Lukoil's legal loophole: How an Irish firm skirts EU sanctions
The Russian oil company Lukoil, which earned nearly €100 billion (156 billion CAD) last year, is circumventing European Union sanctions thanks to a clever legal solution involving a subsidiary registered in Ireland, according to local service, The Currency.
The Irish company, named Lukoil Capital Designated Activity Company, was established in September 2021, just a few months before Russia's full-scale invasion of Ukraine. According to the Irish service, its sole purpose is to issue bonds on international markets, allowing it to raise billions of dollars for the Russian parent company.
Russian giant circumvents sanctions. Irish ruse
The total value of bonds issued through the Irish subsidiary amounts to approximately $2.3 billion (3.2 billion CAD). These funds ultimately end up at Lukoil's headquarters in Russia.
The Irish subsidiary itself is not subject to sanctions because the EU has not formally prohibited Lukoil's operations – unlike the United States and the United Kingdom. This allows the Russian oil giant to continue accessing Western capital markets despite international isolation.
The directors of Lukoil Capital are linked to Vantru, a corporate services firm based in Northern Ireland. The same people also manage the Irish branch of one of Moscow's airports, which has not gone unnoticed by journalists. This situation is also being reported by Ukrainska Pravda.
In an interview with The Currency, Vantru founder Rory Mulvaney confirmed that his company works with Irish firms linked to Russia. In his opinion, raising funds from Russian companies for payouts to Western investors is legal, provided such payments are not prohibited.
