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Russian oligarch handed £1m from frozen assets to pay luxury lifestyle expenses

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BM.GE
31.10.22 16:30
445
A Russian oligarch under investigation for breaching UK sanctions against Vladimir Putin has been granted living expenses of £60,000 a month by the Government to maintain his luxury lifestyle.

Despite Petr Olegovich Aven being investigated by the National Crime Agency (NCA), the Treasury has authorised the release of the living allowance, plus a one off £388,000 payment to settle “pressing debts”.

These include fees to keep one of his children at a private school in the UK for the following summer term.

Mr Aven, who owns a £300 million art collection along with three luxury homes in London and Surrey - including a £25 million mansion on the exclusive Wentworth Estate - is subject of an NCA investigation over allegations that he has broken international sanctions imposed after Russia's invasion of Ukraine.

In March this year Mr Aven was subjected to both financial prohibitions and a travel ban under 2019 regulations after being designated by the UK authorities as “a prominent Russian businessman and pro-Kremlin oligarch... involved in supporting the government of Russia” and being “associated with Putin”.

But after sanctions were imposed on Mr Aven, HM Treasury agreed to release the cash, worth a total of £1 million in the first year, from the oligarch's linked accounts.

The 67-year-old, who is described by the UK Government as an ally of Putin, told the Treasury Office of Financial Sanctions Implementation (OFSI) that the money was essential to meet his “basic needs” and those of his dependent family.

The NCA, who had been alerted to suspicious transactions concerning the importation of luxury cars, then went to court to freeze nine of the accounts linked to Mr Aven's companies over claims that they were being used to dodge sanctions.

The High Court has now set aside the terms of the freezing orders, ruling that the lower court had erred in law, allowing the case to be now reconsidered afresh by Westminster magistrates.

Setting aside the previous court judgement, Mrs Justice Collins Rice said: 'Where some or all of an applicant's assets are subject to sanctions, that is not necessarily an end of the matter.

“It may, in an appropriate case, be relevant to consider the prospects that other Treasury licences, not yet applied for, could permit the availability of funds not subject to AFOs for meeting 'basic needs' and 'reasonable living expenses'.”

The judge added: “A case where an applicant has considerable wealth and complex arrangements for applying it, may be an appropriate case.

“A Treasury licence is not a blade for hollowing out AFOs, and the sanctions regime is not a shield for protecting 'other assets'. Their potential application in any particular case is a matter for consideration of the evidence by the court dealing with an exclusions application.”

Decision condemned by critics of Putin regime

But the Treasury decision to unfreeze part of Mr Aven’s accounts has been condemned by critics of the Putin regime.

Chris Bryant MP said: “The government boasts of its sanctions regime but it seems they are quietly letting Putin’s ally oligarchs carry on regardless.”

Bill Browder, the British financier and arch critic of the Russian President, told The Telegraph: “Putin and every other Russian is watching like a hawk to see what the chinks are in our armour and this sets a very bad precedent for other oligarchs looking to loosen their sanctions. It's a slippery slope; first it's £60,000 a month, then it's the unfreezing of the accounts entirely."

Oliver Bullough, author of Moneyland and Butler to the World, said: "£60,000 a month does seem an awful lot of money to maintain a certain kind of lifestyle, including paying private school fees. And it does raise questions about the effectiveness of the sanctions, even if it is restricting Aven spending his own money.

"It’s really part of a wider problem of not having a stated sanctions strategy in this country. Are we punishing Putin and Russia, depriving oligarchs of their wealth or using the sanctions to help rebuild Ukraine?"

Oligarch worth an estimated £4bn

Mr Aven, who was pictured with the Russian president on the day the invasion of Ukraine began, was sanctioned by British and EU authorities in March.

He has an estimated fortune of £4bn, derived from an empire that includes Russia’s largest commercial bank and a stake in the ownership of retailer Holland & Barrett.

Mr Aven, a patron of the Royal Academy and Tate until he was sanctioned, has no bank account in the UK, but uses private companies to run his three homes, his family's personal security and pay for his children's school fees.

His 18-room mansion, in Wentworth, Surrey, is 29,000 sq ft, has six bedrooms, extra suites, a gym and a wing for a saltwater pool.

Mr Aven was one of the Russian oligarchs who used the UK courts to sue journalist Catherine Belton over claims in her book Putin’s People that he had links to the Russian President.

That case has been settled but Ms Belton told MPs in March this year that Mr Aven had used UK data laws to try to silence her, which she described as “reputation-whitewashing”.

Mr Aven has been approached for comment.

A Whitehall source said sanctions legislation allowed Treasury licences to be granted to "enable economic activity to continue, where there is an appropriate derogation, that would otherwise be prohibited under the applicable sanctions regime", Yahoo News reports.