While there has been a lot of focus on Russian yachts in the chase for sanctioned assets, jets owned by Russians who find themselves on various sanctions lists have so far flown under the radar.
Bermuda’s government last week announced it expects a multimillion-dollar loss in fees from enforcing sanctions on Russian planes registered in the island.
The Cayman Islands is the dominant centre for Russian-owned superyachts, but Bermuda has a large share of Russian-owned jets on its register. Several planes on Cayman’s aircraft register, however, are purportedly linked to Russian oil company Lukoil.
According to Bermuda’s Premier David Burt, 740 of the 900 aircraft on Bermuda’s register are used by Russian operators, the Royal Gazette reported earlier this month.
Most of these aircraft were owned by leasing companies in Ireland, Burt said.
The island’s civil aviation authority was reviewing sanctions, he said, adding that “there is no question that the number of aircraft on the Bermuda Aircraft Registry utilised by Russian air operators will be greatly impacted”.
Lawrence Scott, Bermuda’s transport minister, projected that implementing Russia sanctions could cost Bermuda US$4 million in aviation revenue over the next 12 months.
He had previously put that figure at $25 million but clarified that this was the worst-case scenario, if all Russia-linked planes on the island’s register stopped operating.
Scott noted that Bermuda’s shipping registry revenue would not be affected, even though UK-sanctioned Roman Abramovich is the owner of two Bermuda-flagged superyachts – the Eclipse and the Solaris.
Scott said there was no chance of the yacht being seized because there is “no Russian individual ownership on our shipping registry”.
Russians banned from chartering jets
The United Kingdom, the European Union, the United States and Canada have all brought in various restrictions on the use of their airspace by Russian-owned or chartered aircraft.
Earlier in March, Canadian authorities fined the operators and passenger of a Cayman-registered jet for violating the country’s airspace restrictions for Russian citizens.
According to Transport Minister Diane Archer, the plane was intercepted in Yellowknife on its way from Geneva, Switzerland. The plane was en route to Resolute, Nunavut, where the Russian passenger wanted to participate in a planned Arctic land expedition using an all-terrain vehicle.
Transport Canada fined the Russian passenger who had chartered the aircraft and each of the two pilots of the flight C$3,000.
The aircraft operator, Dunard Engineering Ltd., was fined C$15,000.
The government of Canada has closed that country’s airspace to all Russian-owned or operated aircraft. Although neither the operating company nor the aircraft were Russian-owned, the ban also covers jets chartered by Russian nationals.
United Kingdom ban
In the UK, a similar ban is extended to “persons connected with Russia”. A Luxembourg-registered jet, allegedly belonging to Russian billionaire Eugene Shvidler, a friend of UK-sanctioned Roman Abramovich, was detained at Farnborough Airport last week.
EU sanctions covering jet ownerships, operations and charters also apply to Russian passport holders, even if they are dual citizens.
The US government initially issued a similar notice effectively prohibiting Russians from chartering private jets and entering North American airspace.
The United States Federal Aviation Administration had said in a notice: “The Notice to Air Missions (NOTAM) and regulatory orders will suspend operations of all aircraft owned, certified, operated, registered, chartered, leased or controlled by, for or for the benefit of a person who is a citizen of Russia. This includes passenger and cargo flights, as well as scheduled and charter flights, thereby closing US airspace to all Russian commercial air carriers and other Russian civil aircraft.”
As a result, jet service providers and operators had to check that no Russian nationals were on board any chartered planes that crossed into North American airspace.
This led to more passport checks and charter passengers having to certify that they are not dual Russian nationals.
However, on 10 March the FAA revised its notice and narrowed its scope from applying to “a person who is a citizen of the Russian Federation” to “a Russian person or entity identified by the International Trade Administration’s consolidating screening list”.
The notice applies to commercial and non-commercial aircraft operations.
Opaque ownership
German flight data tracking company WingX estimates that three-quarters of the more than 400 private jets owned by Russians are registered abroad.
But determining whether a registered jet is Russian-owned or operated may be tricky.
Although Cayman’s aircraft register shows the company that owns an aircraft, the publicly available information reveals little about the ultimate beneficial owner.
For instance, Dunard Engineering Ltd, the company that was fined in Canada, is identified as the owner of the Dassault Falcon 900 jet. The company was set up in 2010 in the British Virgin Islands with Mossack Fonseca as its agent and Pine Grove Foundation, another Mossack Fonseca outfit, as the shareholder. Dunard Engineering’s Swiss address is at an intermediary, Swiss company management provider ALF Consulting in Geneva.
Alexey Mordashov’s helicopter
One of the aircraft on the Cayman Islands register is a Bombardier AW 139 helicopter that belongs to Alexey Mordashov, widely described as the wealthiest Russian billionaire.
Mordashov has been sanctioned by the EU and Switzerland but not the UK or the US.
The Cayman-registered helicopter is a permanent feature on the Russian oligarch’s Cayman-flagged yacht Nord, which is currently in the Maldives, out of reach of the European authorities. The helicopter was last recorded touching down at Victoria airport in the Seychelles, where the Nord was moored prior to making its voyage across the Indian Ocean.
The helicopter is registered in Cayman under the BVI company Opus Enterprises Limited. Opus was the project name used by German shipbuilder Luerssen during the construction of the yacht Nord.
Mordashov’s other Cayman-registered luxury yacht, Lady M, has been detained in Italy.
Lukoil planes
Several planes on Cayman’s aircraft register are ostensibly linked to Russian oil company Lukoil. One of the planes, a Dassault Falcon 7X, is reportedly owned by Vagit Alekperov, the head of Lukoil.
The Cayman aircraft register shows the jet is owned by ARJ Ltd, a Cyprus-based company that is part of the Lukoil group structure.
Alekperov has not been subject to formal sanctions, but he is on a US Treasury list of oligarchs close to President Vladimir Putin. One of the reasons Alekperov has so far been spared may be that he is seen by western governments as an important political counterweight to Putin-ally Igor Sechin, the head of oil giant Rosneft.
Another aircraft on Cayman’s register is owned by Kav Avia Ltd and two others by Aircraft Management Company Ltd (AMCO). All of the aircraft have been previously linked to Lukoil’s VIP air service and at least two of the aircraft have made round trips from Moscow to Instanbul and Dubai earlier in March.
The Cayman Compass has asked the Civil Aviation Authority what action it could take regarding the planes, if either Lukoil or Alekperov, or Mordashov, were to be placed on the UK’s sanctions list, as UK sanctions are applied as domestic law in Cayman law.
However, the CAA only issued a boiler-plate statement in response, effectively stating that it intends to comply with the law: “Pursuant to The Russia (Sanctions) (Overseas Territories) Order 2020 and The Russia (Sanctions) (EU Exit) Regulations 2019, as amended, the Civil Aviation Authority of the Cayman Islands (CAACI), as the regulator of the Cayman aviation industry, is charged with ensuring compliance with said regulations as they apply to respective aviation assets and operations. In this regard, the CAACI works closely with the Financial Reporting Authority (FRA) and other Cayman Islands Government authorities to ensure enforcement of such sanctions as they apply to aircraft on the Cayman Islands Aircraft Registry (CIAR). Additionally, the CAACI adheres to internationally mandated financial standards and best practices for Due Diligence and KYC with respect to the registration of aircraft on the CIAR.”
Alekperov’s Cayman-flagged 70-metre yacht Galactica Super Nova was meanwhile moored in a marina in Montenegro until two days ago. The Balkan state is not a member of the European Union but has adopted EU sanctions against Russia, which means the yacht would have been detained if Alekperov had been on the EU sanctions list. The yacht is now in Turkey.
Although most aircraft on the Cayman Islands register are owned by companies, a few are held by individuals. Businessman Aleksandr Zanadvorov, former owner of the now-defunct Seventh Continent Russian supermarket chain, is named as the personal owner of a Eurocopter helicopter. The aircraft is mainly used in the south of France, where Zanadvorov owns a vineyard. He is not on any sanctions lists.
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