Oligarchs and Their Real Estate: How Effectively Is Austria Implementing the Russia Sanctions?
Almost three years after Russia's invasion of Ukraine, experts and politicians are puzzled as to how seriously Austria is implementing the EU sanctions against Russian oligarchs. Research shows that only nine properties have been frozen in this country, while other EU states are more transparent with their measures and enforce them more strictly.
In the past, Austria maintained close relations with the Russian elite. Kitzbühel is a popular destination for the Russian oligarchy. / Picture: © Vindobona.org
Although the EU has imposed comprehensive sanctions on almost 2,400 individuals and institutions, implementation in Austria appears to be slow. The domestic authorities are keeping quiet about the details, citing data protection and leaving the true number of sanctioned assets in the dark. Luxury properties, from penthouse apartments in Vienna to villas in Kitzbühel and on Lake Wörthersee, have long been targeted. But how effectively are the measures being enforced?
A look at the frozen properties
According to recent research by STANDARD and the Organized Crime and Corruption Reporting Project (OCCRP), the nine frozen properties are spread across Austria. These include, among others:
A penthouse on Lake Wörthersee, which was purchased in 2008 by Andrei Gorokhov, a member of the Kremlin-loyal United Russia party. Several luxury villas in Kitzbühel, including in Lutzenbergstrasse and Aschbachbichl. Properties in Vienna-Döbling, which also belong to Gorokhov have already been partially auctioned off. Property in Ramsau am Dachstein, which Boris Rotenberg, a close confidant of Vladimir Putin, acquired years ago. These properties were frozen as a result of EU sanctions. But this is just the tip of the iceberg.
Timid approach and questionable transparency
Compared to other EU states, Austria is particularly reluctant when it comes to implementing sanctions. While Latvia releases long lists of frozen assets on request, the Austrian authorities largely refuse to provide any information. The responsible Directorate for State Security and Intelligence (DSN) refers to data protection guidelines and explains that detailed information cannot be made public. However, there are indications that numerous properties could be attributed to sanctioned persons without being subject to measures.
Circumventing the sanctions: Insight into the Rotenberg Files
The “Rotenberg Files”, a comprehensive investigation by the OCCRP and other media, show in detail how Russian oligarchs circumvent sanctions, as reported by "DerStandard". More than 50,000 documents from the circle of the oligarch brothers Arkady and Boris Rotenberg show how a complex network of shell companies, frontmen, and financial service providers was used to protect real estate and other assets from sanctions.
For example, the famous “Putin Chalet” in Kitzbühel was purchased via a Cypriot shell company that was part of an international network of companies. Austrian authorities had difficulties identifying the true owners. Another example is a property on Lake Fuschl that officially belongs to the daughter of oligarch Roman Abramovich but has still not been frozen.
Billions frozen - but who benefits?
According to data collected across the EU, around 24.9 billion euros in private assets belonging to Russian oligarchs have been frozen so far. In addition, 210 billion euros from the Russian Central Bank have been blocked. These funds generate considerable interest income. In July 2024, the EU therefore released 1.5 billion euros of this income for the reconstruction of Ukraine for the first time. In Austria, the value of the frozen assets amounts to 1.6 billion euros, but exactly who is involved remains unknown.
Political pressure on the Austrian government is growing
The hesitant implementation of the sanctions has sparked political debate. The Neos party criticizes the fact that the Austrian authorities do not follow up indications of convoluted ownership sufficiently or too slowly. They are calling for an “oligarch task force” to specifically search for circumvention structures.
The Greens are also calling for an independent supervisory authority for money laundering in the real estate sector. The SPÖ is calling for a disclosure obligation for trust structures to identify anonymous owners. Meanwhile, the EU Commission is exerting pressure and emphasizing that assets that are not directly but de facto controlled by sanctioned persons must also be frozen. This applies in particular to transfers to relatives or gifts.
Conclusion: How effective is the sanctions policy in Austria?
Although Austria has officially frozen the assets of Russian oligarchs, the overall picture remains opaque. While other EU countries take a more consistent and transparent approach, Austria's reticence remains conspicuous. Complex mailbox structures make it difficult to access assets and lead to lengthy investigations.
The question remains: Will Austria tighten its approach to bring itself into line with European standards? Or will the country remain a comparatively safe haven for Russian oligarchs and their assets?