Prominent Syrian businessman Rami Makhlouf revealed yesterday that he set up a network of offshore front companies in order to help the regime of President Bashar Al-Assad evade international sanctions, in a new uptake of his dispute with the regime.
Makhlouf, a cousin of the Syrian dictator and previously one of his regime's most loyal and powerful businessmen, fell out of favour and was targeted by Assad over the past year. Kept under house arrest within Syria, he has refused to comply with the regime's demands to hand over his wealth and resign from his business empire.
In a new Facebook post yesterday, however, he went a step further and acknowledged that he had been using front companies to help fund the regime over the years.
"They fabricated our embezzlement of funds and transferred it to our accounts abroad … Stop these unjust claims and read well the contracts," Makhlouf said, referring to the security forces' investigation of contracts signed by one of his companies, Cham Holding. "These companies' role and aim is to circumvent (Western) sanctions on Cham Holding."
That company, which was formed almost 15 years ago when Makhlouf set it up with 70 investors, became the largest Syrian company with regard to its capital and has held a monopoly of key property developments with the country.
Although the regime froze his assets late last year, its feud with Makhlouf became public in May when it imposed a travel ban on him and made the demand that he hand over the reins of his telecommunications company Syriatel.
Makhlouf's admission of his role in the setting up of front companies comes amid a recent revelation of businessmen tied to the Syrian regime and based in the Russian capital Moscow having done the same. According to that report, the vast business network consisting of the Makhlouf family and its affiliates utilised offshore tax havens and front companies in order to fund the regime prior to and during the course of the war.
The use of such tactics, as well as the international smuggling of narcotics, is particularly important to the regime in helping it evade the sanctions imposed on it by the United States and the European Union, the latest of which are the US sanctions extended under the Caesar Act.