Syria's Assad dispatched $250 million cash to Moscow in 2 years to evade Western sanctions: Report

Syrian President Bashar Al Assad’s central bank airlifted around $250 million in cash to Russia. The transactions were being conducted in the span of two years when the then-Syrian leader was indebted to the Kremlin for military support, the Financial Times reported. The revelation added a layer to the Syria-Russia ties, especially after Assad and his family chose the country to flee after being ousted by the rebel groups.

Records uncovered by the Financial Times show that Assad’s regime, while desperately short of foreign currency, flew banknotes weighing nearly two tonnes in $100 bills to Moscow’s Vnukovo airport.

The currency was deposited at Western-sanctioned banks between 2018 and 2019. With the new information, Russia has become the most important destination for Syria’s cash as Western sanctions pushed it out of the global financial system.

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Reaffirms old claims

In the past, opposition figures in Syria and Western governments accused Assad of looting Syria’s wealth and turning to criminal activity to finance the war and his own enrichment. Not only this, the shipments of cash coincided with Syria becoming dependent on the Kremlin’s military support, including from Wagner group mercenaries. Assad’s family have been accused of buying luxury properties in Moscow, sparking concerns.

David Schenker, who was US Assistant Secretary of State for Near Eastern Affairs from 2019 to 2021, said that the transfers were not that surprising, given that Assad regularly sent money out of the country for “a combination of securing their ill-gotten gains and Syria’s patrimony abroad”.

“The regime would have to bring their money abroad to a safe haven to be able to use it to procure the fine life… for the regime and its inner circle,” Schenker told The Financial Times. “Russia has been a haven to the Assad regime’s finances for years,” said Eyad Hamid, senior researcher at the Syrian Legal Development Programme, noting that Moscow became a “hub” for evading Western sanctions imposed after Assad came to power.

Over the years, Syria’s relations with Russia deepened as Russian military advisers bolstered Assad’s war effort, and companies from Moscow got involved in Syria’s valuable phosphate supply chain. “The Syrian state could be paying the Russian state for a military intervention,” Malik al-Abdeh, a London-based Syrian analyst, told the Financial Times.

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As per the report, in March 2018, the Assad regime moved bulk shipments of US and euro banknotes into Russia between March 2018 and September 2019. In May 2019, a plane carrying $10 million in $100 bills was sent on behalf of the Syrian central government, which landed at Moscow’s Vnukovo airport.

In total, there were at least 21 flights from March 2018 to September 2019 carrying over $250 million, the Financial Times reported. There were no such cash transfers between Syria’s central bank and Russian banks before 2018.

Possible reasons why the money was sent

A person familiar with the ins and outs of the Syrian central bank told the Financial Times that the foreign reserves in Syria were “almost nothing” by 2018 due to numerous sanctions. Hence, Assad’s regime had to use cash to purchase goods from abroad. It bought wheat from Russia and paid for money-printing services and “defence” expenses, the source said.

The source noted that the bank would pay according to “what was available in the vault”. “When a country is completely surrounded and sanctioned, they have only cash,” the person added. Meanwhile, Russian records indicated that there were regular exports from Russia to Syria — such as shipments of secure paper and new Syrian banknotes from the Russian state-owned printing company Goznak, before and after the banknotes were sent to Moscow.

However, there are no records of the Russian lenders that ultimately received the banknotes from Syria and other nations over ten years. In the past, Syrian cash transfers had previously elicited sanctions from Washington.

In 2015, the US Treasury accused then-Syrian central bank governor Adib Mayaleh and a central bank employee called Batoul Rida of facilitating bulk cash transfers for the regime to Russia and managing fuel-related deals to raise foreign currency. Rida was also accused of attempting to procure ammonium nitrate from Russia, which is used in barrel bombs.

After a deep dive, it was revealed that the cash was delivered to the Russian Financial Corporation Bank, or RFK, between 2018 and 2019. The lender group based in Moscow is controlled by Rosoboronexport, the Russian state arms export company.

“Assad always knew that he would never be acceptable company in, say, Paris,” Schenker explained. “He wasn’t going to be buying apartment buildings there, but he also knew that if this was going to end, it was going to end badly. So they had years to try and spirit away money, to set up systems that were going to be reliable safe havens.”