US senators have urged the Obama Administration to impose sanctions on Russian banks that have helped the regime of Bashar al-Assad. According to RIA-Novosti, a letter signed by the senators and addressed to Jacob Lew, United States Secretary of the Treasury, states:

“Russian bank support violates international sanctions by enabling Syria to pay for imports and receive funds for exports. This assistance eases much of the financial burden on the Assad regime, allowing it to continue military purchases and pay the soldiers that sustain the war in Syria,” the senators wrote. “It is now more critical than ever that you swiftly designate those financial institutions that have profited from violating sanctions to prop up the Syrian regime.”

The letter is signed by Democrats Richard Blumenthal and Jeanne Shaheen, as well as Republicans John Cornyn and Kelly Ayotte.

It was followed by a rebuttal from the press office of VTB bank, cited by the Russian office of The BBC, and published on the bank’s official site:

“As is standard practice in our industry and in accordance with legislation, VTB takes client confidentiality extremely seriously, and would normally never comment on any allegations of this sort. However, given the defamatory and highly public nature of these claims, and their relevance to an extremely delicate geopolitical situation, we feel we have no other option but to state that the allegations made by the four US senators are completely unfounded.

VTB does not hold funds belonging to President Assad or any other member of the Syrian leadership. We consider these allegations to be a deliberate attempt to mislead the American people. These irresponsible insinuations are clearly intended to ratchet up tensions around Syria’s economic and financial situation, and to derail the recently launched peace process at any cost.”

One year ago, on September 19, 2012, Bivol published an investigation titled “Syrian Money Invested in EU through Russian VTB Bank.” It made public for the first time a leaked correspondence between officials from the Syrian Central Bank and VTB, claiming the Syrian Central Bank had a deposit of 2 billion euros in VTB and intended to increase it.

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ATTN: Mr. Sergey Avakov Managing Director Financial Institutions JSC VTB Bank 
 
Dear Mr. Avakov,

In reply to your message dated 26.10.2011 please be informed that following your good bank’s proposals, which we have received previously, we have raised the total amount of deposits up to more than EUR 2 bln. Please note that the matter of extending the terms of the Central Bank of Syria existing deposits at the moment remains under consideration. We shall inform you accordingly when any decision in this regard is taken.

Meanwhile, we kindly ask you to open an account in Russian rubles in the name of our bank or provide us with your instructions on the actions that we should take in order to open such an account.

We remain in anticipation of your reply and look forward to expanding our fruitful cooperation.

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Bivol was able to get in touch on the phone with Sergey Avakov from VTB. He did not deny the authenticity of the correspondence, but declined answering questions and directed us to VTB’s press office. Bivol’s written questions to this press office remain without answer.

In its investigation, Bivol reminded about the publications on the issue in Financial Times and The Wall Street Journal, along with statements of Russian Foreign Minister, Segei Lavrov, made on September 10, 2012 in Vladivostok. After a meeting with US Secretary of State Hillary Clinton in the Russian port city, he said that US sanctions on Syria and Iran were harming Russian business and that Russian banks have been particularly affected.

VTB –Partner of a Bulgarian “Bad Apple” Bank

The Russian VTB bank (Vneshtorgbank), allegedly holding the Syrian money, has an investment banking arm named VTB Capital, with offices in many European countries. In May 2012, VTB Capital opened a branch in New York. The Russian State owns 75.5% of the company. The Bulgarian subsidiary of VTB Capital is headed by former Finance Minister Milen Velchev.

At the end of October 2011, VTB Capital purchased 79.83% stake in Bulgaria’s Bulgartabac for 100 million euros. According to comments and publications in the media, Corporate Commercial Bank, KTB, is behind this deal. The email, sent to Avakov from the Syrian bank, shows that at that time the deposit of 2 billion euros has already been a fact.

Later, VTB and KTB also purchased the telecom Vivacom, which inherited the structure of the former Bulgarian State-owned telecom BTK. Most of of the voice and internet traffic flows through its optical backbones

On the phone, Velchev declined any comment on the Vivacom deal and directed the questions to VTB’s press office.

KTB’s interest in the telecommunication sector is nothing new. The bank’s owner, Tsvetan Vasilev, through its companies, also acquired the digital terrestrial television (DTT) multiplexes.

Tsvetan Vasilev is further said to be the cash machine behind the media empire of Irena Krasteva and her son Delyan Peevski, who own a large number of pro-government print press and TV channels. It is indicative that in June 2012, in the peak of the Syrian conflict, one of these TV channels – TV7, aired a series of reports from Damascus, which according to long-time Middle East correspondent journalist Ivo Inzhev, directly served the propaganda of the Syrian regime of Bashar al-Assad.

In a secret report from US Ambassador John Beyrle, sent to Washington in December 2006 and revealed by Wikileaks, KTB is listed as a “bad apple,” together with 7 others Bulgarian banks, “whose practices are repeatedly cited as questionable or …shady, funneling money for known criminals in money laundering schemes and involved in connected lending”.

“–Corporate Commercial Bank.  This bank is also known as “The Bank of Risk Engineering,” the most important ) and notorious – player in the energy field, participating in almost all energy consultancy projects.  For its close ties with Risk Engineering, owned by Bogomil Manchev, the bank is expected to be strongly positioned in the financing of the Belene project.  The state-owned National Electric Company, which conducts non-transparent electricity sales through middle-men such as Manchev and Kovachki, deposits its funds there.  The main shareholder of the this bank is Bromak Ltd., owned by Tsvetan Vassilev, which in 2004 was involved in a controversial privatization deal when it purchased the Sofia state railway plant for far lower than market value,” Beyrle wrote.

http://www.wikileaks.ch/cable/2006/12/06SOFIA1652.html

Million-Dollar Question: Has Delyan Peevski Traveled to Syria?

One year ago, we clearly formulated concerns about the source of funds of VTB invested in Bulgaria. We cited the restrictive measures on Syria of the EU countries, in force since April 24 2012, according to which “the assets of the Syrian Central Bank within the EU are frozen and it is prohibited to make funds or economic resources available.”

We sent questions about the source of these funds to VTB, the State Agency for National Security, DANS, the Prosecutor’s Office and the European Commission. Not a single answer has been received to date.

Today, we ask these questions again, but are adding one more, which can shed light on a number of shady dependencies.

Has Delyan Peevski visited Syria in recent years and how many times?

A question directly connected with the existence or inexistence of Syrian accounts in VTB. If not the Bulgarian media and services, then someone at the American Embassy can address this quite unordinary question and check flights to Syria.

Original text in Bulgarian here

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