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Dublin’s role in the finances of the Kremlin

Energy giant Rosneft gained access to huge amounts of Western money through Dublin-based company

The energy giant Rosneft was one of the largest Russian companies targeted for sanctions by the EU and the US following Russia's attacks on Ukraine eight years ago, which led to the seizure of the Crimea and partial control over two of the country's provinces.

Since then, however, the Russian company has since gained access to huge amounts of Western money by way of a company based in Dublin’s Fenian Street, which has provided a route to get around these barriers without breaching the sanctions.

After the 2014 attacks the EU and the US introduced sanctions aimed at choking off access to Western funding for major Russian corporations with close ties to the Vladimir Putin regime, as they are both now doing again.

However, the Fenian Street-based company, CBOM Finance plc – whose bonds are listed on what used to be the Dublin Stock Exchange – raises funds from banks in London and New York, and then loans the money to its owner Credit Bank of Moscow.


The Moscow bank then loans the money to its customers, one of the most important of which is the Russian oil and gas behemoth Rosneft, a key target of the 2014 sanctions.

The most recent filed accounts for CBOM Finance in Companies House, Dublin, show that as of January 2020 it had loans out to the Moscow bank totalling $2.6 billion (€2.3bn). The earliest loan listed is dated just a month after the 2014 sanctions.

On Thursday the US president Joe Biden, in response to the Russian attack on Ukraine, included Credit Bank of Moscow on a new sanctions list, a move that may impact the role played by the Dublin subsidiary of the bank.


Rosneft is particularly close to the regime of President Putin. The Russian government owns a significant stake in the corporation, and its chief executive officer, Igor Sechin, has been working closely with Putin since at least the early 1990s. He was personally the target of sanctions in 2014.

The Russian is often described as the second most powerful figure in Russia. He is head of the Siloviki faction, a group of former security service agents who have played a central role in the Putin regime.

Rosneft was mentioned in a conversation that was allegedly secretly recorded in the famous Metropol Hotel in Moscow in 2018, when a number of men are said to have met to discuss using Russian oil money to fund a right-wing, nationalist party in Italy.

The Russian corporation was cited as an oil business that could possibly be used in the proposed scheme, rather than as the one it was intended would be used – a charge that Rosneft has vehemently denied.

A transcript of a tape was subsequently published by Buzzfeed News. "We want to change Europe," Gianluca Savoini, an aide to Italian politician Matteo Salvini, of the right-wing Lega Nord political party, is recorded as having said.

Savoini allegedly referred to "our allies and colleagues and other parties in Europe. Freiheitliche Partei Osterreichs in Austria, German Alternative fur Deutschland, France, Madame Le Pen, and other countries, the same. Hungary with Orban. In Sweden, Sverigedemokraterna. We have our allies."

Savoini then allegedly left the others at the meeting to discuss the technical details as to how oil might be sold by Russia, at a 4 per cent discount, to an intermediary, before being sold on to the Italian oil and gas corporation Eni.

The discount would allow for the creation of profits by the intermediary that would be channelled to the Italian party. However, there is no evidence that the structure allegedly mentioned was ever put in place.

Both Lega Nord and Rosneft said the story was untrue when it was first published by L’Espresso magazine in Italy, and they have vehemently denied that the conversation ever took place.


Rosneft has a subsidiary in Dublin that has bonds worth $2 billion listed on Euronext Dublin, the new name for the Dublin Stock Exchange. These bonds were issued prior to the 2014 sanctions, during a period when Dublin played a significant role in the flow of money from the Western banking system into Russia.

There is no evidence that any company based in Dublin has been involved in breaches of the sanctions imposed by the West, but the huge sums of money that flow through the Irish financial sector by way of what are called special purpose vehicles creates an obvious reputational risk.

Speaking generally about the use of special purpose vehicles, and not referring to the particular case, Stefan Gerlach, a former vice-governor of the Irish Central Bank, told The Irish Times that special purpose vehicles are "difficult to police".

During his time working with the Central Bank, between 2011 and 2015, Gerlach formed the view that the bank was intent on properly regulating Ireland’s large financial services sector. But he had concerns about the political attitude towards Dublin’s role in global finance.

“If you’re out there in the global economy trying to do something that you shouldn’t be doing, you will probably look for a small economy with a large financial centre, where the authorities don’t have sufficient resources to supervise all financial activity,”

During his time in the Central Bank he said there “was a certain naivety on the side of the Irish government”, adding: “They seemed to have an idea that the bigger the financial sector is, the better, but that’s not true. There could be things going on that one does not want to have going on. One needs to guard against that, but that might not be easy.”


Gerlach worked on monetary policy, not banking regulation, when in Ireland, and is now the chief economist with EFG Bank in Zurich, Switzerland.

He said that the Irish financial services sector had a good reputation internationally, and should be protected.

“Your reputation is worth something. Not all financial business that comes in from abroad is necessarily a good thing. One has to be a little suspicious as a policy-maker, not congratulate oneself too much if the business is coming in.”

The huge sums going through professionally-regulated financial services operations in the IFSC are one way in which Ireland is connected to Putin’s Russia.

Another way is through registered entities called “limited partnerships” which, an investigation by The Irish Times showed last year, are popular with people in Russia and other former Soviet states – including Ukraine – who want to hold assets anonymously.

"You can register a kind of offshore company in Ireland," the website of the Afortis Group, which has offices in Russia, Ukraine, and Latvia, says in a reference to Irish limited partnerships.

"We are talking about a classic offshore, but with an Irish residence permit," the Idea Legal Group, in Moscow, says on its website in relation to the same entities.

One of the attractions of limited partnerships is that there is no requirement to publicly disclose who they are really owned by. Using leaked documents from offshore service providers, made available to The Irish Times by the International Consortium of Investigative Journalists, it was possible to show that almost a quarter (813) of all Irish limited partnerships then registered were registered to an empty office on Lower Fitzwilliam Street, Dublin, and that many of the ultimate customers were in former Soviet republics.

Of the top five addresses for limited partnerships in the State, three were mailing addresses used by company formations businesses outside the State that were in turn administering Irish limited partnerships for clients in Russia and other former Soviet republics, often in tandem with services based in classic offshore locations in the Caribbean.


Following the publication of the reports showing that Ireland was being marketed as an "offshore" location in this way, Tánaiste Leo Varadkar said he had discussed it with his coalition colleagues.

“It would appear on the face of it that some of the arrangements that may be routed to Ireland are very dubious and we certainly don’t want to be part of any supply chain that people use to conceal their assets,” he said. “If we need to make some changes and close some loopholes, we’ll do that.”

Asked this week about this, a spokesperson for the Department of Enterprise said work had already been under way last year on a new law on limited partnerships, and that this work was been extended to incorporate the issues raised in the reports in The Irish Times.

Work on finalising the proposals will lead to a general scheme for a new Bill being brought to government “as soon as possible”, the spokesperson said.

One of the complicating factors for reforming the legislation is that limited partnerships play an important role in the Irish funds industry, and the Government has to be careful not to introduce reforms that would negatively impact on the sector.