Newly released court documents have exposed how the Channel Island tax haven of Jersey cautiously welcomed Roman Abramovich and his billions with the tacit approval of the British government, only to dramatically reverse course following Russia's full-scale invasion of Ukraine.
The Safe Harbour for Russian Wealth
For decades, Jersey has served as a crucial conduit for moving fortunes from some of the world's most controversial regimes into Western financial systems. The crown dependency attracted overseas oligarchs with its potent combination of low taxation and exceptional financial secrecy.
This secrecy extended to Jersey's relationship with Westminster. As a crown dependency, Jersey maintains its own parliament while ultimately belonging to the King, creating a relationship that has traditionally operated as something of a black box with minimal public transparency.
That changed last week when Jersey authorities released details of a two-year legal battle with the Russian billionaire and former Chelsea FC owner. With a gagging order lifted, the Jersey royal courts began publishing previously undisclosed judgments that reveal the extraordinary story of how Abramovich found sanctuary for his wealth.
London's Tacit Approval
The court papers show that in 2016 and 2017, Abramovich and four close associates were granted residency under a special scheme for ultra-high net worth individuals. His application received approval in September 2017, though records indicate he first approached Jersey about residency earlier that summer.
More significantly, the Jersey government permitted the oligarch to relocate companies controlling the bulk of his fortune to the five-by-nine-mile island. Asset transfers from his offshore network to Jersey occurred in 2017 and again in 2021, just months before Russia's invasion of Ukraine, with holdings worth $7bn (£5.3bn) being relocated according to the judgments.
Perhaps most revealingly, the documents show extensive consultation between Jersey and London officials regarding what was considered a politically sensitive matter involving a high-profile individual with known ties to Vladimir Putin's regime.
The judgments record at least seven background checks and four face-to-face meetings between officials in Jersey and London over several years. Despite heightened sensitivity around Kremlin-linked figures following Russia's 2014 annexation of Crimea, UK officials raised no objections in any of these communications.
Even after the diplomatic firestorm triggered by the 2018 Salisbury poisonings, the door remained open to Abramovich. Background checks were repeated in February 2019 as Jersey officials grew concerned about "hardening of attitudes towards those with Russian connections."
The Dramatic Reversal
The tide turned decisively against Abramovich following Russia's assault on Kyiv. In April 2022, Jersey authorities froze $7bn of assets suspected of having connections to him and conducted searches at multiple premises across the island.
By this time, the oligarch had been placed on both UK and Jersey sanctions lists. A January 2023 court ruling revealed the raids formed part of a criminal investigation by the Jersey attorney general into suspected money laundering and sanctions breaches.
Subsequently, it emerged that the money laundering investigation focuses on whether Abramovich obtained his wealth through corruption while building his oil and gas business Sibneft during Russia's privatised economy of the 1990s. The claims reportedly rely on evidence Abramovich himself provided during a 2012 London court case.
In a legal fightback beginning in 2023, Abramovich and associated parties sought to overturn the asset freeze, but Jersey's court of appeal ruled against them this summer. In a more unusual move that was also rejected, Abramovich sued for judicial review of the attorney general's decision to investigate him, attempting to shut down the investigation before any charges were brought.
Internal Concerns and "Reputational Risk"
The decision to welcome Abramovich's wealth wasn't taken without internal concerns. Barry Faudemer, then head of enforcement at the Jersey Financial Services Commission, prepared a report for ministers in late 2016 that highlighted significant risks.
"Abramovich's close association with Putin raises a reputational risk to the island," Faudemer warned, "particularly given the increasing perception of Russia as a rogue state intent on the use of military action to achieve its goals."
He expressed specific fears that Abramovich could use a Jersey-registered company "to launder the proceeds of corruption on behalf of third parties including Putin. The island will have no oversight of the activities of the company."
However, Faudemer also noted that Abramovich already had "extensive business interests in the island," owned homes in the UK and US, and had "successfully operated in the UK for many years as the owner of Chelsea football club without incident." He concluded that "identifying evidence sufficient to support a refusal to grant a licence is likely to be problematic."
Jersey's ministers appeared keen to make the arrangement work, but proceeded cautiously. They understood the potential benefits, with one judgment summarising that "these approvals were given in the knowledge that, if they were granted, [Abramovich's] substantial wealth would be migrated to Jersey with all the financial benefits which that would bring to the island."
Legal Battles and Ongoing Investigation
Abramovich is now pursuing a claim of "conspiracy" against the Jersey government. His lawyers emphasise that no charges have been brought against him since the investigation began over three years ago, and that to their knowledge, "no progress has been made" on the attorney general's investigation.
They stress that the published judgments didn't require judges to rule on whether corruption occurred regarding his Sibneft dealings, and that no conclusions were reached on this matter. They also note that UK courts in 2012 made no finding that Abramovich broke any law in his business dealings.
Meanwhile, a spokesperson for Jersey's attorney general welcomed the privy council's recent decision to reject Abramovich's appeal, confirming that "the investigation by the Economic Crime and Confiscation Unit in the Law Officers' Department in relation to Mr Abramovich and others remains live."
The case reveals the complex relationship between London and its crown dependencies, and how geopolitical shifts can dramatically alter the welcome extended to controversial fortunes. What began as a carefully approved relocation of wealth has evolved into one of the most significant financial sanctions cases following Russia's invasion of Ukraine.
