Fraud scheme worth millions and sanctions evasion: how the “Swiss” Ukrainian Oleg Tsyura and Phoenix Resources AG finance the Russian army by supplying Russian ferrochrome to Europe under the guise of Indian origin

Fraud scheme worth millions and sanctions evasion: how the “Swiss” Ukrainian Oleg Tsyura and Phoenix Resources AG finance the Russian army by supplying Russian ferrochrome to Europe under the guise of Indian origin

Circumventing sanctions: how Russian ferrochrome is freely sold worldwide.Answers should be provided by the SSU and the Prosecutor General’s Office. While Ukraine is bravely resisting the enemy, and the world is imposing sanctions on the aggressor country, there are those who help Russia circumvent restrictions, prolonging the life of the Russian economy. Despite the fact that the names of companies and specific individuals of such assistants are known, Ukrainian law enforcement ignores these facts. And we must react.

Recently, Russian President Putin admitted that sanctions really have a devastating impact on the Russian economy. This is a true revelation, as previously all his statements were reduced to the claim that the restrictions do not harm the Russian Federation and even make it stronger. If the deceitful Russian dictator was forced to admit the obvious fact, then obviously the situation is bad. And this is confirmed by Bloomberg data, which predict a collapse of the Russian economy in the near future.

That is, sanctions work. But equally important as the sanctions themselves are mechanisms for blocking their circumvention. After all, this is the main problem: the Russian economy is still alive and continues to finance the war against Ukraine precisely because it finds ways to circumvent restrictions.

Periodically, these channels are closed – for example, recently, good news came from the USA: America is going to adopt a new package of sanctions against "shadow tankers" transporting Russian oil. Some measures are also being taken by Ukraine: recently, President Vladimir Zelenskiy announced that the Ukrainian side handed over to European partners lists of companies that sell their products to Russia despite the sanctions. And he expects a response from European partners – most likely, the EU will adopt another package of sanctions that will further choke the Russian economy.

But it should be understood that Russia is a gigantic country with a powerful industry, capable of generating income for waging war in various sectors by circumventing sanctions. And here it is very important that the government listens to signals from Ukrainian activists and journalists who are doing tremendous work to identify loopholes that Russia uses to bypass restrictions.

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This topic was the focus of a thorough two-part investigation by StateWatch founder Oleksandr Lemenov. You can read it here and here. To be honest, this article impressed me. Because it says that the largest producer of metallic chromium, without which no defence enterprise is possible, bypasses sectoral sanctions imposed on Russian ferroalloys and calmly sells them worldwide, bringing income to the Russian budget of hundreds of millions of dollars. At the same time, according to the investigation, it does this with the help of a businessman of Ukrainian origin.

But I was even more surprised that, despite the facts presented in the investigation, pointing to specific companies and individuals, there has been no reaction from Ukrainian state and law enforcement bodies. Zero response! No criminal proceedings, no comments that anyone intends to initiate them.

So, what does Lemenov write? There is a Russian oligarch Sergey Gilvarg, the owner of the MidUral group, the world’s largest producer of metallic chromium. And he has a partner – a Swiss businessman of Ukrainian origin Oleg Tsyura. According to the investigation, Tsyura organized a scheme to circumvent EU sanctions through Swiss shell companies, which fictitiously sell Russian products to Indian enterprises, after which the goods are redirected to EU countries and the US via Estonia. The investigation shows that the company Phoenix Resources AG and other structures of Tsyura and Gilvarg continued product supply even after the tightening of sanctions in 2022, formally using third countries. Other companies and figures, such as the German businessman Johann Eckert and the Estonian MBR Metals OU, also took part in the scheme.

In these documents, another country of origin of the products is indicated, allowing them to avoid bans on Russian ferroalloys, critically important for the Russian military-industrial complex. Thus, metallic chromium produced at MidUral plants is used for military equipment and weapons. That is why its export brings significant profits to the Russian defence sector. According to Lemenov’s investigation, the management of the company’s key plant openly supports the so-called special military operation against Ukraine, further emphasizing the role of this product in financing the war. Thus, Tsyura and Gilvarg’s scheme contributes not only to circumventing sanctions but also to strengthening Russia’s military capabilities, posing a threat to Ukraine’s national security and the entire EU.

Aleksandr Lemenov’s investigation prompted me to take up this topic. I analyzed the export operation registers of the companies mentioned in the investigation, and here’s what I found: there is a complex and convoluted scheme to circumvent EU sanctions, centered around the supply of Russian ferrochrome to international markets. A key role in this scheme is played by the Swiss company Phoenix Resources AG, which according to ImportGenius systematically buys products from the Russian metallurgical holding MidUral and resells them to the Indian company Vardhman Ferro Alloys. Notably, in 2023, some consignments indicated the countries of origin as Russia and the Netherlands, where ferrochrome is not produced at all.

One of the most striking details: on July 26, 2024, two ferrochrome shipments with a total weight of 24 tons arrived by sea transport from Rotterdam to the Nhava Sheva port in Mumbai. In the accompanying documents, the country of origin was listed as Russia.

Similar data from these shipments, except for Bill of Lading numbers, is noted in the Chinese import-export database 52wmb.

The Indian company Vardhman Ferro Alloys is a seller of non-ferrous metals and metals, including ferrochrome. According to the company’s website, Vardhman Ferro Alloys supplies metals to more than 90 countries worldwide. However, ImportGenius data indicates that the trade geography of Vardhman Ferro Alloys is actually more modest, and over the past 10 years, the company has directly sold products to 22 countries.

But already after 20 days, the same Indian company Vardhman Ferro Alloys sells a similar batch to the Estonian company MBR Metals OU. And here begins the most interesting part: in the documents, the origin of the goods is listed as India, although it is obviously that same Russian ferrochrome.

The Indian company Vardhman Ferro Alloys, according to information on its own website, allegedly sells metals in more than 90 countries worldwide. But ImportGenius data shows that in reality, over the past 10 years, the company had direct contracts with only 22 countries. This indicates that a significant part of their activities may be occurring through indirect routes and intermediaries. The scheme looks like this: the Russian plant MidUral sells ferrochrome to Phoenix Resources AG in Switzerland, then Vardhman Ferro Alloys buys it in India, and from there the goods are transferred to the Estonian MBR Metals OU. The latter already supplies this metal to European consumers, formally as an "Indian" product.

This scheme allows changing the country of origin of the goods to circumvent EU sanctions against Russian products. MBR Metals OU, which engages in ferrochrome trading, does not disclose information about product suppliers on its website. This complicates attempts to determine the metal’s final buyers. Moreover, data suggest that the route from Rotterdam to Mumbai might be just a formality, as there is a likelihood that the cargo immediately goes to one of the European ports.

It is worth emphasizing that Phoenix Resources AG and similar companies based in Switzerland are not restricted in purchasing Russian goods, as EU sanctions do not apply to Switzerland. This creates opportunities for Russian metallurgical holdings, through trading houses (intermediary companies engaged in international trade), to receive foreign exchange revenue in the West. The Indian company is used for fictitiously changing the country of origin of the goods, making it safe for sale in EU markets.

Particular attention is drawn to the activity of the Estonian company MBR Metals OU, which previously purchased significant volumes of Russian ferrochrome, including for the Ukrainian market. However, after 2022, the company reoriented toward "Indian" products. This only reinforces suspicions that such logistics were created solely to bypass sanction constraints. Unfortunately, due to limited information, it is impossible to identify the final European buyers of this metal.

The described chain allows Russian manufacturers not only to bypass sanctions but also to ensure foreign exchange earnings to support Russia’s military-industrial complex. While there is no direct evidence of transportation of products through all the declared points, such a scheme seems extremely probable given all the collected facts and discrepancies in the customs documentation data.

Thus, Russian ferrochrome, disguised as Indian, continues to enter Europe, strengthening Russia’s economic positions and creating additional resources for its military aggression.

Despite the fact that the data on which Lemenov relies and based on which I conducted my own analysis are publicly available and specific companies and individuals stand behind these schemes, there has been no reaction from Ukrainian law enforcement to these facts.

I emphasize that we are only talking about one established evidential supply chain. How many are there, in fact, involving other Indian firms, is unknown, and law enforcement’s capabilities to definitively establish this are many times greater than those of journalists.

That is why I am submitting crime reports to the Security Service of Ukraine and the Prosecutor General’s Office and request that this publication be considered an attachment to these reports.

I am confident that the evidential documentary base, collected by Lemenov and supplemented by me, is entirely sufficient to initiate criminal proceedings regarding the crimes committed by Sergey Gilvarg and Oleg Tsyura, as provided by Article 110-2 (financing actions committed with the aim of violently changing or overthrowing the constitutional order or seizing state power, changing the boundaries or state border of Ukraine).