The Canadian government has denied a request to lift economic sanctions imposed on the daughters of a Russian billionaire and alleged “close associate” of President Vladimir Putin.
Records obtained by Global News show that Foreign Affairs Minister Mélanie Joly rejected the appeals of Larisa and Ekaterina Fridman, whose father is banking tycoon Mikhail Fridman.
Wanted by the Security Service of Ukraine, Fridman is described in Global Affairs Canada documents as a “top Russian financier,” and associate of Putin who “acquired state assets through government connections.”
A native of Ukraine with Israeli citizenship, he is the founder and main shareholder of Alfa Group, which owns Alfa Bank, a major Russian financial institution. Forbes put his net worth at more than $18 billion.
Canada sanctioned Fridman in April 2022. His family was added the following month. The daughters applied to be taken off the list in December 2022, but were rejected by Joly on Nov. 24, 2023, records show.
Although the women, who live in New York and Tel Aviv, said they opposed the war in Ukraine and were financially independent, Joly wrote in letters rejecting their pleas that sanctioning families of Russian elites was justified.
Canada’s Foreign Minister Melanie Joly with Ukraine’s Foreign Minister Dmytro Kuleba in Kyiv, Ukraine, Feb. 2, 2024. (AP Photo/Evgeniy Maloletka).
Moving money through relatives and close associates is the most popular method used to dodge sanctions imposed in response to Putin’s invasion of Ukraine, the minister wrote.
“Maintaining limited financial ties or dependence on your father does not preclude him from attempting to use you to maintain access to his funds or circumvent sanctions prohibitions,” the letter signed by Joly said.
“Maintaining your listing helps Canada achieve its goal of preventing sanctions evasion by eliminating options for those supporting or facilitating the Russian regime.”
She said the decision was consistent with Canada’s goal of denouncing Putin’s attack on Ukraine and pressuring his regime “by imposing economic costs on Russia for its unlawful actions.”
The minister’s letter was among several documents filed in the Federal Court by the government after the Fridman sisters filed a case seeking to have the sanctions against them thrown out.
Their legal team wanted the court to seal the documents, arguing the women could face prosecution under Russian law, but on Friday a judge found they had not “demonstrated a serious risk.”
The court has not yet ruled on their appeal.
Canada has sanctioned more than 2,000 Russian individuals and entities to pressure the Putin regime over its war on Ukraine, suppression of dissent and global disinformation campaign.
The Fridman case is the latest appeal by those subject to the restrictions on their finances. Similarly, Joly denied a request for delisting made by Igor Makarov.
An oil and gas magnate worth $2 billion, Makarov argued he had denounced Putin, but Joly responded that he had only done so privately.
Both Fridman daughters were born in Paris and hold French and Russian citizenship. Larisa, a dancer, painter, and digital artist who sells t-shirts with cat and dog designs, is also an Israeli citizen.
Katerina has an MBA from Columbia Business School, and was a research manager at Commission for Art Recovery Inc., which “works towards the identification and restitution of Holocaust-era looted art.”
The departmental report that recommended keeping them under sanction said their father was a “top Russian financier,” and the measures prevented him from trying to “evade sanctions via a close family member.”
Russian President Dmitry Medvedev, left, and Alfa Group head, billionaire Mikhail Fridman, at the Kremlin in Moscow, March 17, 2009. (AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service).
Canada is a member of a group of countries that launched the Russian Elites, Proxies and Oligarchs (REPO) Task Force to seal gaps in sanctions, the Global Affairs Canada report said.
“The top evasion tactic identified by the REPO Task Force was the use of family members and close associates to maintain continued access and control of assets,” it said.
“The Task Force identified various instances in which Russian elites transferred their assets to their children or spouses, either in the period immediately leading up to a sanctions listing, or closely thereafter.”
The Global Affairs Canada Memorandum for Action on Fridman’s daughters noted that neither had lived in Russia since 1999, and that they maintained they were mostly financially independent.
But the Canadian officials argued that if sanctions against them were dropped, there was an “elevated risk” their father could use them to skirt the financial controls he faced.
Larisa Fridman received US$100,000 from her father in 2021 and 2022 because she was unable to work as a ballerina due to pandemic restrictions, according to the memo signed by Deputy Foreign Affairs Minister David Morrison.
Her sister, meanwhile, also received US$100,000 during the same period, and she “continues to receive occasional monetary gifts from her father,” Morrison wrote.
The four Ottawa lawyers representing the sisters declined to comment. But they wrote in letters to the government that the women were strongly opposed to the Russian war, and were proud of their Jewish Ukrainian culture.
Their grandparents are Ukrainian citizens, and their grandfather was still working in Lviv when the Russian invasion commenced, the lawyers wrote.
Global Affairs Canada ignored evidence showing the Fridman women were not being used by their father to evade sanctions, and that he had “provided very limited financial support to his children throughout their adult life,” the lawyers argued.
In their court appeal, they argued the government was punishing the women solely because of their “parental lineage,” and there was not a “sufficient nexus” between them and Russia to justify sanctions.
“Where adult children provide objective and credible evidence that they are not being used to circumvent sanctions, there are reasonable grounds for their immediate delisting from Canada’s Sanctions List.”
Ottawa lifted sanctions against Fridman’s ex-wife Olga Ayziman in February. The couple divorced in 2005. The government said only that “the Minister determined that the individual does not meet the criteria to be listed.”
Global Affairs Canada declined to comment on the case.
“We are committed to effective implementation of sanctions against foreign states, individuals and entities whose actions lead to grave breaches of international peace and security,” a spokesperson said.
Stewart.Bell@globalnews.ca
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