Europe's news in English

COPY LINK

POLITICS

French prosecutors open probe into Russian oligarchs

French prosecutors have opened an investigation into the assets owned by Russian oligarchs, a legal source said on Monday.

Published: 25 July 2022 17:22 CEST

French prosecutors open probe into Russian oligarchs

A photo of a superyacht, seized by the French government, that is owned by a company linked to Igor Sechin, chief executive of a Russian energy giant. (Photo by NICOLAS TUCAT / AFP)

The probe is expected to look into possible money laundering and corruption.

The investigation, first reported by the Parisien newspaper, comes after anti-graft group Transparency International filed a legal complaint against oligarchs in France in May.

France has frozen Russian-owned assets worth billions of euros since the Kremlin’s invasion of Ukraine in February, including luxury yachts, ski chalets and property.

The country’s Mediterranean coast, high-end ski resorts and Parisian real estate market have long been favoured destinations for Russian cash for investment and leisure.

“The ambitions of the sanctions regime against Russia and the first asset seizures are running into difficulties in identifying the assets owned by sanctioned individuals,” Transparency International France said in a statement last month.

“In France, as elsewhere, the hunt for goods owned by oligarchs and others close to the Russian regime is at a standstill,” it added as it filed its legal case.

The French government has said it faces serious difficulties in identifying and seizing assets that are often owned by overseas shell companies.

Transparency International said it had “drawn up an inventory of real estate assets in France of several oligarchs and people close to the Russian regime”.

It said it possessed evidence of how the money used to pay for them came from illicit sources.

European Union countries have frozen assets worth €13.8 billion linked to sanctioned Russian and Belarusian individuals, according to figures from July 12.

The EU has so far adopted six sanction packages against Russia, including a ban on most Russian oil imports that was approved in early June.

The French probe will be led by specialised investigators at the Central Office for the Repression of Major Financial Crime, part of the National Financial Prosecutors’ Office.

Member comments

Log in here to leave a comment.

Become a Member to leave a comment.

S&P downgrades French credit rating in blow to Macron

In a statement, the American credit assessor justified its decision to drop France’s long-term sovereign debt rating from “AA” to “AA-” on concerns over lower-than-expected growth.

It warned that “political fragmentation” would make it difficult for the government to implement planned reforms to balance public finances and forecast the budget deficit would remain above the targeted three percent of GDP in 2027.

The S&P’s first downgrade of France since 2013 puts the EU’s second-largest economy on par with the Czech Republic and Estonia but above Spain and Italy.

The announcement will sting for Macron, who has staked a reputation as an economic reformer capable of restoring France’s accounts after low growth and high spending.

The risk of a ratings downgrade had been looming for several quarters, with the previous “AA” assessment given a “negative outlook”.

The surprise slippage in the public deficit for 2023 to 5.5 percent of Gross Domestic Product (GDP) instead of the expected 4.9 percent did not play in the government’s favour.

France’s general government debt will increase to about 112 percent of GDP by 2027, up from around 109 percent in 2023, “contrary to our previous expectations”, the agency added.

Responding to the downgrade decision, Economy Minister Bruno Le Maire reaffirmed the government’s commitment to slashing the public deficit to below three percent by 2027.

“Our strategy remains the same: reindustrialise, achieve full employment and keep to our trajectory to get back under the three percent deficit in 2027,” he said in an interview with newspaper Le Parisien, insisting that nothing would change in the daily lives of the French.

Le Maire claimed the downgrade was primarily driven by the government’s abundant spending during the Covid pandemic to provide a lifeline to businesses and French households.

The main reason for the downgrade was because “we saved the French economy,” he said.

Government critics offered a different rationale.

“This is where the pitiful management of public finances by the Macron/Le Maire duo gets us!” Eric Ciotti, head of the right-wing Republicans party, wrote on social media platform X.

Far-right leader Marine Le Pen called the Macron administration’s handling of public finances “catastrophic” and denounced the government as being “as incompetent as they are arrogant”.

A credit downgrade risks putting off investors and making it more difficult to pay off debt.

Earlier this year, influential ratings agencies Moody’s and Fitch spared handing France a lower note.

S&P also maintained its “stable” outlook for France on Friday on “expectations that real economic growth will accelerate and support the government’s budgetary consolidation”, albeit not enough to bring down its high debt-to-GDP ratio.

“S&P’s downgrading of France’s debt simply reflects an imperative that we are already aware of: the need to continue restoring our public finances,” Public Accounts Minister Thomas Cazenave wrote in a statement sent to AFP.

Url copied to clipboard!