Saturday, May 18, 2024
 
 

New US actions against corruption and Russian malign influence in the Western Balkans

US sanctions applied November 16 under two separate Executive Orders

Source: US Embassy Sarajevo
US Department of the Treasury, Washington DC

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On November 16, the US Department of the Treasury’s Office of Foreign Assets Control, known by its acronym OFAC, designated eight individuals and six entities pursuant to a Western Balkans-related Executive Order and a Russia-related sanctions order.

In a coordinated action, the State Department also designated two individuals and 12 entities. 

This set of American Government sanctions is interesting because of the interwoven nature of the offenses, some being support of Russian malign influence in the Western Balkans and others being companies supporting Russia’s invasion of Ukraine. Several of the designated individuals were simply important crime figures involved in major corruption scandals also covered by the executive order.

In the crosshairs

As a result of the Treasury Department designation, all property, and interests in property of the designated persons described below that are in the United States or in the possession or control of US persons are blocked and must be reported to OFAC. In addition, any entities owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more sanctioned individuls are also blocked.

All transactions by US persons within or transiting the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC or exempt. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned individuals may expose themselves to sanctions or be subject to an enforcement action.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson said, “Russia has continued to use its influence in the Western Balkans to stymie the region’s integration into international institutions and organizations, as well as leverage key jurisdictions to facilitate its aggressive destabilizing activities … Today’s action reaffirms the US Government’s wider efforts to promote peace, stability, and functional democratic governance in the Western Balkans.”

Newly sanctioned entities

Bosnia and Herzegovina:

Savo Cvijetinovic is a member of the executive board of Republika Srpska President Milorad Dodik’s political party, the Alliance of Independent Social Democrats, in the Republika Srpska entity of Bosnia and Herzegovina. He is also a representative of Republika Srpska-based company BN Inzinjering, which is owned by a former deputy chief of military air transport in the Russian Armed Forces and a former commander of the Russian military’s air transportation component. BN Inzinjering facilitated the illegal transfer of helicopter engines manufactured in Ukraine to Russia via Bosnia and Herzegovina.  

BN Inzinjering is being designated for operating or having operated in the aerospace sector of the Russian Federation’s economy. Cvijetinovic is being designated for being or having been a leader, official, senior executive officer, or member of the board of directors of BN Inzinjering, a person whose property and interests in property are blocked.

Petar Djokic is currently the Republika Srpska Minister of Industry, Energy, and Mining. In 2017, Djokic signed an agreement with the Croatian Minister of Environmental Protection and Energy to build a pipeline from Croatia to the Bosanski Brod refinery, which is owned by a Russian company, in the Republika Srpska. Entering into such an agreement is a threat to the implementation of the Dayton Peace Agreement. Sanctioning Djokic sends a clear signal that the United States will not tolerate anti-Dayton behavior.

Djokic has been sanctioned for being responsible for or complicit in or having directly or indirectly engaged in a violation of an act that has obstructed or threatened the implementation of any regional security, peace, cooperation, or mutual recognition agreement or framework or accountability mechanism related to the Western Balkans, including the Prespes Agreement of 2018; the Ohrid Framework Agreement of 2001; United Nations Security Council Resolution 1244; the Dayton Peace Agreement; or the Conclusions of the Peace Implementation Conference Council held in London in December 1995, including the decisions or conclusions of the High Representative, the Peace Implementation Council, or its Steering Board; or the International Criminal Tribunal for the former Yugoslavia, or, with respect to the former Yugoslavia, the International Residual Mechanism for Criminal Tribunals.

Dusko Perovic is the long-serving head of the Republika Srpska representational office in Moscow. Perovic has been integral to arranging interactions between the Republika Srpska President Dodik, his party, and Russian officials. Specifically, he has routinely lobbied for meetings between Dodik and Russian President Vladimir Putin. Perovic also served as the go-between for the Dodik-led Republika Srpska government and a prominent Russian billionaire. Despite being a Republika Srpska government employee, Perovic was employed by two of the billionaire’s firms during the same time that the billionaire was in the process of concluding a profitable deal with the Republika Srpska government. Perovic additionally owned shares in at least one of the billionaire’s offshore entities.

Sanctions against Perovic are being levied against him for having acted or purported to act for or on behalf of, directly or indirectly, Dodik, a person whose property and interests in property are already blocked.

The US designated Dodik on January 5, 2022, for being responsible or complicit in a violation of, or an act that has obstructed or threatened the implementation of, the Dayton Peace Agreement, the accords that ended the 1992-1995 Bosnian War,  as well as for being responsible for or complicit in, or having directly or indirectly engaged in corruption related to the Western Balkans. The US also previously designated Dodik on July 17, 2017, for obstructing the Dayton Peace Agreement.

Montenegro:

Miodrag “Daka” Davidovic has laundered money for decades for crime syndicates, strengthening his influence and carving out his criminal enterprise of cigarette, oil, and arms smuggling in Montenegro. His corrupt activities enabled Russia’s efforts to compromise the independence of the country’s democratic institutions and judiciary, including its efforts to influence electoral outcomes. He was also implicated in the scandal that led to the arrest of North Macedonia government Secretary-General Dragi Rashkovski, a top lieutenant of former North Macedonia Prime Minister Zoran Zaev. Rashkovski allegedly received a bribe from Davidovic in order to have a meeting with Prime Minister Zaev to advance Davidovic’s business interests. From 1991 to 1992, Davidovic served as Minister of Trade in the government of the self-proclaimed Serbian Autonomous Region of Bosnia and Herzegovina.

Davidovic is being designated pursuant to E.O. 14033 for being responsible for or complicit in, or having directly or indirectly engaged in, corruption related to the Western Balkans, including corruption by, on behalf of, or otherwise related to a government in the Western Balkans, or a current or former government official at any level of government in the Western Balkans, such as the misappropriation of public assets, expropriation of private assets for personal gain or political purposes, or bribery. Additionally, Davidovic is being designated for being responsible for or complicit in, or having directly or indirectly engaged in, actions or policies that threaten the peace, security, stability, or territorial integrity of any area or state in the Western Balkans. 

Branislav “Brano” Micunovic has been a leading figure in organized crime in Montenegro for decades, dating back to the former Yugoslav era. He is most known for his illicit cigarette smuggling enterprise that corrupted and undermined the independence of Montenegro’s democratic institutions.

The sanctions against Micunovic are for being responsible for or complicit in, or having directly or indirectly engaged in, corruption related to the Western Balkans, including corruption by, on behalf of, or otherwise related to a government in the Western Balkans, or a current or former government official at any level of government in the Western Balkans, such as the misappropriation of public assets, expropriation of private assets for personal gain or political purposes, or bribery.

North Macedonia:

Sergey Samsonenko is a dual citizen of Russia and North Macedonia and a wealthy businessman residing in North Macedonia. Between 2017 and 2018, Samsonenko and his wife, Irina Samsonenko, also a dual citizen of Russia and North Macedonia, purchased land from Jordan Kamcev (the United States designated Kamcev on July 19, 2023, for being responsible for or complicit in, or having directly or indirectly engaged in, corruption related to the Western Balkans). This purchase eventually triggered Samsonenko to testify in North Macedonia court during the “Plots on Vodono” trial in which both Kamcev and his mother Ratka Kunoska Kamceva (Kamceva) were indicted for money laundering. In 2021, Samsonenko made payments to his wife Irina. In that same timeframe, Irina transferred money to Kamchev Konsalting Skopje DOOEL (Kamchev Konsalting) and Orka Fajnans Skopje DOOEL (Orka Fajnans); both companies are associated with Kamceva. Also, in that same timeframe, the money transferred to Kamchev Konsalting and Orka Fajnans was used to pay a loan associated with Orka Holding AD (Orka Holding), a company associated with Jordan Kamcev. Additionally, Samsonenko and his wife purchased the company Sistina Lajf Kear Sentar Skopje DOOEL (Sistina Lajf Kear Sentar), another entity implicated in the “Plots on Vodono” trial, from Kamcev and Kamceva. Finally, Bet City International DOO Skopje (Bet City), a sports betting shop, is half owned by Samsonenko and half owned by Orka Holding, whose director is Kamcev.

Samsonenko, his wife Irina, and Kamceva are being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Kamcev, a person whose property and interests in property are blocked. Sistina Lajf Kear Sentar is being designated for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Irina, a person whose property and interests in property are also blocked.

Bet City finds itself sanctioned for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Samsonenko and Kamcev, persons whose property and interests in property are blocked pursuant to EO 14033.

Orka Holding AD is a Kamcev-associated conglomerate operating in a wide array of industries. Orka Fajnans and Kamchev Konsalting are consulting and business service companies within the Kamcev network and are owned by Kamceva.

Orka Holding is being designated pursuant to EO 14033 for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, Kamcev. Orka Fajnans and Kamchev Konsalting are being designated for being owned or controlled, or having acted or purported to act for or on behalf of, directly or indirectly, by Kamceva.

Details on the State Department’s designations

Russian influence in the Western Balkans is deeply intertwined with corruption and extremist political rhetoric, both of which threaten the rule of law, stability, and sovereignty of the region. As such, the Department of State is concurrently designating two politicians, as well as 12 of their Russia-based business networks.

Misa Vacic is the President of the Serbian Right Party in Serbia. In 2022, Vacic served as an observer in Russia’s sham referenda for the purported annexation of the Russia-occupied regions of Ukraine in September 2022. During interviews and press events, Vacic claimed to be an international observer, at the invitation of Vladimir Putin, and advocated for the purported annexation of these regions by Russia.

The Department of State is sanctioning Misa Vacic for being responsible for or complicit in, or having directly or indirectly engaged or attempted to engage in, activities that undermine the peace, security, political stability, or territorial integrity of the United States, its allies, or its partners, for or on behalf of, or for the benefit of, directly or indirectly, the Government of the Russian Federation.

Popovic Network and Russia-based Holdings

Nenad Popovic served as Serbia’s Minister from 2017 to 2022 and founded the nationalist Serbian People’s Party in 2014. Popovic owns numerous companies and holdings in Serbia and Russia. Since the 1990s, Popovic has used his Russia-based businesses to enrich himself and gain close connections with Kremlin senior leaders. Popovic continues to use his Kremlin connections to secure business for his holdings, most of which operate in the consulting, real estate, and electronics sectors of the Russian economy, to build his personal wealth through embezzlement and tax schemes.

The Department of State has designated Popovic for operating in or having operated in the electronics sector of the Russian Federation economy.

Popovic’s main Russia-based holdings include Asset Electro LLC and Asset Automation LLC. Mosen Esset Menedzhment LLC manages the day-to-day operations of Popovic’s Russia-based holdings.

The Department of State is designating Asset Electro LLC and Mosen Esset Menedzhment LLC for operating in or having operated in the electronics and management consulting sectors of the Russian Federation economy, respectively. The State Department is designating Asset Automation LLC for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Nenad Popovic.

Through Asset Electro LLC, Asset Automation LLC, and Mosen Esset Menedzhment LLC, Popovic controls a vast network of Russia-based subsidiaries dealing in real estate, engineering, and electronics. These include the following: Joint Stock Company All-Russian Scientific Research Design and Technological Institute of Relay Engineering with Experimental Production (JSC VNIIR), VNIIR Promelektro LLC, ABS Electrotekhnika LLC, VNIIR Gidroelektroavtomatika JSC, JSC VNIIR Progress, VNIIR Transstroi LLC, JSC ABS ZEiM Automation, Dominion Tverskaya Yaroslavskaya LLC, and Dominion Nikolski LLC.

The Department of State is designating JSC VNIIR and JSC ABS ZEiM Automation for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, Asset Electro LLC and Asset Automation LLC, respectively.

Also on the list are VNIIR Promelektro LLC, ABS Electrotekhnika LLC, VNIIR Gidroelektroavtomatika JSC, and JSC VNIIR Progress for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, JSC VNIIR.

VNIIR Transstroi LLC has been sanctioned for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, JSC VNIIR and Asset Electro LLC.

Finally, Dominion Tverskaya Yaroslavskaya LLC and Dominion Nikolski have been designated by the State Department for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Nenad Popovic.

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