Offshore intermediaries linked to Aliyev's regime suspected of laundering money through the Russian bank of the wife of Putin's KGB colleague
At the end of last week, Armenia recalled its ambassador from Israel. The reason for this decision was the supply of weapons from Israel to Azerbaijan, which, in particular, is used in hostilities against Armenia in Nagorno-Karabakh.
Global Investigation of Journalists
Israel has been supplying weapons to Ilham Aliyev's regime for many years, but documents on these transactions have become available to journalists only recently. On September 20 this year, more than 400 journalists from nearly 90 countries of the world have published a joint investigation of suspicious transactions of more than $ 2 trillion that went through American banks. This project was based on the confidential files of the US financial intelligence - the Financial Crimes Enforcement Network (FinCEN)
"Important stories" (IStories) has discovered confidential financial details of arms shipments in the archives of FinCEN from Israel to Azerbaijan.
We managed to find out that Israeli state-owned companies supplying weapons to Azerbaijan paid millions of dollars to offshore intermediaries associated with the regime of Azerbaijani President Ilham Aliyev. Israeli arms dealers transferred money for offshore intermediaries to a Russian bank, owned, in particular, by the wife of Sergei Chemezov, head of the state corporation “Rostec” and Vladimir Putin's KGB colleague.
Signs of money laundering
In December 2017, employees of The Bank of New York sent a report on possible money laundering for more than $ 100 million to FinCEN. In particular, the attention of employees of the American bank was attracted by the transactions of the Israeli state company Israel Military Industries Ltd (IMI Systems Ltd) to the offshore company “Jetfield Network” from the British Virgin Islands. In six months of 2017, IMI Systems Ltd paid “Jetfield Network” nearly $ 5 million.
IMI Systems Ltd is wholly owned by the state. Judging by the notes of American diplomats published by WikiLeaks, this company supplies Azerbaijan with missiles for multiple launch rocket systems, including “Grad” and “Lynx”, which are actively used in the battles in Nagorno-Karabakh these days.
Despite the fact that “Jetfield Network” is registered in the British Virgin Islands, the firm was serviced by the Russian bank “International Financial Club”. Its main shareholder is businessman Mikhail Prokhorov (he owns 47.8%). And another 6.5% belongs to Ekaterina Ignatova, the wife of the head of “Rostec”, Sergei Chemezov.
Back in 2016, representatives of the American The Bank of New York contacted the “International Financial Club” with a request to understand why a company from the British Virgin Islands was serviced by a Russian bank and why it received funds from an Israeli arms supplier to Azerbaijan. The “International Financial Club” replied to their American colleagues that “Jetfield Network” has been serviced by the bank since August 2015; the main activity of the company is the provision of consulting and marketing services; and its only owner is a citizen of Azerbaijan Javid Huseynov. However, judging by the nature of Jetfield Network's operations, Huseynov could only play the role of a nominal owner of the company.
Bribery of European politicians
As the reporters of the International Center for the Study of Corruption and Organized Crime (OCCRP) found out, Jetfield Network was directly connected with the Azerbaijani authorities and was used by them to bribe European politicians.
In particular, as the Italian prosecutor's office found out, Jetfield Network paid companies in 2013 associated with the Italian politician Luca Volonte, the former chairman of the European People's Party in the Parliamentary Assembly of Europe (PACE). “In connection with these payments, Volonte was charged with corruption. According to the prosecutor's office, he tried to deny the facts presented in the PACE report with criticism of the Azerbaijani regime for the maintenance of political prisoners and other human rights violations, ” OCCRP wrote.
From the letters intercepted by the Italian prosecutor's office, it followed that, on behalf of the Jetfield Network, the representative of Azerbaijan in PACE Elkhan Suleymanov was behind this payments. Volonte's payments (as well as of other European politicians, because the case with the former Italian parliamentarian was not the only one) was part of a large-scale plan called “Azerbaijan 2020: Into the Future with a Smile”. As OCCRP reported, citing letters intercepted by the Italian prosecutor's office, the plan aimed to improve Azerbaijan's international image, badly damaged by the constant harassment of independent journalists, the opposition and other human rights violations. This plan was a personal initiative of Azerbaijani President Ilham Aliyev.
As it became known today from the secret files of the US financial intelligence, the Jetfield Network was used by the Aliyev regime not only to bribe European politicians, but also to obtain suspicious payments from an Israeli arms supplier. And an important role in this was played by a Russian bank owned, in particular, by Chemezov's wife.
The “Jetfield Network” received money not only from an Israeli supplier of missiles for multiple launch rocket systems, but also from another weapons’ manufacturer, the state-owned “Israel Aerospace Industries Ltd (IAI)”. Azerbaijan is actively using IAI strike drones in the battles in Nagorno-Karabakh. A few days ago, Azerbaijani presidential advisor Hikmet Hajiev, in an interview with the Israeli portal “Walla”, praised the combat qualities of these drones: “If the Armenians are afraid of these drones, they must end the occupation,” he said.
As reported by “The Times of Israel”, state-owned IAI paid “Jetfield Network” and another offshore firm affiliated with the Azerbaijani government (also serviced by the “International Financial Club”) a total of $ 155 million. Moreover, these suspicious payments began immediately after the IAI in 2012 signed a contract with Azerbaijan for the supply of weapons worth $ 1.6 billion.
"IStories" managed to find in the secret files of the US financial intelligence and other payments from IAI to the companies associated with Azerbaijan, which were not previously known. From June 2016 to May 2017, IAI paid $ 2.8 million to a British Virgin Islands firm, Bakinshaat Group Ltd. This company, judging by its website, specializes in construction and participates in governmental projects in Azerbaijan.
At the same time, as stated in the report on suspicious transactions, Bakinshaat Group Ltd was serviced by the same bank "International Financial Club", where the Israeli supplier of missiles for Azerbaijan also transferred funds.
As noted by “The Times of Israel”, Israel joined the OECD convention against bribery to foreign officials in 2009. Thus, if Israeli law enforcement agencies prove that payments from state-owned companies to offshore firms associated with the Aliyev regime could, for example, constitute kickbacks for the supply of weapons, this will lead to criminal charges.
Why would this chain of Israeli state arms dealers, offshore intermediaries and the Azerbaijani authorities need a Russian bank? A co-owner of one of the Russian banks interviewed by “IStories”, who wished to remain anonymous for reasons of his own safety, suggested that the owners of the “International Financial Club” and the people behind the offshore intermediaries may have a close relationship. Because in such “delicate transactions”, when it comes to arms shipments and payments to offshore intermediaries, it is important to have a trusting relationship with bankers so that transactions are not immediately blocked.
And the Bank "International Financial Club" in this sense may be a logical choice for companies involved in arms supply schemes. Because one of its shareholders is Yekaterina Ignatova, wife of the head of “Rostec”, a state corporation that includes “Rosoboronexport”, the main exporter of Russian weapons. And “Rosoboronexport” also used the International Financial Club for transactions that aroused suspicion among American banks. For example, “Rosoboronexport” paid a close associate of the President of Indonesia; this country buys Russian fighters and other military equipment.
The “International Financial Club” did not answer the questions of the “IStories”. The story of arms supplies from Israel to Azerbaijan is the best proof of the thesis that corruption kills. If you sell weapons to dictators, while allowing offshore intermediaries associated with dictators to earn money, so that they bribe politicians around the world with the same funds to improve their own image, then sooner or later dictators will start killing with these weapons.
And this is not only about Azerbaijan.