Xavier Bettel, Jeannot Krecké, Vladimir Yevtushenkov and Etienne Schneider at the 45th anniversary celebration of East-West United Bank (EWUB). (Photo: Maison Moderne/Archives)

Xavier Bettel, Jeannot Krecké, Vladimir Yevtushenkov and Etienne Schneider at the 45th anniversary celebration of East-West United Bank (EWUB). (Photo: Maison Moderne/Archives)

Since the liquidation of Gazprombank's activities, EWUB has been the Russian bank in Luxembourg’s financial centre. It is part of the Sistema group, controlled by the oligarch Vladimir Petrovich Yevtushenkov. This puts it in the sights of the European Commission, which is tightening its sanctions.

Neither Vladimir Petrovich Yevtushenkov, nor his group Sistema, nor its subsidiary EWUB are currently on the European Union's list of sanctions targeting key figures in the Russian regime and companies linked to the state. Yet, it could only be a matter of time, as both Yevtushenkov and his company are an integral part of the system.

The impact on the financial centre would be limited, however. At the end of 2020, East-West United Bank's balance sheet totalled €677m. This figure should be seen in the context of the balance sheet of all the credit institutions in the financial centre, which, according to the Luxembourg Central Bank, is €953.69bn.

Who is Vladimir Petrovitch Yevtushenkov?

This oligarch--a term used to describe dubious businessmen with political influence since the fall of the USSR--has complicated ties with Russian president Vladimir Putin. These ties earned him a stint in prison against the backdrop of the oil dispute. Accused of money laundering during the takeover of Bashneft, an oil company, he went to prison and Bashneft was nationalised.

However, his sojourn in prison was swift, as was his return to grace at the time of the first wave of sanctions against Russia during the invasion of Crimea. It was a time of unity among the elite. And if the nationalisation of Bashneft cost Yevtushenkov almost his entire fortune, estimated at the time at $7bn, he retained control of his investment company, Sistema.

In September 2017, he attended a meeting of the Russian business elite surrounding Putin, who was preparing his re-election. On that day, investors worth some €192bn were gathered around the Russian president--the equivalent of the state budget revenue at the time.

Sistema, a conglomerate active in 25 countries

Sistema is a vast conglomerate founded in 1993, in which Vladimir Petrovich Yevtushenkov currently holds 59.2% of the shares. The rest of the capital is listed on the London Stock Exchange. It is the 25th largest Russian company in terms of turnover. With locations in 25 countries, the conglomerate is active in the IT, telecoms, electronics, real estate, hotel, trade, timber, media and pharmaceutical sectors.

Sistema acquired a 49% stake in East-West United Bank in 2005.

In a press release issued on 25 February, EWUB stated that it is “a standalone Luxembourgish Bank founded in 1974”. "We are not part of the Russian state or any banking group,” the bank stated.

This was not always true. EWUB was established in 1974 as a "daughter" bank of the Central Bank of Russia and as one of five foreign banks in the network of the Russian bank VTB.

Sistema acquired 100% of its capital in 2018. At the end of 2020, this capital amounted to €115m. For its 2020 financial year, the annual results of which were published in June 2021, the bank announced a loss of €4.1m, compared with a profit of €4.4m a year earlier, on a balance sheet of €677m. EWUB has €965m in assets under management.

Faced with the Ukrainian crisis, EWUB was forced to react. “We support dialogue as a means of resolving conflicts and are hoping for a quick and peaceful resolution of the current situation,” the bank stated while extending its “compassion” to the families and individuals who are directly or indirectly affected by the current situation.

Long-standing links with Luxembourg

The links between Yevtushenkov, Sistema and Luxembourg are not new and seem to be solid. This is evidenced by the fact that he is the Honorary Consul of the Grand Duchy of Luxembourg in the Russian Federation, with jurisdiction over the regions of Ekaterinburg and Khabarovsk. Other ties include the presence, during the commemoration of the bank's 45th anniversary in 2019, of prime minister Xavier Bettel (DP), the deputy PM and minister of the economy Etienne Schneider (LSAP), as well as Schneider’s mentor and predecessor at the ministry, Jeannot Krecké (LSAP).

Krecké joined the EWUB board of directors, which he chaired in 2012 following his resignation from the economy ministry. Schneider joined the board of Sistema in 2020, after leaving his post as economy minister. Another figure from the financial centre also features on the board, David Hagen, former director of the supervision of information systems and support FSPs at the Financial Sector Supervisory Commission, who was appointed last July.

Following the Russian invasion of Ukraine, .

This story was first published in French on . It has been translated and edited for Delano.