Moscow front companies, tax havens tied to Assad’s ‘chemical arsenal’
13 Jul 2020

A Russian-Syrian business network has been accused of using Moscow front companies, tax havens in British overseas territories and European countries to transfer millions of dollars around the world for the Assad regime.

The network, run by a Russian-Syrian businessman called Mudalal Khouri and his brothers, is said to have helped the secretive organisation developing the regime’s chemical weapons to acquire raw materials and equipment, according to an investigative report being published today.

Global Witness, an international campaign group tracing money used for corruption, environmental and other abuses through the banking system, says the Khouri network helped President Assad’s uncle to set himself up in Moscow in 2012.

Mohammed Makhlouf, brother of the Syrian leader’s mother, is a longstanding figure in the regime, overseeing its finances and keeping them out of the reach of international sanctions.

According to Global Witness, the Khouri network helped Mr Makhlouf and his sons Hafez and Rami to buy $40 million of Moscow property. One Khouri brother is said to have used a network to channel funds for the Syrian central bank and the state oil company.

A bank in which the brothers were shareholders was used to hold Makhlouf family money, after Mr Makhlouf arrived in Moscow and until it was placed under US sanctions in 2014. The bank, Tempbank, eventually closed under the weight of sanctions in 2017.

Mudalal Khouri moved to Moscow in the 1970s but remained in touch with regime figures. The Soviet Union was the key ally of President Assad’s father, Hafez, who seized power in a coup in 1970, and Russia has remained close to the Assad family ever since, saving it from defeat in the civil war.

The Global Witness report is unclear as to the extent to which Mr Khouri and his brothers, Imad and Atiya, have acted as straightforward regime agents, or whether they are merely running a business enterprise with the regime as a client. Investigators say it is hard to establish how much all individual members of the Khouri “network”, which includes children and other relatives and a range of associates from bankers to a kebab chef, know about all aspects of the network’s operations.

One daughter of Mudalal Khouri, Sandra, has a degree from the London School of Economics and a flat in Mayfair. She is now involved in a Khouri enterprise to set up a Russian equivalent of PayPal.

Others may have, either for a fee or inadvertently, allowed their names to be used on company documents.

However, Mudalal Khouri was placed under US sanctions in 2015 for having “assisted or acted on behalf of the Syrian government, its central bank, and central bank officials”.

Imad and Atiya Khouri were sanctioned the following year, Imad for helping his brother and Atiya for a variety of sanctions-busting activities, including facilitating the business operations of the Makhlouf family. 

By Richard Spencer, The Times, 13 July 2020

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