On March 9, the European Union approved the fourth set of punishments against Russia and Belarus. On that day, 160 individuals were added to the list of personal penalties, including 14 businesspeople, and one of them is Andrey Melnichenko, the creator of the SUEK coal firm and the fertilizer company Evrokhim.
As one of the reasons for these penalties, the EU mentioned their meeting with President Vladimir Putin on February 24, after the start of Russia's “special operation” in Ukraine. The explanation stated, “Melnichenko is part of the most influential group of Russian businesspeople with close connections to the Russian government.”
Right after the EU decision, sanctions against Andrey Melnichenko were imposed by Switzerland, where his main business assets are registered – in this country they simply copied the EU decision regarding Melnichenko. However, already on March 30, Swiss sanctions against Andrey Melnichenko were lifted. He pulled off a simple and very basic trick, which for some reason the Swiss authorities “fell for” – Melnichenko left the board of directors of EuroChem, whose headquarters is located in Swiss Zug, and transferred the company to his wife Alexandra.
This was adequate for the Swiss State Secretariat for Economic Affairs (SECO) to approve the lifting of penalties against EuroChem.
The Swiss publication Handelszeitung refers to the response of the billionaire’s legal advisors, according to which “Alexandra Melnichenko is the sole beneficiary of the trust in Cyprus and, accordingly, owns 90 percent of Eurochem’s shares.” This simple solution allowed SECO to unfreeze the company’s accounts on March 30. When asked by another media outlet, Tages-Anzeiger, the agency replied that it was “happy to confirm that there is no ‘factual, convincing evidence’ that EuroChem is ‘owned or controlled by a sanctioned person’.”
Certainly, initially, the lifting of penalties by Switzerland from a Russian tycoon seems like a positive event for a nationalist patriot. However, it is worth exploring the biography of Andrei Melnichenko a bit, such a quick lifting of penalties, concealed by the simplest trick, raises more questions than joy.
The primary concern is the reasoning of the European Union when Melnichenko is included in the penalties list – “Melnichenko is part of the most influential group of Russian businesspeople with close connections to the Russian government.” Why did Switzerland decide to disregard this wording and enter into a clear conflict with the EU and the US? The formal reason – the transfer of assets to his wife – seems absurd. What is the motivation behind this decision of the Swiss State Secretariat for Economic Affairs?
Everything, as always, is simply straightforward – a citizen of the Russian Federation, who has amassed billions of dollars in Russia and brings them to Switzerland, cannot but collaborate with representatives of the intelligence services of this country (as well as other countries where Andrey Melnichenko conducts business). Simply because no one will let him establish a business in it and work. They will allow money to be taken out of the Russian Federation, but when the last dollar moves from Russia to a Swiss bank, the accounts will be immediately frozen, and the funds confiscated to the treasury.
Mr. Melnichenko earned a lot of money and went from being a university student in 1991 to being a billionaire on the Forbes list, ranked 7th among Russian billionaires and 65th in the world as of January 2022.
It seems that Melnichenko's cooperation with special services is not unusual. He mentioned starting with a currency exchange office in the early 1990s and earning $50,000, which led to obtaining a license from the Central Bank of Russia.
Operating a currency exchange in the early nineties was illegal and carried severe penalties. Many people either faced imprisonment or worked with the authorities to avoid punishment.
Melnichenko initially cooperated with the KGB and later became involved in banking. He became a co-founder of MDM Bank and served as the Chairman of the Board of Directors at the age of 21.
Melnichenko co-founded MDM Bank in 1993 and became its Chairman of the Board of Directors. It's known that big businesses in the 1990s were influenced by criminals and that MDM Bank's main activity was currency trading.
Bankers and businessmen in the 1990s had to navigate between security officers and criminals. Those who survived the challenges often achieved success, particularly as law enforcement officials gained influence in the 2000s.
As power shifted in the country, Melnichenko progressed from being a banker to an oligarch, focusing on resource-extracting industries that gradually came under his control. He couldn't access oil and gas, but found success in less visible areas.
Around 2000, the banking world shared big news about MDM and Conversbank merging to serve Russian nuclear industry businesses. As the manager of Converse, Melnichenko gained control over $3 billion in annual financial flows of the nuclear industry.
Andrey Melnichenko, chairman and owner of 76% of MDM Bank, and the then Minister of Atomic Energy Yevgeny Adamov planned to concentrate up to 80% of the financial flows of the nuclear industry in Konversbank, and then merge it with MDM Bank. Konversbank is interesting because, in addition to serving Minatom's businesses, many of them were its founders and state-owned enterprises. So, Konversbank itself was state-owned. Assets of state-owned enterprises, including shares of commercial firms, can also be credited to the authorities. But getting part of its property is possible only through an open competition, as provided for in the privatization law.
However, the shares owned by state-owned enterprises ended up in private hands in an incomprehensible way. Specifically, in the hands of Andrey Melnichenko, who as chairman of Converse Bank, controlled the flows of the strategic industry. This included production of electricity at nuclear power plants, export of uranium, processing of spent nuclear fuel, and construction of nuclear power plants in other countries. It's unbelievable that any state would transfer such functions to private ownership.
In 2000, the bank became a co-founder of the MDM Group for investments in industries such as coal mining, mineral fertilizer production, and pipe production. The MDM Group was known for extremely aggressive tactics in the redistribution of property. Even large authorities in the industry like Interrros and Alfa Group were defeated in clashes with them. The name of Andrei Melnichenko caused concern even to directors of large enterprises, who were considered masters in their regions. The owners of MDM usually did not resort to rough power grabs, but acted inventively and extremely boldly. Different courts issued incredible decisions in their favor, and employees of the FSFO, RFBR and the Ministry of Energy regularly supported them in conflicts.
As a result, the bank absorbed more than 50 joint-stock companies, factories, and mines, transforming them into three corporations – the Siberian Coal Energy Company (SUEK), the international chemical company Eurochem, and TMK (Melnichenko left the business of the latter in 2006 through an IPO).
This followed the common path of a typical Russian oligarch. However, the business needed access to international markets for further development. The entry of the MDM Group into these markets coincided with an interesting article in BusinessWeek magazine. The article predicted the further development of the Russian economy and wrote that "the West is considering Russian businessmen who are willing and able to enter into an aggressive struggle for the remnants of undivided property left in the state."
Among these businessmen, the name of Andrei Melnichenko was also mentioned, who was considered one of the most promising persons in terms of political influence. “He is thirty – and he wants to own the whole world,” – this is how one of the Western businessmen described Melnichenko then.
At this point, apparently, the interests of Melnichenko, his patrons, who left the KGB, and the Western intelligence services, who were looking for promising agents of influence among the new elites, converged in Russia. Melnichenko’s companies are entering Western markets, his representative offices are opening in Europe, Asia and America. Business is flourishing, as a result, Andrey Melnichenko will become a regular participant in the Forbes rating.
Everything suited everyone until February 2022. The Russian secret services sincerely believed that Melnichenko was acting only in their interests; the secret services of the West, most likely, did not indulge in such illusions, being content with the fact that they scooped the necessary information from a person close to the highest spheres of power in Russia; Switzerland, in which Melnichenko opened the head office of EuroChem in 2015, used his money and information with might and main; and Melnichenko himself was slowly earning money on this, remembering the old truth about the “affectionate calf”.
But then February 24 struck, and sanctions began to fall. Under which, which was quite expected, Andrey Melnichenko also fell. What prompted him to turn to his patrons in the Swiss special services (the fact that he is connected with them indirectly confirms the fact that an office was opened in this country in 2015, when there were also sanctions) is unknown. What prompted his patrons to withdraw Melnichenko from the Swiss sanctions through a primitive trick is also unknown. Maybe they just got tired of him or ended up on the lists of “depreciated”, that is, useless, agents. Here one can only guess.
As well as over why Melnichenko’s Russian curators (after all, no one thinks that the special services stopped “leading” him after he turned from a currency dealer into a businessman?) allowed him to act so primitively. Maybe they also decided to “write off”. But, most likely, this is a simple Russian carelessness – remember, for example, that Bashirov and Petrov “burned out” on their passports issued on the same day in the same place.
Be that as it may, the double (and this is at least) agent Andrei Melnichenko also “burned out”. How his future fate will turn out is unknown, because he is in Russia, and not in the UK or Switzerland, like many of his colleagues. Wait and see.
