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U.S. Plans to Match Leaked Data to Russia Sanctions List, Says Source

  • Treasury seeks to identify people assisting violators
  • New list could be timed with EU vote on extending sanctions

The U.S. plans to search the millions of documents leaked from a Panamanian law firm for information about people who may have helped companies or individuals evade sanctions related to Russia’s role in destabilizing Ukraine, a person familiar with the matter said.

These people could be added to the U.S. Treasury Department’s list of sanctioned parties. In July and December last year, the Treasury’s Office of Foreign Assets Control, known as OFAC, named individuals and companies that it said were helping associates of Russian President Vladimir Putin get around the sanctions.

The Treasury could release a new list as early as June, which would coincide with the expected timing of the next vote by European Union countries on whether to extend their sanctions against Russia, matching the coordinated timing of the last two expansions.

"Clearly this trove of documents has the potential to give OFAC a number of leads and to help build the actual evidence" to support new designations, said Peter Harrell, a former deputy assistant secretary of state for counter-threat finance and sanctions. He added that he expected the EU to vote to extend sanctions against Russia for an additional six months.

Strained Relations

Russia’s relations with the U.S. and the European Union were strained after Russia annexed Crimea in 2014 in response to the ouster of Ukrainian President Viktor Yanukovych, who was backed by the Kremlin. In addition to banning dealings with some of Putin’s closest friends and allies, the U.S. and the EU limited some Russian companies’ access to borrowing and barred technology transfers to energy producers in response to Russia’s support for a separatist insurgency in eastern Ukraine. 

“The U.S. government intently focuses on investigating possible illicit activity, including violations of U.S. tax laws or sanctions, using all sources of information, both public and non-public," the Treasury said in an e-mailed statement. OFAC uses publicly available information, law enforcement and intelligence sources, anonymous tips, and self-disclosures to detect and respond to potential sanctions violations, it added.

The Treasury declined to comment on news reports that named companies, government officials and celebrities who retained the Panama-based law firm, Mossack Fonseca, to establish offshore bank accounts to hide their holdings or avoid taxes.

The leaked files show that at least $2 billion in transactions involved people and companies that had ties to Putin, according to reports published by the International Consortium of Investigative Journalists. Kremlin spokesman Dmitry Peskov dismissed the reports as an attempt to destabilize Russia by discrediting Putin.

Links to Putin

One key figure in the offshore transactions was a longtime friend of Putin, classical musician Sergey Roldugin, the ICIJ said. Roldugin, who isn’t sanctioned, is the godfather of Putin’s eldest daughter, according to the consortium.

Another of Putin’s longtime associates, Arkady Rotenberg, his childhood judo partner who was sanctioned by the U.S. in 2014, controls at least two anonymous companies that made huge payments into the network of transactions, the ICIJ said.

At the heart of the offshore dealings, according to the ICIJ, was Bank Rossiya. Its largest shareholder, Yuri Kovalchuk, was described by the Treasury as a “personal banker” for Putin and other top Russian officials when the lender and Kovalchuk were sanctioned in 2014.