Julia Wallace is Associate Editor-in-Chief of the Organized Crime and Corruption Reporting Project (OCCRP).Ilya Rozovsky is OCCRP Senior Editor and Staff Writer.
The ultra-luxury Hotel Tannenhof perched high in the Austrian Alps. Staying in his one of his seven suites ($6,000 a night) means “your closest millionaire friend creates a ridiculously luxurious yet personal alpine retreat.” It is as if he decided to do it.”
But until last summer, there was no way to prove the luxury resort’s ties to VTB. VTB is Russia’s state-owned bank, dubbed the “piggy bank” of President Vladimir Putin.
After years of pressure by the European Union and corporate transparency campaigners, Cyprus finally released its corporate ownership register in June, giving half of the hotel’s stake to the Organized Crime and Corruption Reporting Project (OCCRP). could be revealed to be owned by a Canadian man who appears to have spent years in the presence of VTB Chairman Andrei Kostin, an oligarch loyal to Putin.
Incidents like this provide a timely illustration of a different kind of battlefield as Russian missiles plunge Ukrainian cities into darkness. It shows how secretive corporate structures are regularly used to disguise ownership and how corporate transparency is ensured. — Allow journalists, activists and investigators to expose them.
At least that was the case until recently.
If the opening of the Cyprus registry represents a clear victory for transparency campaigners, they have since suffered a bitter defeat. The Court of Justice of the European Union (CJEU) revoked the 2015 Anti-Money Laundering Regulations after filing a lawsuit. Also known as the “Beneficial Owners Register” for who actually owns the company.
But the Hotel Tannenhof case shows just how important it is for the public to have access to information about the real people behind corporate structures. Also, the amount of time the Russians spent disguising their hotel ties shows how much they valued their secrecy. .
VTB, which once owned hotels relatively openly, was sanctioned by the US and EU in 2014. Ownership of the Cyprus holding company was then passed to another company in Cyprus. instead of the real owner.
Even when Austria opened its corporate registration in 2018, hotels could still take advantage of loopholes. Its ownership was split evenly between his two ultimate shareholders, so it was assumed to have no real owners, so journalists were unable to identify who was who.behind it. And of course, days after the CJEU decision, the country cut off public access to the UBO registry.
But this case is just one of many.
For example, in Serbia, journalists have long followed the career of Nikola Petrovich, a close friend of the president. Until our colleague Dragana Pecho has access to his new UBO register in Luxembourg, they have Petrovich taking advantage of Luxembourg shell companies to invest in several major companies in Serbia. Little did I know that he was secretly dealing with a notorious businessman with ties to organized crime.
Pecho’s story about Petrovic may not have made headlines internationally, but it did make headlines in Serbia, where the government is in serious danger due to its links with criminal gangs. “If the Luxembourg UBO registry didn’t exist, the public would never have known about this,” she said.
So the gradual opening of the UBO Registry after 2019 was a godsend.
“This seemed like a game-changer for us,” said Myra Martini of Transparency International. Activists and journalists can finally start connecting the dots.”
And these points have led journalists to some dark places.
In Hungary, partners at news outlet Atlatszo have been trying to find out who owns Lady Mrd for years. Several Hungarian government officials were spotted sunbathing on a €21 million luxury yacht.
And eventually we were able to learn that it was owned by a Maltese paper company, but they hit a wall.The company had nothing to do with humans. was registered by PKF Fiduciaries International Ltd., another company acting as
Hungarian journalists were able to confirm that the PKF owned about 200 other companies, suggesting that the ship’s true owner hired them to cover up his profits. could do nothing about it. Malta, Cyprus, and Luxembourg before the requirement to create a registry. Massive data leaks like the Panama Papers and Pandora Papers have revealed who owns what.
But when Malta’s UBO registry finally went live in 2020, the true owners of the paper company were revealed almost instantly. It turns out to be a wealthy construction tycoon, Laszlo Sisi, who made a fortune on contracts with the Hungarian government.
Something similar happened in Lebanon, where the OCCRP was trying to confirm long-standing rumors that the central bank governor was hiding vast wealth offshore and in various European countries.After the Luxembourg registry went online. For the first time ever, the governor of Luxembourg has been found to be the “substantial owner” of three companies with nearly $100 million in fortunes around Germany, Belgium and the UK. Most of which he was frozen by the EU authorities after our exposure.
But now all this progress is in jeopardy.
The European ruling said journalists should be able to access corporate registers under certain circumstances, but it’s unclear what that means in practice, and the requirement is certainly more onerous. will be
It is neither wise nor moral to deny the public the right to know who is buying up the country’s most expensive real estate, or to take politicians on yacht cruises. Without it, finding the next hotel Tannenhof is no longer possible.
