Big News: Top Money-Launderer Deutsche Bank Ditches Russian Biz; More Oligarch Superyachts Seized

March 11, 2022
Reuters: Deutsche Bank to wind down in Russia, reversing course after backlash
By Tom Sims, John O’Donnell and Frank Siebelt

Deutsche CEO had said exit “would go against our values”

Investors criticised Deutsche’s Russia presence
CEO’s 2021 pay up 20%
FRANKFURT, March 11 (Reuters) – Deutsche Bank (DBKGn.DE), which faced stinging criticism from some investors and politicians for its ongoing ties to Russia, said on Friday in a surprise move that it would wind down its business in the country.

Deutsche joins the ranks of Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), which were the first major U.S. banks to exit after Moscow’s invasion of Ukraine. Those moves put pressure on rivals to follow.

Deutsche had resisted pressure to sever ties, arguing that it needed to support multinational firms doing business in Russia.

But on Friday evening in Frankfurt, the bank suddenly reversed course.

“We are in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients in reducing their operations,” the bank said.

“There won’t be any new business in Russia,” Deutsche said.

A day earlier, Deutsche Bank’s Chief Executive Christian Sewing explained to staff why the bank was not withdrawing.

“The answer is that this would go against our values,” he wrote. “We have clients who cannot exit Russia overnight.”

Bill Browder, an investor who has spent years campaigning to expose corruption in Russia, said that Deutsche Bank staying was “completely at odds with the international business community and will create backlash, lost reputation and business in the West.”

“I would be surprised if they are able to maintain this position as the situation in Ukraine continues to deteriorate,” Browder told Reuters earlier on Friday.

The criticism came as Russian forces bearing down on Kyiv were regrouping northwest of the Ukrainian capital and Britain said that Moscow could now be planning an assault on the city within days.

Fabio De Masi, a former member of the Bundestag and a prominent campaigner against financial crime, said that Deutsche Bank had close ties to the Russian elite, many of whom faced sanctions and that the relationship, where it involved criminal Russian activity, had to end.

Deutsche Bank has said that it has pared down its Russian footprint in recent years. This week it disclosed 2.9 billion euros in credit risk to the country, and said exposure is “very limited”.

It also operates a technology centre with about 1,500 employees in Russia and opened a new main office in Moscow in December, which it said at the time represented “a significant investment and commitment to the Russian market”.

Russia has landed Deutsche Bank in hot water in the past.

The U.S. Department of Justice has been investigating it for years over trades that authorities said were used to launder $10 billion out of Russia, which has led to the German bank being fined nearly $700 million.

Deutsche Bank said on Friday that the DOJ probe “is understood to be ongoing”.

The row over Russia came as Deutsche Bank disclosed in its annual report that it paid Sewing 8.8 million euros ($9.68 million) in 2021, a 20% increase from a year earlier.

Overall, the lender paid 14% more, or 2.1 billion euros, in bonuses for 2021, rewarding staff for the bank’s most profitable year in a decade.

($1 = 0.9088 euros)

Reporting by Tom Sims, John O’Donnell and Frank Siebelt; additional reporting by Carolyn Cohn; editing by Miranda Murray, Jason Neely, Alexander Smith and Chizu Nomiyama

– – – –

Amazon: In his 2020 book Dark Towers, award-winning New York Times journalist and finance editor David Enrich reveals the truth about Deutsche Bank and its epic path of devastation.
Tracing the bank’s history back to its propping up of a default-prone American developer in the 1880s, helping the Nazis build Auschwitz, and wooing Eastern Bloc authoritarians, he shows how in the 1990s, via a succession of hard-charging executives, Deutsche made a fateful decision to pursue Wall Street riches, often at the expense of ethics and the law.


Soon, the bank was manipulating markets, violating international sanctions to aid terrorist regimes, scamming investors, defrauding regulators, and laundering money for Russian oligarchs. Ever desperate for an American foothold, Deutsche also started doing business with a self-promoting real estate magnate nearly every other bank in the world deemed too dangerous to touch: Donald Trump. Over the next twenty years, Deutsche executives loaned billions to Trump, the Kushner family, and an array of scandal-tarred clients, including convicted sex offender Jeffrey Epstein. . . .

– – – –
Even Deutsche Bank is getting out of Russia
by Matt Egan, CNN — Fri March 11, 2022
New York (CNN) In a significant reversal, Deutsche Bank announced Friday it is planning to shut down its business in Russia.

Russia owes Western banks $120 billion. They won’t get it back

“Like some international peers and in line with our legal and regulatory obligations, we are in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients in reducing their operations,” Deutsche Bank said in a statement late Friday.

Going forward, Deutsche Bank said there won’t be “any new business in Russia.” The move comes a day after first Goldman Sachs (GS) and then JPMorgan (JPM) Chase revealed plans to wind down their own operations in Russia.

It’s not clear what sparked the reversal from Deutsche Bank, which said earlier this week it has “limited” exposure to Russia, with gross loan exposure of about $1.5 billion. That’s more than twice the amount of exposure Goldman Sachs indicated it has.

“As we have repeatedly said, we condemn the Russian invasion of Ukraine in the strongest possible terms and support the German government and its allies in defending our democracy and freedom,” Deutsche Bank said in its statement.

In early 2017, Deutsche Bank was hit with more than $600 million in penalties over a $10 billion Russian money-laundering scheme that involved its New York, Moscow and London branches.

What happens when a Russian oligarch’s yacht is seized? — March 9, 2022
By Aurora Almendral & Clarisa Diaz
When French customs officers boarded the Amore Vero before dawn on Thursday (March 3), they found the crew urgently preparing to set sail—a month before the superyacht’s scheduled departure, and with repairs still unfinished.

The $120 million, 289-foot yacht is believed to be owned by Russian oligarch Igor Sechin, who heads up the state-owned oil major Rosneft. The officers seized the vessel in accordance with the EU’s sanctions on Russia (pdf, in French).

The Amore Vero remains moored in La Ciotat, a harbor town on France’s Cote d’Azure, awaiting a fate that Benjamin Maltby, an attorney who specializes in superyacht law for the UK-based firm Keystone Law, described as “completely unprecedented.”

In the hands of harbor authorities

The unique circumstances that led to the seizure or detention of the Amore Vero in France, the Lena and the Lady M in Italy, and the Dilbar in Germany, means their fates going forward will be different from yachts seized in the past.

Maltby says it’s not uncommon for superyachts to be detained. Outside the context of international wartime sanctions, yachts are normally seized as holders of value over disputes like unpaid mooring fees. A yacht could either be chained to the dock or not, and the crew remains onboard, at the expense of the owner, performing daily maintenance duties. Once the dispute is resolved, the yacht is free to sail.

The Russian yachts are expected to remain in the custody of the harbor where they were detained. (There is no global impound lot full of the superyachts of the criminal and delinquent.) However, since the owners of the Russian superyachts are sanctioned, they can’t pay the crew, or mooring fees. Maltby says the chatter on superyacht Facebook groups suggests crews on these yachts are not confident they will be paid and have abandoned ship, or will.

Without maintenance, Maltby said, “yachts want to self destruct and left to their own devices they do deteriorate and become dilapidated very quickly.” The rubber components on the engines start to crumble. Rainwater gets in, sunlight degrades the plastic. If it’s on the water rather than on a dry dock, salt water will begin to corrode the hull. Left long enough—the duration of a war that has already proven to be longer than anyone anticipated, for example—a yacht could even sink.

The cost of maintenance, Maltby says, is usually estimated to be 10-15% of the value of a yacht. At the lower end of the range, it costs $12 million a year to maintain the Amore Vero, which neither the harbor authorities nor governments seeking to punish Vladimir Putin’s allies are likely to shoulder. Maltby posits that depending on how long the sanctions are enforced, the yachts may be treated like captured warships, kept and maintained at a minimum level to keep them from sinking and polluting the surrounding waters.

Other ways to lose a superyacht

There are about 5,000-6,000 superyachts in the world, Maltby says. Of those, about 10% are owned by Russians, not all of whom, presumably, are Putin-allied oligarchs, meaning the number of superyachts subject to US and EU sanctions is likely in the dozens rather than the hundreds. And not all of those may need to be seized.

One yacht broker interviewed by the Associated Press expects a few Russian-owned superyachts will soon be sold at fire-sale prices as oligarch fortunes are wiped away by sanctions, an outcome that would likely undermine what the superyachts were conspicuous displays of in the first place. “One imagines it would hurt their pride and prestige,” Maltby said.

Other superyachts allegedly owned by Russian oligarchs have taken a different route. All vessels on the water are fitted with an automatic identification system, or AIS. Originally implemented to keep ships from bumping into each other, AIS also allows satellite tracking. On Feb. 23, days after the start of the invasion, the Amadea, disappeared from satellites off the coast of St. Maarten. The Galactica Super Nova flickered off the map seven days ago, as it left Montenegro, perhaps in the hopes that they can’t seize what they can’t find.

From the New York Times, March 12:

Both the [U. S.] Treasury Department’s Office of Intelligence and Analysis and the Navy’s Office of Naval Intelligence are investigating the ownership of superyachts associated with Russian oligarchs. A spokesman for the Navy and a spokeswoman for the Treasury both declined to comment.

The Justice Department has set up a task force to go after the assets of sanctioned Russian oligarchs. In a discussion with reporters on Friday, a Justice Department official said the task force would be investigating individuals who help sanctioned Russian officials or oligarchs hide their assets. Those individuals could face charges related to sanctions violations or international money laundering charges.

In addition, under recently published Commerce Department rule changes, if more than 25 percent of a plane or a yacht is made of U.S.-manufactured airplane or marine parts, it cannot go to Russia.

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