Becoming one of the heads of Russia’s massive grain-looting operation in occupied south-east Ukraine may seem an unusual career move for Nikita Busel, the founder of two boutique hotels and a hipster coffee shop chain in central Russia.

But by the summer, the businessman was in Ukraine’s Zaporizhzhia region, which had been partially seized by Russian troops in March.

As local officials installed by Moscow set up a “military-civilian administration” to govern the newly occupied territories, Busel took on the role of general director of a new government-run firm: the State Grain Operator.

Zaporizhzhia is one of the main grain-producing and processing regions of Ukraine, in turn one of the world’s biggest grain exporters. Moreover, Russia’s invasion of the country was causing global food shortages and sending prices for grains soaring.

Map showing the Black Sea, Ukraine, Russia and Turkey

An investigation by the Financial Times into the illicit grain trade out of occupied Ukraine reveals a complex shadow operation managed by private companies and arms of the Russian state itself.

A trove of documents seen by the FT — including invoices, cargo manifests, receipts, and certificates of origin — provides a complete paper trail for one shipment of grain, from occupied Zaporizhzhia to the global market.

The paperwork, which traces the journey of a 2,675 metric tonne shipment of milling wheat, has been corroborated by satellite imagery, shipping transponder data, boat-spotting in northern Turkey and interviews with smugglers and traders.

This small shipment from a quiet port gives insight into how the illicit trade operates, and how different Russian institutions work together to provide cover stories for private companies and ships involved.

This spring, the officials installed by Moscow to run the occupied territories set up the State Grain Operator to handle what they told Russian state media was more than 1.5 million tonnes of stored grain. The next harvest, they forecast, would bring a lucrative further haul of 1mn tonnes.

But the entity, mentions of which were confined to local and Russian state media, remained opaque. It does not have an entry in any Ukrainian or Russian business registry.

A founding document says it was set up on May 15 as an agency of the region’s “military-civilian administration” to purchase grain from local farmers and resell it for export.

Any profits would go back into this state company, the document said, and support the local occupation government. It is, however, not known where profits will now go; Zaporizhzhia was claimed as part of Russia on September 30.

The State Grain Operator began advertising on local social media channels and invited farmers to “co-operate” by selling grain via drop-off points at a set price.

In a promotional video sent to local farmers, Busel stands in front of a Russian train filling up with local grain. A voiceover proudly proclaims that farmers were now being supported and buyers had been found in Russia, Syria, Turkey and Iran.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Ukrainian agribusiness owners and managers who have fled the occupied region told the FT that this State Grain Operator is reselling grain stolen from their warehouses or harvested from fields they previously owned.

“They concocted a government, and then they concocted this company as well . . . claiming it would handle grain purchases,” says the manager of one expropriated business, which was headquartered in Berdyansk, a port in occupied Zaporizhzhia.

“They seized our storage facilities . . . And now they’re doing their so-called business activities there,” says the manager, who asked to remain anonymous.

The business address is now named by the State Grain Operator as one of its own, listed among a dozen of its grain collection points. “The farmers have no choice,” the manager adds. “Either hand over the grain, or it’ll be taken from them.”

The State Grain Operator seems to be still in operation: each week, it publishes lists of prices per tonne at which it is purchasing agricultural products from local farmers.

In August, the local government said the region was exporting about 5,000 tonnes of grain a day by rail and about 1,500-2,000 tonnes by road: much is likely to be shipped out via ports in neighbouring Crimea.

In the promotional video, Busel, in red trousers and matching shoes, appears to confirm the State Grain Operator has been appropriating Ukrainian assets.

“We find an abandoned asset, we go in and take this enterprise under our security control, do a full inventory,” he said. But he bills it as a positive for local workers: “We create the conditions for the employees to continue to work.”

The FT has sought to contact the State Grain Operator but could not reach it on advertised telephone numbers. Busel did not respond to direct messages sent via social media and emails sent to several of his other companies went unanswered.

When contacted, managers at both of Busel’s hotels said they had not seen him for a long time. Some never have. Other staff told the FT that they did not know how to contact the owner.

To sell the goods, the State Grain Operator needs to get them abroad.

On August 13, occupation officials signed off paperwork, seen by the FT, to clear the export of 2,675 metric tonnes of milling wheat through Berdyansk.

To persuade prospective buyers that the grain was safe, sanitary and properly handled, the authorities in the town produced a lot of paperwork about its origins — a packet of which has been seen by the FT.

On another document, signed the same day, the ship’s captain, Viktor Smolskiy, typed a short, English-language note: “I’m, Master of m/v PAWELL, flag – SYRIA, declare that I have stopped loading . . . Vessel is loaded up to full cargo capacity.”

Few ships would load at an occupied port as it risks sanctions and the attention of Ukrainian authorities, which are active in pursuing vessels which they believe contain looted grain.

Syrian-flagged vessels such as the Pawell, however, are frequent visitors to occupied Ukrainian ports, often taking consignments directly to Syria.

The Pawell itself is rather unusual too: it is also owned by a UK-registered partnership. Pawell Shipping Co LLP is registered to a notional address in Bloomsbury, central London.

It does not appear to have any presence at the location. Businesses at the same address said they knew nothing about their ostensible neighbour.

Even before it arrived in occupied Ukraine, the Pawell had muddied its tracks.

Readings from the ship’s AIS transponder, a device that broadcasts its position to other vessels, shows that on July 31, it arrived in the Kerch Strait, a body of water within a day’s sailing of the port, where it waited.

Then, suddenly, in the early evening on August 10, it switched off its signalling system and disappeared off the radar.

The Pawell reappeared on August 15 — two days after the paperwork seen by the FT says the ship was filled with grain in Berdyansk. It was back in the Kerch Strait.

 Map showing the Pawell ship goes dark. For five days, the ship tries to hide its movements. Grain shipment

Except now, its depth in the water — the so-called draft — was reported as significantly deeper: it was loaded with cargo. Over the next two weeks, the laden ship loitered near the strait.

A casual observer might assume it had been filled in the Kerch Strait. A second set of documents, also seen by the FT, was prepared to support this idea. The documents — certificates of origin, cargo manifests — all signed in the final days of August, rewrite the backstory for the source of the grain.

In these new documents, the port of departure is no longer the occupied Ukrainian port of Berdyansk but Port Kavkaz, a Russian hub now notorious for laundering illicit grain transfers from Ukraine.

The existence of the two parallel sets of documents adds weight to suspicions about the role of Port Kavkaz in providing a cover for the huge flows of grain making their way from occupied Ukraine via Russian-held ports.

For the Pawell’s shipment, the Russian company Geos had a key role in facilitating the venture. Its owner, Russian businessman Igor Pozhidaev, has worked on grain trading in the region and out of occupied Crimea for many years, Russian business records show.

He acknowledges that his business was transporting grain on the Pawell, but flatly denies the grain had come from occupied Ukraine, describing any documents that purported to show otherwise as “fake”.

“This grain has no relation neither to Zaporizhzhia, nor to Ukraine. It relates to Port Kavkaz, for which there are all the relevant documents, from the chamber of commerce of the Russian Federation to the contracts with the farmers that grew it, from whom I bought it, along with all the invoices and receipts and so on,” Pozhidaev says.

He declined to share any of these documents. The grain, he says, had got to Port Kavkaz by train.

At his suggestion, the FT spoke to officials at the chamber of commerce in Togliatti. They too insisted that this paperwork was all in order. The certificate above can be accessed on an official database.

To the outsider — or a busy customs official — this paperwork has no link to Ukraine and the State Grain Operator. This makes it easier to sell; Turkish customs would be more likely to wave the cargo through, and buyers would have less fear of legal reprisals for buying looted goods.

In early August, at about the same time as the Pawell was loitering around the Kerch Strait, Akbar Asgarov received a telephone call from an associate of an old friend.

The Azeri businessman, who owns an Istanbul-based construction company called Northwest Group Yapı, had no experience of the grain business, by his own account.

But the caller, who was from Geos, suggested that Asgarov could take the Pawell’s cargo and find buyers for it in Turkey — a major regional hub for processing wheat.

“They rang me and said, ‘We have these goods from Russia, from Novorossiysk [a large Russian Black Sea port],’” Asgarov tells the FT. “They said this and that, I don’t really know what. I don’t know this business.” Still, he told them he was interested in trying to sell it.

The Pawell arrived on September 3 at the port of Samsun, on Turkey’s Black Sea coast, bearing its Port Kavkaz paperwork.

Asgarov thought he had found a buyer willing to pay $380 a tonne for the wheat. But, after a drop in wheat prices in Turkey, the customer pulled out and the 60-year-old businessman got cold feet about acting as an intermediary. “I said, ‘Let’s cancel it my brother, I cannot help on this issue,’” Asgarov recalls.

Asgarov says he had no idea that the grain may have originated from occupied Ukrainian territory. “We stay far away from improper dealings,” he says.

The Pawell did not stay long in Samsun. After Northwest Group Yapı’s failed sale, it moved a little along the coast, to a small seaside Turkish town called Sinop. On September 10, Yörük Işık, who runs the maritime consultancy Bosphorus Observer, took a picture of the boat at anchor a few miles from the coast of Sinop.

Then, the ship switched off its signalling systems and disappeared once again. When it reappeared some weeks later in the eastern Black Sea, it was sitting higher in the water. It had finally disposed of its grain.

Turkish buyers may have been loath to buy the cargo not just because of the price, but also out of concern at getting into trouble with Ukrainian authorities.

Pozhidaev of Geos says: “Thanks to the rumours, including yours . . . I had some problems with selling it in Turkey.” Traders have reported increasing scrutiny in Turkish ports.

Pozhidaev says the paperwork showing the Pawell’s call at Berdyansk is forged, and named a Ukrainian who he claimed had concocted the documents. “It was never there, I’m telling you,” he says. “It’s all trash. It’s a fake. I don’t know why they picked my vessel, but I guess somehow they did.”

Yet Russia’s own bureaucracy appears to make the wheat’s origins clear. Publicly accessible Russian port databases contain details of the Pawell’s movements that contradict the account in the second set of documents.

For example, the Pawell’s revised paperwork includes a note from the captain, Smolskiy, saying the boat was loaded with grain in the Russian port of Port Kavkaz on August 11.

But the Russian port database shows that the Pawell had left the Kavkaz port in the evening of August 10, and was carrying no cargo at the time.

It sailed north to “Azov”, the port database recorded, a reference which could mean it went to Russia or to the Azov coast of occupied Ukraine.

Russian port database records show that the Pawell left Kavkaz for ‘Azov’

Satellite imagery also undermines the timeline: the Pawell is visible in photographs taken by US imaging company Planet Labs in the Port Kavkaz anchorage on the morning of August 9, the day before it turned off its AIS transponder.

Pozhidaev initially said the ship was not moving during these days. The FT was unable to find a ship matching its description in Port Kavkaz, or its anchorages, in the days that followed.

Asked about this, Pozhidaev says that the ship had in fact sailed to Temryuk, a neighbouring Russian port, to fill. No ship matching the Pawell was visible on a satellite photograph of the port or in its anchorage on the morning of August 13.

Photos from Planet Labs do, however, show a boat of Pawell’s size and colour arriving and being filled in the occupied Berdyansk port exactly as the original documents suggest.

The low-resolution images are too grainy to allow positive identification, but appear to show the hold of a boat loading up with a grain-coloured substance on August 12 and August 13. This is consistent with the original paperwork, which the Russian businessman says was faked.

Photos of the Pawell ship loading up with grain

Any ship calling at the quiet port of Berdyansk is unusual. In the month before this shipment, the satellite photography captured just one other cargo ship entering Berdyansk. It left in mid-July.

The final destination of the Pawell’s consignment appears to have been the little-watched east Turkish port of Hopa, near the Georgian border, on September 26.

The FT identified a ship matching the Pawell’s dimensions and distinct colour scheme in port on that day. A few days after that, port authorities posted an image of the Pawell moored at Hopa’s grain elevator.

Pozhidaev declines to confirm where the grain was sold, beyond saying it was in Turkey. He says: “In the end, I sold the cargo. It’s sold and the Turks are perfectly content with the Russian documents that I gave them. The stuff you’re digging for — that it was in Berdyansk? — that’s all nonsense.”

Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *