Assad transfers 2 tons of Syrian euros and dollars to Russia

The Financial Times reported on the issue.

The outlet revealed that between 2018 and 2019, Assad's regime, facing a severe foreign currency shortage, transported nearly two tons of $100 bills and €500 notes to Moscow's Vnukovo airport for deposit in sanctioned Russian banks.

These unusual transfers from Damascus highlight Russia's role as a key destination for Syria's cash, as Western sanctions isolated Assad's regime from the global financial system, despite Moscow's military support keeping him in power. The cash shipments to Russia occurred as Syria grew reliant on Kremlin military support, including Wagner mercenaries, while Assad’s family invested in luxury Moscow properties.

“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 brutally put down an uprising in 2011. 

Assad's fragile rule was sustained by Iran and its proxy militants, who intervened in 2012, and by Russia, which deployed warplanes against Syrian rebels and Islamist insurgents in 2015. Ties with Moscow deepened as Russian military advisers supported Assad's forces and Russian companies tapped into Syria's lucrative phosphate supply chain.

Russian trade data from Import Genius, an export data service, reveals that Assad’s central bank dispatched 21 flights carrying over $250mn in cash to Moscow's Vnukovo airport between March 2018 and September 2019. Notable shipments included $10mn in $100 bills in May 2019 and €20mn in €500 notes in February 2019. These cash transfers, unprecedented before 2018 according to records dating back to 2012, marked a shift in financial dealings between Syria's central bank and Russian banks.

Russian records indicate regular exports to Syria, including shipments of secure paper and new banknotes from the Russian state-owned printing company Goznak, as well as replacement military components for Syria’s Ministry of Defence, both before and after the banknote transfers to Moscow. However, there is no record of the two Russian lenders that received the cash from Damascus in 2018 and 2019 handling any other bulk cash shipments from Syria or any other country over a decade-long period.

Despite Syria's war-torn state finances, Assad and his inner circle have, over the past six years, taken personal control of key sectors of the shattered economy, according to insiders familiar with the regime. Hamid, of the Syrian Legal Development Programme, said that “corruption under Assad was not a marginal affair or a side effect of the conflict. It was a way of government.”

Syrian cash transfers to Russia previously triggered U.S. sanctions. In 2015, the U.S. Treasury accused Syria’s central bank officials of facilitating bulk cash transfers and foreign currency deals for the Assad regime. Records show that between 2018 and 2019, Assad’s central bank sent over $250M to Russian banks RFK and TsMR, both sanctioned by the U.S. for enabling illicit transactions and sanctions evasion. Meanwhile, Iran funneled hard currency to Assad, with his close advisers, like Yassar Ibrahim, holding stakes in companies tied to these schemes, according to FT analysis.

While the cordon of Western sanctions forced the regime out of the dollar banking system, corporate records analyzed by the FT show that key Assad lieutenants continued to move assets into Russia. In 2019 the FT reported that Assad’s extended family had bought at least 20 luxury apartments in Moscow using a complex series of companies and loan arrangements. 

David Schenker, former U.S. Assistant Secretary of State for Near Eastern Affairs, said that given the pressure Assad had faced from Western governments, especially the US, for more than a decade, “Assad always knew that he would never be acceptable company in, say, Paris. 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.”