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Bermudian sanctions against Russia begin to bite

Russian billionaire Roman Abramovich’s superyacht Eclipse arriving in Bermuda in 2014 (File photograph)

The value of Russian assets held in Bermuda is unknown, the British Government has said.

But a parliamentary briefing paper issued last week quoted a 2018 report from Global Witness which claimed Bermuda-based companies had received $7.1 billion in direct investment by Russian nationals between 2007 and 2016.

The international non-governmental organisation’s report said £34 billion was at present invested by Russians in the British Overseas Territories, with the majority in the British Virgin Islands.

The briefing paper also referred to a February 2022 report by Transparency International — a British anti-corruption organisation — which linked $830 million of property in the UK’s Overseas Territories and the British Crown Dependencies to Russians accused of corruption or who had close links to the Kremlin.

The invasion of Ukraine has prompted Britain and other countries to issue sanctions against Russia after it invaded Ukraine.

The sanctions were aimed at Russia’s financial sector and assets held by Russian politicians and oligarchs.

The sanctions must be implemented in Bermuda and the other Overseas Territories, although the British Government said last week that there may be a “small lag” in their implementation in British possessions.

The sanctions require the assets of organisations of “strategic significance” to the Russian Government, such as those involved with chemical, defence, energy, minerals, electronics, information and communications technology and financial services, to be frozen.

They also mandated strict sanctions on financial transactions.

The measures have already hit law firms on the island which represent Russian clients [see separate story], as well as accounting and other financial services firms.

It was reported this week that professional services firms PwC and KPMG, which have offices in Bermuda, severed ties with their businesses in Russia and Belarus.

David Burt, the Premier, confirmed on March 1 that British sanctions would also be enforced in Bermuda and that updates would be given “as the actualities of the sanctions come to light“.

He highlighted that about 740 of about 900 aircraft on the Bermuda Aircraft Registry were operated by Russian companies.

Lawrence Scott, the transport minister, told the House of Assembly last Friday that the sanctions could cost Bermuda $25 million in aviation revenue over 12 months.

But Mr Scott on Wednesday revised the figure for the projected loss to just $4 million and insisted there were no losses predicted for the island’s ship register.

He said there was no chance of Russian oligarch Roman Abramovich’s superyacht, Eclipse, being seized because there was “no Russian individual ownership on our shipping registry”.

The port of registration for the Eclipse when it was launched in 2010 was Hamilton.

The yacht was at the time the world’s largest and most expensive and still sails under the Bermuda flag.

The Marine Traffic website showed its location yesterday as off West Africa.

Mr Abramovich, the owner of London’s Chelsea Football Club, was yesterday added to the UK Government’s list of Russians subject to an asset freeze in a notice posted on the Bermuda Monetary Authority’s website.

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Published March 12, 2022 at 7:34 am (Updated March 16, 2022 at 10:23 am)

Bermudian sanctions against Russia begin to bite

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