As the conflict in Syria enters a critical phase and Western countries ramp up sanctions against the Assad regime, experts tell Al Arabiya it is unlikely that Russia will freeze assets connected to President Assad but that as the endgame approaches, regime allies could be more willing to cooperate with the international community.
In an interview with Al Arabiya in London, Iain Willis, Director of Research at business intelligence consultancy Alaco, said that Russia would be ‘the number one’ place to look for Syrian regime assets.
“Places such as Russia which have not imposed asset freezing measures would be a first place to look because that money is liquid and movable,” Willis said. “Other places like Switzerland, Dubai, and Lebanon are imposing more restrictions on Syrian linked asses so those become less appealing for the Assad family.”
Willis said Assad and his inner circle would be seeking to maintain a liquid asset base in places they can access easily, such as Russia.
The total value of assets available to the Assad regime held both inside Syria and in foreign countries is estimated to be $1 billion dollars. That includes Syrian state assets as well as funds and properties belonging to the Assad family and individuals associated with it.
Willis says $1 billion dollars is “a realistic expectation of the assets that may be available to the Assad family” pointing out that some of those assets would be held inside Syria but that “substantial amounts of money would be held overseas.”
The UK is reported to have frozen $100 million of Assad-linked assets held in Britain while Switzerland has designated between $70 - $80 million worth of funds. Other countries like the U.A.E, Lebanon and the European principality of Lichtenstein have also carried out freezing activities.
Since May of 2011 the European Union has imposed a series of economic sanctions against the Syrian regime. The latest restrictions, applied in June of this year, added Bothaina Shaaban, the president political and media advisor, as well as six entities associated with the regime, bringing the total to 129 individuals and 49 companies under the asset freeze.
On July 18, the U.S. widened its sanctions to include an additional 29 senior government officials as well as five companies linked to the Syrian government and a company owned by Rami Makhluf, a businessman with very close ties to Assad.
This follows previous sanctions imposed by the U.S. Treasury on more than 100 individuals and entities, as well as the entire Syrian government, including its Central Bank and oil companies.
David S. Cohen, Treasury Under-Secretary for Terrorism and Financial Intelligence said the latest restrictions “reflect the unwavering commitment of the United States to pressure the Assad regime to end the carnage and relinquish power.”
The task of tracking down hidden assets is very difficult because secretive regimes often use complex webs of global structures to hide their transactions.
For example, a mansion in Paris could be held via a Lichtenstein trust which is in turn owned via a Russian holding company that might have registered owners in Panama who then report back via a controlling law firm to a to Marshall Islands company.
And even when an asset as obvious as a property is known to be linked to a member of the Assad clan, it is even harder to prove the link between an asset and an individual.
“Even when it is obvious that [asset] is linked to sanctioned individuals, proving ownership requires step by step quite forensic examination of that chain of corporate ownership.”
The only way to gain insight into concealed assets, according to Willis, is to talk to people close to the regime such as business partners, hired help, and those who facilitate the movement and management of funds.
Such individuals become more willing to speak once a ‘visible and clear point of no return has been reached.”
“Once people realise that they are exposed as facilitating the transfer to illicit funds they realise that for their own self-interest it is better to be cooperating with national and international authorities,” Willis said.
According to Willis, the ‘point of no return’ has yet to be reached in Syria but that going forward it was likely more regime allies would come forward and be willing to cooperate with authorities.
“I think it is highly likely that the UK, the U.S. and Arab league states will have been applying more and more pressure to try and extract that kind of information for exactly this purpose.”
Carina Kamel is a Senior Correspondent for Al Arabiya based in London and can be followed on twitter @Carina_bn.