US citizens are suing Western Union because of remittances to militants in the Donbas

US citizens are suing Western Union, Money Gram and Russian banks VTB and Sberbank because of remittances to the “DPR” group, writes Voice of America.

Фото: Depositphotos

The family of Quinn Lucas Schensman, who died on board Boeing MH17 at the age of 18, has filed a lawsuit against these financial institutions in US court. Why go to them? Is this lawsuit capable of changing something globally in the Russian-Ukrainian hybrid war?

“We realize that we cannot return our son, but we want to punish everyone involved in his murder,” this is how the family of the deceased argued their claim. And their lawyer, David Pressman, explained the essence of the claim this way: money was received by pro-Russian separatists with the assistance of US-based money transfer companies, as well as Russian banks. The DPR group used this money to buy weapons and ammunition. It is interesting that Pressman worked as Deputy Permanent Representative of the United States to the UN in 2014-2016, and the Russian-Ukrainian confrontation at the UN over the war in Donbass unfolded right before his eyes.

What you need to know about the payment system in the occupied territories in Ukraine

International companies can not carry out operations on ORDLO (certain areas of Donetsk and Lugansk regions - ed.), Since this is prohibited by sanctions. That is, neither Western Union, Money Gram, nor even Russian banks can transfer money to the occupied territory. At the same time, during the war years a “gray” financial system was built there. The groups in the occupied part of the Donbass have their own “Central Bank”, and the connection with the international financial systems takes place through the banks of the separatist region of South Ossetia. Since this territory is recognized by some states, it is possible through them to conduct operations in foreign currency, explains economist and financial analyst Alexei Kusch.

“Tens of billions of rubles pass through this financial system,” says the analyst.

In Donetsk and Lugansk, there is a business of withdrawing money from cards. An “office” with a Western Union sign still works in Donetsk.

“There is an underground office called Western, but the interest rates are crazy,” a Donetsk resident confirmed to Radio Donbas.Realii on April 5. Of course, this “Western” is fictitious - funds are brought there either from Russia or from territory controlled by the Ukrainian government.

Why are American citizens suing?

The claim may concern the period before the introduction of sanctions, when international transfers were still possible, or - and this is most likely - transfers between individuals that do not violate the conditions of the sanctions. If these are small amounts, it is impossible to control the origin of the funds and their destination, lawyers and financiers explain. And that means increasing the financing of terrorism.

“These are, as a rule, small amounts that are accumulated and then spent by those who head terrorist organizations,” explains Alexey Starodubov, director of the Crimean Expert Center. “This is done with the help of individuals who are supporters of these organizations: they receive funds and donate them to the “common pot.”

Russian economist Dmitry Nekrasov suggests that this lawsuit may have been leaked to investigate specific figures of the MH17 case.

“I think that they have actual confirmation of transfers to persons involved in the shooting down of the Boeing, so we are talking about the financial systems that made transfers to these persons. But it’s hard to say how to tie the responsibility of payment systems here,” says Dmitry Nekrasov.

What are the prospects of the case?

The lawsuit of US citizens may become an element of evidence of financing terrorism through Russian banks, but this is precisely the moment when the recognized status of terrorist organizations for LDNR in Ukraine itself is lacking, lawyer Alexei Starodubov said.

“The difficulty is that the DPR and LPR have not yet been recognized as terrorist organizations. This is a mistake of Ukrainian policy, because Ukraine should be the first to do this. Then it would be much easier for American lawyers, and for any others, to prove that terrorism financing took place. In our case, it all started with the Crimean occupation, and there it was much easier to prove, after the seizure of administrative buildings, Russian financing of terrorism on the territory of our country. Afterwards, this analogy had to be boldly transferred to the Donetsk and Lugansk regions: that financing took place according to the same model - through dummies from Russia,” says Alexey Starodubov.

There is little information about the case, and it is unknown how the US judicial system will act in this case, but for Ukraine this precedent will be useful, says international lawyer, member of the International Tribunal for the Former Yugoslavia Vladimir Vasilenko. In his opinion, if there was already a court decision that MH17 was shot down by a missile belonging to a unit of the Russian armed forces, this would make things easier. However, it is unlikely that any compensation can be directly awarded at the expense of banks not involved in the crime. Now, if Russia as a state is found guilty, that’s a different matter, the lawyer notes.

“In my opinion, what happened was a war crime. And the country whose armed forces committed the crime must be held accountable for it. Regular Russian military units and irregular ones are participating in armed aggression against Ukraine. That is, what are called terrorists are not terrorists at all. This is a formation of mercenaries who are financed, armed, controlled and managed by the Russian authorities. Therefore, this is a hidden type of armed formations, which in international law is called regular armed formations,” says Vladimir Vasilenko.

Nevertheless, according to the expert, any information relating to this war crime can be very useful for Ukraine. And it is obvious that the plaintiffs have such information if they are judged in court.

And what to do next with finances?

To counter the quasi-financial system of the Russian hybrid forces, tools, but Ukraine does not use them, says economist and financial analyst Alexei Kushch.

“Ukraine pursues a powerful sanctions policy and has strong and consistent Western allies, but at a systemic level, Ukraine has not built a sanctions policy technology specifically in the financial sector. In particular, through the FATF (an organization that combats the laundering of funds used to finance terrorism - ed.), Ukraine did not use any tools to counter Russian aggression, although the FATF released important materials that revealed the financial side of terrorist groups, for example, a report on ISIS . Ukraine could take these approaches as a model in order to exclude financing of the “LDPR,” says Alexey Kushch.

Meanwhile, the FATF generally excluded Russia from the list of states that do not sufficiently combat money laundering, and in fact, according to the organization’s methodology, the economist explains, Russia is “a civilized country that is involved in the financing of terrorist activities.”

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