Switzerland Lifts Injunction on Russian Tycoon

by Alejandra Rocha

Tages Anzeigner, a major daily newspaper in Switzerland, reported on September 25 that the Swiss Federal Office of Police has denied Roman Abramovich the opportunity to establish tax residency in the canton of Valais due to his alleged involvement with money laundering and ties to criminal organizations.

Abramovich issued an application to set his permanent residency to the ski resort of Verbier in July 2016. When his application was immediately denied by Switzerland’s Federal Office of Police (FedPol), Anzeigner adamantly denied the accusations and obtained an injunction that banned any mention of FedPol’s allegations in the media. This injunction was revoked with a court ruling in the city of Lausanne, allowing Tages Anzeigner to publish its story on September 25.

Swiss cantons traditionally have the right to accelerate the process of granting tax residency to foreigners whose taxes can prove to be financially beneficial to the provincial government or local economy. In fact, the canton of Valais initially approved Abramovich’s application.

“Given his financial resources, he would be a very attractive taxpayer for the community and the canton,” said the head of the canton’s population and migration service. “We decided in his favor.”

Nevertheless, when the canton authorities forwarded the application to FedPol for final approval, the federal authorities knocked it down. Even though FedPol’s allegations have so far not been proven by Swiss authorities, the mere suspicion of illegality is enough for them to prevent his tax residence. Switzerland is actively working to reform a system that has enabled money laundering for many years in an effort to increase reliability, accountability, and transparency. According to BBC, “he is not the first Russian millionaire to have his application rejected by Switzerland, he just happens to be the most famous.”

In a statement on behalf of Abramovich, his attorney said,“Abramovich has never been charged with participating in money laundering and does not have a criminal record. […] Despite multiple requests, Fedpol has failed to provide any evidence supporting these defamatory allegations. In fact, Fedpol has failed to provide any evidence of criminality whatsoever.”

With an estimated net worth of $10.8 billion, the Russian oligarch ranks 140th on Forbes’s 2018 list of world billionaires. He has owned England’s Chelsea Football Club since 2015, a £90 million ($117 million) mansion in Kensington Palace Gardens, and Abramovich’s Navy, the world’s largest fleet of luxury yachts. He is also believed to be close to Russian President Vladimir Putin. According to the Guardian, “Abramovich became the poster boy for the privileged group of Russian moneymen who have made London their home over the last three decades.”

However, after a delay prevented him from traveling to the United Kingdom for Chelsea's victory over Manchester United in the FA Cup final and Britain’s tighter measures to monitor the flow of Russian money following the poisoning of Sergei Skripal, Abramovich withdrew his U.K. residency visa application. Since then, he acquired Israeli citizenship under Israel’s Law of Return. His Israeli passport allows him to visit Britain for up to six months a year.

If he decides to reapply for a U.K. residency visa in the future, Abramovich will be subject to stricter investigative financial controls than those in his last application. It seems that at the very least the United Kingdom and Switzerland are rapidly changing their policies toward Russian tycoons.