“Crimea TITAN”. Billionaire Firtash’s plant in Armyansk continues working after an emissions release and despite the sanctions

In late August 2018, large-scale emissions of sulfur dioxide and hydrogen chloride occurred at the “Crimea TITAN” plant in the annexed Crimea. They poisoned thousands of people in several areas.

In the fall of 2018, Current Time and “Municipal Scanner” published an investigation on how the “Crimea TITAN” plant, its former owner, Ukrainian billionaire Dmitry Firtash, and the current owner, Firtash’s business partner, bypass the European sanctions against Crimea. We continued to monitor the billionaire’s sanctioned business after the investigation was published.

The poisoning of Armyansk

«Our doctor in Simferopol said that my son has a chemical burn of the nasopharynx: red smudges on the palate, even blue ones. And he prescribed inhalation drugs, because he even had a small burn on his auricle and small red spots all over his body. And my niece has become allergic to many products. And many children now have the same symptoms», — told Armyansk resident Elena Nikolenko.

On the night of August 24, 2018, metal objects in Armyansk and Krasnoperekopsk became covered with “rust”, dense smoke enveloped both cities, and the crops of many farmers simply died. Hundreds of people turned to doctors with similar symptoms: sore throat, weakness, dizziness and rash. In local hospitals, patients were told that it was an allergy. On September 13, large-scale emissions occurred again at the plant – according to Elena, they were much worse than in August.

More than four thousand people, three quarters of which were children, had to be evacuated to a sanatorium from Armyansk alone. Schools were closed for three weeks. Residents of Armyansk say that local authorities are still silent about reimbursing their medical expenses.

The emissions of sulfur dioxide and hydrogen chloride from “Crimea TITAN”, the largest titanium dioxide plant in Eastern Europe, were confirmed by the head of the Russian government of the annexed Crimea, Sergei Aksenov.

Firtash in Austria, companies in Cyprus, plant in Crimea

Until the fall of 2016, “Crimean TITAN” plant, through a chain of companies, some of which are located in the European Union, directly belonged to a major Ukrainian businessman, Dmitry Firtash, and now it belongs to his business associates. Firtash himself has not left Austria since 2014 due to a possible extradition to the United States, where he is accused of corruption. Firtash’s connection to the Crimean enterprise until 2016 is confirmed by official documents received by Current Time and “Municipal Scanner” from the Russian and Cypriot business registries.

After the annexation of Crimea in 2014, the European Union imposed sanctions on the peninsula. European companies were banned from doing business with enterprises on the peninsula, including registering new companies and investing in infrastructure development and tourism.

A few months after the annexation, the management structure of “Crimean TITAN” changed. Current Time first published the details of this scheme in September 2018, since then it has remained the same.

In early June 2014, the Moscow company OOO “Titanium Investments” was established. A month later, it opened its representative office in Armyansk. The founder and CEO of “Titanium Investments” was Alexander Valentinovich Emelin. He has worked with Firtash from the early 2000s and headed the Moscow office of the Hungarian gas trader Euronit Kereskedelmi, owned by the Ukrainian billionaire. “Titanium Investments” has been under Ukrainian sanctions since 2016.

Already on July 9, 2014, ownership of this company was completely transferred to the Cypriot Letan Investments Limited. According to the Cyprus Department of Registration and Liquidation of businesses, now the offshore company is 100% owned by the same Alexander Emelin. But until September 2016, two Cypriot companies owned the offshore – GROUP DF HOLDINGS LIMITED (1001 shares) and GROUP DF INTERNATIONAL CONSULTING LIMITED (1 share).

The director of GROUP DF HOLDINGS LIMITED is Dmitry Firtash. According to the Cyprus business registry, he has been its sole owner since 2011. GROUP DF HOLDINGS LIMITED is the parent company of Dmitry Firtash’s many business assets.

Why Firtash transferred the formal ownership of the offshore Letan Investments Limited to Alexander Emelin in September 2016 is not known. In the fall of 2016, Spain began to seek extradition of the Ukrainian oligarch.

The Moscow company OOO “Titanium Investments” has repeatedly participated in Russian government contracts: it connected networks for the state-owned “Krymtelecom”, and by the request of the Federal Agency for Youth Affairs in 2015, it helped to host the “Tavrida Pan-Russian Youth Forum” in Crimea. In total, the company completed eight government contracts worth a total of almost 76.5 million rubles.

Although in 2015 the plant changed its name in the Ukrainian jurisdiction to “Ukrainian Chemical Products”, main activities were carried out through a legal entity registered in Russia – OOO “Titanium Investments”.

Additional sanctions

After the publication of the investigation by Current Time, the National Security and Defense Council of Ukraine promised to impose sanctions against the companies mentioned in the material that are associated with Firtash. Nevertheless, nothing has happened in the six months since this announcement. The NSDC did not respond to the inquiry of Current Time about is inactivity with respect to these companies. However, a few days later, at the end of March 2019, they issued a decree imposing sanctions against the Cypriot Letan Investments and several other companies related to Firtash.

In addition, back in mid-January 2019, the Cypriot authorities arrested part of Firtash’s property and assets, including the parent group GROUP DF HOLDINGS LIMITED, worth a total of $ 46 million. However, the arrest is not related to the sanctions, but to the case of the group’s debt to the Russian VTB bank, which Ukrainian Chemical Products was supposed to repay in 2016. Back then, the companies of the businessman said they could not return the money due to the annexation of Crimea and the sanctions imposed on it.

When asked by Current Time about the punishment that Frtash’s companies may face for violating the sanctions, the Cyprus Ministry of Justice and Ministry of Finance have not provided substantial answers.

“The Republic of Cyprus fully complies with all relevant [EU] regulations on sanctions, including those related to Crimea. If you need specific details [about the sanctions violations], you can contact the companies you have specified directly”, – said Costas Konstantinides, Economic Affairs Officer at the Sanctions Special Committee under the Cyprus Ministry of Finance.

According to the regulations of the European Commission, it is the EU member states themselves that must monitor the activities of companies, record violations of the sanctions regime and take appropriate measures.

Member of the European Parliament Petras Auštrevičius, who regularly introduces bills to tighten the sanctions against Russia, confirmed that the activities of the Cypriot company in Crimea violate the sanctions regime. He also called the current EU policy on monitoring the implementation of sanctions not effective enough.

“There is still no common understanding about the sanctions [against Crimea] and the participation of Cyprus as a country in the processes (around the peninsula – CT). I don’t feel the political readiness to move towards new solutions on this issue”, – said Austriavičius.

“Crimean TITAN” has been openly owned by the Ukrainian holding company “DF Group” since the 2000s. The company’s website still contains information about “Crimean TITAN”.

Inquiries of Current Time and “Municipal Scanner” about whether they consider their activities to be violating the sanctions were ignored by “DF Group”.

Dmitry Firtash’s “DF Group” also appears in a case file of American investigators: they are trying to prove that representatives of the conglomerate bribed officials in India. According to investigators, “DF Group” tried to gain access to titanium deposits, and Boeing companies later tried to resell the metal from there. It is under this case that the United States demands the extradition of Firtash from Austria.

Consequences of the emissions

The “Crimean TITAN” plant located on the peninsula has been operating since the time when the companies of the millionaire Firtash did not exist yet – since 1971. Elena Nikonenko, a resident of Armyansk, says that they have gotten used to regular emissions from the factory in the city over the years, but they have never been so powerful.

Only two weeks after the leak of sulfur dioxide in the summer of 2018, the plant decided to suspend its work. Its CEO announced that the dam protecting the acid accumulator has collapsed. The Russian court fined “Crimean TITAN” 736 million rubles for environmental damage. Whether the plant has paid this fine is unknown. Already in October 2018, it resumed its work, and also began the construction of treatment facilities.

The administration of Armyansk promised that the plant would not reopen until the complete modernization and inventory check of the technological process are finished. Whether this process was actually completed and which companies invested in the reconstruction of the Crimean Titan under the conditions of sanctions is also unknown. Current Time contacted the management of “Crimean TITAN”, but they refused to answer any questions.