Switzerland unfreezes EuroChem accounts after change of beneficiary - paper

MOSCOW. May 23 (Interfax) - Switzerland unblocked the accounts of EuroChem after sanctions-hit Russian tycoon Andrei Melnichenko ceased to be the fertilizer producer's principal beneficiary, Swiss paper Tages Anzeiger reported.

According to the information of the State Secretariat for Economic Affairs (SECO), the body responsible for monitoring sanctions against Russia, the new beneficiary of the trust to which the controlling stake in EuroChem has been transferred is Melnichenko's wife Alexandra. Having received the information about the change of beneficiary, SECO concluded that there is no proof that a person subject to sanctions has control over EuroChem. This conclusion by the regulator is cited in a letter to a Zurich law firm, the paper said.

In line with the SECO charter, EuroChem's accounts and payments were unfrozen, the paper said. In mid-March, when Melnichenko was included in Switzerland's sanctions list, UBS and Credit Suisse temporarily froze the company's accounts. This made it impossible for EuroChem to make payments on Eurobonds, as Citigroup did not accept transfers for fear of violating sanctions.

EuroChem management, meanwhile, assured the regulator in writing that sanctions would be completely observed and that persons subject to sanctions would not be furnished with any funds or economic resources.

EuroChem founder Andrei Melnichenko was included in the European Union's sanctions list on March 9. The same day the company announced that Melnichenko was no longer its beneficiary and that he had stepped down from the company's board of directors. The company did not say to whom control of the group had been transferred.

Melnichenko previously controlled 90% of group parent company EuroChem Group AG, which is headquartered in the Swiss town of Zug, through Cyprus-based AIM Capital SE. Melnichenko was put on the Swiss sanctions list on March 16.