Companies tied to Russian ownership were able to secure €2.5bn in public tenders across the EU since last February when Russia launched its full-scale invasion of Ukraine, an analysis by Czech think-tank Datlab shows.
Lawyer Lukas Kraus, from the NGO Reconstruction of the State who works with Datlab on the Resilient Europe project, told bne Intellienews that EU member states “have not fully employed their capacities” and that “improving of beneficiary ownership registers” is needed.
Datlab software tracked that 9,443 companies across the EU are co-owned by sanctioned persons, and that another 30,092 companies are Russian-controlled but not linked to a sanctioned person. At least 242 of these companies won tenders worth €2.5bn since sanctions were enacted, showing that the “average win rate did not decline at all in 2022”, the Datlab analysis highlights.
“We expected a drop in the tender awarded to the potentially sanctioned companies. In 2022 this did not happen,” stated the director of Datlab Jiri Skuhrovec, who highlighted that concealment of ownership is a much broader problem across the EU.
“Authorities and companies do not have the capacity to investigate ownership links in depth,” Skurhovec explained. For instance, only 35% of sanctioned and Russian owners of companies are correctly listed in the Czech registry of beneficial owners. The reality is blurred by chains of companies obfuscating links between listed owners and actual beneficiaries.
Another issue is that the EU sanctions lists still do not include some high-profile names from inside the Kremlin establishment. Datlab identifies Russia’s Deputy Prime Minister Yuri Trutnev or Russian aluminium and energy oligarch Viktor Vekselberg as two obvious examples. Vekselberg’s companies are contracted in seven EU member states.
While Trutnev and Vekselberg are on the US and Ukraine’s lists they are not sanctioned in the EU. Other examples include pro-Kremlin Ukrainian politician Viktor Medvedchuk or the wife to Sergei Lavrov Maria Lavrova.
Kraus told bne Intellinews “there should definitely be discussion on how to improve cooperation between the European Commission and the Financial Analytical Offices of the EU member states”.
“Establishment of a European-wide, transparent register of the final recipients of public funds could help,” Kraus said, adding that the use of “analytical tools employed in the study by Datlab to better track concealed ownership of companies inside the EU by Kremlin-linked figures” would help.