Companies linked to sanctioned Russian billionaires are avoiding financial audits by exploiting a loophole in Dutch legislation, Dutch public broadcaster NOS reported.
According to the report, these billionaires are using a clause in Dutch law to classify their companies as micro-businesses, which allows them to hide the flow of money and avoid strict reporting requirements, even under international sanctions imposed for the invasion of Ukraine.
One such businessman is steel tycoon Alexei Mordashov. Mordashov’s Amsterdam-based company SMTT Holding, which is under EU sanctions, is worth €65 million but is classified as a micro-enterprise, which helps exempt it from disclosing key financial data.
Another example is Airport Alliance (Netherlands), a subsidiary of the mostly state-owned Russian VTB Bank. Its chairman is Andrei Kostin, a Putin ally. Safmar, a company linked to Mikhail Gutseriev, the Western-sanctioned billionaire, is also registered as a micro-enterprise in the Netherlands.
Under Dutch law, a company must have fewer than 10 employees, a balance sheet total of up to 450,000 euros or a net turnover of up to 900,000 euros to be considered a micro-enterprise.
Businesses with this designation – which was originally introduced to reduce bureaucratic procedures for small businesses – do not have to disclose profits, taxes or assets to the Dutch Chamber of Commerce and are not subject to mandatory audits or extensive financial reporting requirements.
