Assad’s Cousin Says Offshore Companies Helped Regime Evade Sanctions

Published: 28 July 2020

Rami Makhlouf copy

Rami Makhlouf, Syrian tycoon and cousin of Bashar Al-Assad. (Photo: Rami Makhlouf, twitter, License)

By Eli Moskowitz

The power struggle between President Bashar al Assad of Syria and his maternal cousin, Rami Makhlouf, appears to have intensified after the billionaire tycoon proclaimed in a Facebook post that he helped the regime set up offshore front companies so that it could avoid sanctions.  

Makhlouf, said to be the country’s wealthiest and most powerful businessman, appears to be retaliating to a series of government seizures of his companies, the last of which now seems to be Cham Holding, the second largest company in the country which has monopolized key sectors of the economy.  

As the majority owner, Makhlouf claimed in his post that the regime was going after his business on fabricated charges that he had embezzled funds out of the country, and that some of the entities of the company were instead used to help “circumvent sanctions imposed on Damascus.” 

The billionaire, who has been under sanctions by the U.S. and the E.U. for helping to bankroll the Assad regime is now decrying the Syrian government’s recent attempt to take over Cham Holding, which it has done by establishing a judicial guardianship over the web of companies. 

The government’s crackdown on his largest asset follows a series of demands by the cash-strapped government to pursue several of his other businesses. After issuing a temporary travel ban against him, it demanded that he pay hundreds of millions of dollars that it claimed had been evaded in taxes.

This was enforced through a seizure of Makhlouf’s bank assets in May, which followed a government order that demanded that Syriatel, a mobile phone company that he owns, had to pay a total of US$261 million to the state. Makhlouf was also reportedly banned from bidding on government contracts for five years.

A Syrian journalist from Damascus told OCCRP that the state-run and private media outlets have not been covering the ongoing tensions between Makhlouf and Assad’s regime.

"Not one single publication is writing anything beyond the official news, including Wednesday's decision to impose a legal guardian on Cham Holdings," he said. 

He added that in Syria there are two versions of this story, one which sympathizes with Makhlouf’s position, as is visible on his Facebook post, while the other is the official version dictated by the state. “No one is allowed to ask any questions,” he explained. 

A Syrian politician living in exile added to OCCRP that there are clear geopolitical dimensions of the rift between Makhlouf and the Assad regime. 

While Makhlouf remains in Syria, it is likely that he seeks refuge in Russia, which is where his brother, Hafez – once the director of Syria’s civilian intelligence agency – has been living since 2016.  

"Most of Rami Makhlouf’s assets, including those he managed on behalf of Bashar Assad, are already parked in Russia and Belarus, and other European destinations through proxies and offshores," he said.

"Whatever is left of his assets and wealth in Syria is peanuts compared to the billions he has transferred abroad,” the journalist added.