sitwap - The Cayman Islands says firms have frozen $7.3 billion in response to sanctions of Russian oligarchs.
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Financial regulators in the Cayman Islands say companies there have frozen $7.3 billion in accounts believed to be tied to Russian oligarchs in response to Russia’s invasion of Ukraine.
In a statement on Thursday, regulators in the islands, a British territory in the Caribbean, said they had received more than 400 compliance reports regarding asset freezes from financial service providers there as a result of sanction orders by Britain and the United States.
The Cayman Islands has long been a major administrative hub for offshore investment funds managed by U.S. hedge funds and private equity firms. The regulators did not provide any information about the ultimate owners of those frozen funds, nor did they identify any hedge funds, private equity firms or other investment vehicles holding those frozen accounts.
Robert James Berry, director of the territory’s Financial Reporting Authority, said in a statement that the asset freezes showed that financial services firms were able to “identify funds or economic resources owned or controlled, directly or indirectly,” to sanctioned oligarchs.
In response to a request for additional information, Mr. Berry said that the matter of sanctions was “an almost daily evolving situation” and that regulators were not in a position to release more details.
Advocates for increased financial transparency have said it is difficult to determine just how much money Russian oligarchs have in U.S. investment funds because those firms are not required to conduct the same kind of customer due diligence checks or anti-money-laundering inspections as banks.
One of Russia’s wealthiest men, Roman Abramovich, is believed to have invested several billion dollars in hedge funds and real estate-oriented private firms in the United States, The New York Times has reported. British officials imposed sanctions on Mr. Abramovich on March 10, but officials in the United States have not, in part because he has served as an intermediary in negotiations between Ukraine and Russia.
Mr. Abramovich is believed to have invested with dozens of U.S. funds over the past decade, but only a few have acknowledged having money tied to him. A small firm in Tarrytown, N.Y., helped arrange investments for Mr. Abramovich, which were made by the trustees and agents for a series of shell companies in the British Virgin Islands and more recently in the Channel Islands.
The Osiris International Group, a firm that serves as the registered agent for some of those entities, filed notices on March 15 with financial authorities in the British Virgin Islands that it was resigning from that post.
Miles Walton, a managing director at Osiris, said in an emailed statement that he could not comment on former or current clients. But he said the firm “complies with all applicable sanctions” and “does not represent or assist any sanctioned individual.”
Last week, two Democratic lawmakers called on the Treasury Department and the Securities and Exchange Commission to take immediate steps to require private funds in the United States to conduct the same kind of investor background checks as banks. Senator Elizabeth Warren of Massachusetts and Senator Sheldon Whitehouse of Rhode Island said scrutiny of offshore money needed to be enhanced to permit regulators to track assets from oligarchs and even terrorists.
And on Friday, a bipartisan group of U.S. senators, including Mr. Whitehouse, introduced legislation that would authorize financial regulators to require any company buying real estate, airplanes and yachts to disclose the ultimate beneficial owner. Mr. Whitehouse said the bill would “shine the light of transparency on these shady transactions.”
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