Swiss Bank To Close FIDE Account Over Ilyumzhinov
The Swiss department of UBS bank has informed the World Chess Federation that it will close its bank account, in April at the latest, due to FIDE President Kirsan Ilyumzhinov's presence on the sanctions list of the U.S. Department of the Treasury.
"We face this problem, no doubt," FIDE Treasurer Adrian Siegel told Chess.com.
On February 12, an alarming letter by Siegel was posted on FIDE.com, where he speaks of a "serious problem." Siegel notes that Ilyumzhinov's name is still on the sanctions list of the U.S. Department of the Treasury and that, after two years,
"...the Swiss bank UBS has announced that they will immediately close our accounts. The white money strategy in Switzerland does not allow to do business with institutions or persons on the sanctions list..."
Siegel finishes the letter as follows:
"In summary, Kirsan Ilyumzhinov's problems severely damage FIDE's business activities and we have to look for a new bank connection. In the process of this change we anticipate some problems. However, we will do our best that payments will not be delayed."
In the past few days, quite a number of media have reported on the letter (including Reuters, the Washington Times, the BBC and the Telegraph) by stating that the FIDE account is "frozen," "closed," or "shut down" with "immediate effect." This is actually not the case—not yet.
Speaking to Chess.com via phone, Siegel says this was based on a misunderstanding: "At the moment we are completely functional. However, we know that UBS most likely will close the account at the latest by April."
Nonetheless, the situation is dire according to the FIDE treasurer: "We have to find a new bank, and this will be very difficult, especially in Switzerland. Most banks are in the process of a white money strategy, which means they are avoiding anything that could be close to a risk."
Adrian Siegel (right) watching Ilyumzhinov being congratulated after winning the 2014 presidential elections in Tromsø, Norway. | Photo: Maria Emelianova/Chess.com.
White money strategy is a common term in Switzerland for fighting money laundering and tax fraud in the country. This has become a priority in recent years, and it seems banks are not clearly distinguishing between private persons and organizations.
"I have seen statements that FIDE itself was on the sanctions list, but this is not the case; this is about Ilyumzhinov as a private person," says Siegel. "But for UBS, that doesn't matter."
As was reconfirmed in an extraordinary presidential board meeting in April last year, Ilyumzhinov is currently not responsible for any legal, financial and business operations of FIDE.
"He is not allowed to do anything financially; he is not in charge anymore," said Siegel. "But apparently it's still too much for UBS."
Siegel told Chess.com that he will publish a second letter on FIDE.com soon, in which he clarifies more questions that came to him after his first letter—which was addressed to members of FIDE's executive board and presidential board, and to all member federations and commissions.
Federations have to pay for their FIDE membership, so this problem affects them directly in case FIDE cannot find a new bank in time. But it might also affect other payments.
Siegel: "I am not worried about, for example, the participants of the Candidates' Tournament. It's still possible that the players will get their money because the sponsors or Agon can pay them directly. But for salaries of office members, or paying the rent, we will have an issue."
Kirsan Ilyumzhinov. | Photo: Chess.com.
Ilyumzhinov was added to the sanctions list in November 2015. His name was specifically mentioned as part of a group "providing support to the government of Syria, including for facilitating Syrian government oil purchases from ISIL."
The FIDE president himself has always denied having ties with the Syrian government and has stated several times that he is confident that he will be removed from the list.
"Mr. Ilyumzhinov believes that the allegations form part of an ongoing smear campaign related to a power struggle at FIDE in advance of elections taking place this year," his London solicitor Nigel Kushner told Reuters.
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