlled by Rosoboronexport, the Russian state arms exporter.
The US Treasury Department imposed sanctions on the bank this year for facilitating cash transfers, which enabled “millions of dollars in illicit transactions, foreign currency transfers, and sanctions evasion schemes on behalf of the Syrian government.”
In March 2018, records show that the Syrian Central Bank also shipped $2 million to another Russian bank, TsMR Bank, which was also sanctioned by the United States.
While Russian financial institutions were receiving cash from Syria, Iran, Assad's other international backer, devised plans to transfer hard currency to the besieged regime. Assad's senior financial men held important positions in these companies, according to company records analyzed by the Financial Times.
Yasar Ibrahim, Assad's closest economic advisor, is a shareholder in a Lebanese company called SAL Offshore Fields, along with his sister Rana, who was also sanctioned by the United States.
According to the US Treasury Department, Huqoq is being directed by the Iranian Revolutionary Guard's Quds Force and the Lebanese Hezbollah group to transfer hundreds of millions of dollars “for the benefit of the brutal Assad regime.” Ibrahim's role in the company has not been previously announced.
While Western sanctions forced the regime out of the dollar banking system, corporate records analyzed by the Financial Times show that Assad's top aides continued to move assets to Russia.
In 2019 The Financial Times reported Since 2013, the extended Assad family has purchased at least 20 luxury apartments in Moscow using a complex series of company and loan arrangements.
As recently as May 2022, Iyad Makhlouf, Assad's cousin and a major in Syria's General Intelligence Service, which allegedly monitors, persecutes and kills citizens, established a real estate company in Moscow owned by his twin brother Ihab called Zevelis City, according to Russian corporate records. displays.
Iyad's brother, Rami Makhlouf, was the regime's most important businessman, and at one point was believed to control half of the Syrian economy through a network of companies including the Syriatel mobile phone network. But after Rami fell out of favor with the regime in 2020, Syrians familiar with the regime say that Iyad and Ihab remained close to Bashar and his wife, Asma.
Corporate filings show that Zevelis City was founded by a Russian employee of Syrian-Russian banker Mudalal Khoury, who is under US sanctions and who has been accused by the US of facilitating large movements of money from Syria to Russia on behalf of the Assad regime.
Khoury appears to have played a pivotal role in integrating the regime's interests into the Russian financial system, and in 2015 the US Treasury Department said that Khoury “had a long association with the Assad regime and represents the regime's commercial and financial interests in Russia.”
Schenker said that given the pressure that Assad has faced from Western governments, especially the United States, for more than a decade, “Assad always knew that he would never be acceptable company in Paris, for example.”
“He wasn't going to buy apartment buildings there, but he also knew that if this was going to end, it was going to end badly. So they had years to try to smuggle money out, to create systems that would be reliable safe havens.”
