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Two Cyprus-based real estate companies, Eastleigh Trading and Dana Holdings, have ties to the wife of Belarusian leader Lily Lukashenko, the wife of his eldest son, Viktor.
A closer look at these companies reveals a maze of financial ties between Nicosia and Minsk.
Lukashenko’s reputation has been completely damaged in recent months, as he has tried and continues to use brutal protests to suppress protests for democratic change and to crack down on protesters following the rigged presidential elections in August.
October 12 The countries of the European Union, including Cyprus, agreed to freeze all of Lukashenko’s financial assets if they are located in their own countries.
On the same day, the crisis in Belarus escalated even more: Mr. Lukashenko authorized the police to use combat ammunition against protesters in the future.
According to an EU source, if the violence does not stop, the European Union sanctions may increase in the future. For example, they could include business magnates who helped the Belarusian leader get rich.
“The sanctions have a very broad legal basis. There are, in the true sense of the word, thousands of surnames that could be added to the list,” said the source.
Family matters
Vyacheslav Dudkin, a former head of the country’s Interior Ministry’s anti-corruption unit who fled Belarus, told Lukashenko that he was appointed director of Eastleigh Trading in 2012.
Dudkin said that Lukashenko, along with Belarusian tycoon Vladimir Peftiyev, owner of Eastleigh Trading, had used the company in various fraud schemes.
V. Peftijev was included in the previous black lists of the European Union. This happened in 2011, when the EU imposed sanctions on the tycoon for being considered “the main financial supporter of the Lukashenko regime”.
Mr. Lukashenko currently runs an art gallery in a Minsk shopping center that belongs to the Dana Holdings group of companies.
However, when asked by Euobserver if Lukashenko was an artist, Valery Cepkala, one of the main figures in the Belarusian opposition, replied: “She makes money for him very artistically. [Aliaksandrui Lukašenkai] with the help of – offer big discounts to your favorite companies ”.
According to the documentation of the Cypriot trading companies, in 2019. Eastleigh Trading continued to operate.
The “main activity of the company” was “services of operation and purchase, reconstruction and rental of real estate in Belarus”, according to 2013. audit report.
The same audit report also indicates that the company’s shares are owned “solely by non-Cypriots”. The company is said to be run by the Cypriot financial services company Centaur. Their representatives do not respond to phone calls.
And the Dana Holdings group of companies is based in Minsk. It is run by two Serbs, Boyano and Nebojsa Karachi. They are descendants of the Belgrade Caribbean business dynasty. Mr. Lukashenko has maintained friendly relations with members of this dynasty for many years.
L. Lukashenko in 2017 Belarusian financial documents also refer to her as “an important employee of Dana Astra.” Dana Astra is a subsidiary of Dana Holdings based in Minsk.
The documents of the group of companies show that the subsidiary of the Cypriot company has not been active recently, but Nebojsa Karic, indicating that its address is in Jumeirah Palm, Dubai, where Lukashenko visits frequently, in 2019. was one of the main shareholders of the company.
Over the past few years, Dana Holdings has received several orders to build luxury apartment buildings in the Belarusian capital.
The company was also one of the companies whose name echoed on the leaflets distributed in Minsk in support of Lukashenko when other companies went on strike in solidarity with the protesters.
But the company denies accusations by the Belarusian opposition that it has received an exaggerated favor from an unrecognized president.
“It just came to our notice then.” Dana Holdings … received building permits after winning an open tender and strictly complied with Belarusian laws, “said Dana Holdings, a spokesman for the public relations agency EM, based in London and Moscow.
In addition, attempts were made to separate the company from Lukashenko, alleging that she worked as a simple designer and did not return to work at Dana Astra when she went on maternity leave three years ago.
Labyrinths
The links between Minsk, Nicosia, Belgrade and Dubai reveal one strand of a complex maze of financial ties between Belarus and the European Union.
However, if the Cypriot authorities decide to take a closer look at financial relations with Belarus, they will have a long way to go.
According to the documents, the island’s small investments in Belarus are higher than in any other EU country.
Close ties between the two countries began in 1998, when a double taxation agreement was signed that allowed Belarusian companies to benefit from lower Cypriot taxes through subsidiaries that do not have a real place of business at the place of registration.
Statistics from Belarus show that in the best year, say 2013, such privileges saved up to a billion euros.
Some major Belarusian companies have also invested in Cyprus.
Belarusian information technology company Asbis, which has annual revenues of 1.6 billion, according to the company’s own report. established an international headquarters in Limassol, Cyprus.
Belarusian computer games company Wargaming Group, valued at $ 1.3 billion, according to the US news agency Bloomberg. has installed its headquarters in a glass skyscraper in the capital of Cyprus.
Wargaming Group has also acquired a 20% stake in Hellenic Bank, the second largest Cypriot lender in Cyprus, according to Cypriot media.
Furthermore, according to the Al Jazeera news agency, based on leaked Cypriot cases, Euobserver reported at least 19 Belarusians, including businessmen and their families, between 2017 and 2006. In 2019, it acquired Cypriot passports.
“Wargaming Group has become very influential in Nicosia,” a former employee of the Central Bank of Cyprus told EUobserver.
However, the Cypriot Ministry of Finance sees nothing wrong with this situation.
“Financial flows from Cyprus to Belarus are limited. In the Cypriot banking system [išskyrus „Wargaming Group“] there are no other investors, ”the ministry states on its website.
“It should be noted that Cyprus is an international center for business finance and services, with an extensive network of double tax treaties. Therefore, FDI [tiesioginių užsienio investicijų] flows to other jurisdictions are common, ”the ministry’s website said.
Cyprus declines to disclose whether it is aware of Lukashenko-related companies operating in the country. He also declines to comment on whether Belarusian assets were frozen at a time when the European Union imposed sanctions on the likes of Lukashenko and Peftiyev from 2011 to 2016.
But Cepkala, who ran a business park in Minsk before joining the opposition, estimates that Lukashenko has “committed more than $ 1 billion in private funds.”
Inflated wallets
Cepkala called on the European Union countries to pressure the regime to target companies that, according to him, have “become [A. Lukašenkos] wallets “.
However, even for the EU institutions, it is not easy to overcome the opacity of Belarus’ structures.
Suppose that in 2014 Peftiyev won a crucial case in a Luxembourg court: the court ruled that the EU Council had not gathered enough evidence to put a businessman on the sanctions list.
It is also difficult for journalists to get answers.
When EUobserver asked where Mr. Peftiyev currently lives and if he is still involved with Eastleigh Trading, representatives from his Minsk-based law firm, Revera, declined to answer these questions and threatened to take the website to court if the article mentioned about the earlier property freeze of V. Peftiyev.
“Creating … an image that contradicts an EU court ruling is wrong; it is misleading and can cause a lot of harm,” wrote Dmitry Archipenka, a spokesman for the legal services company, in an email.
According to leaked documents from the Panama Papers, Peftiyev and his wife Olga Makarova used to live in Malta. While the EU sanctions were imposed on Peftiev, Makarova established several companies in the British Virgin Islands.
“It just came to our knowledge then [„EUobserver“] authority to publish any information about V. Peftijev or his relatives, “said D. Archipenka.
„V. “Peftiev has not visited Belarus for many years, he does not run any company in Belarus or the European Union, he is not a shareholder in any EU company and, as far as I know, he is currently writing books,” Archipenka said.
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