Russian oligarch-owned business continues to earn millions in Estonia

Viatcheslav Kantor together with Vladimir Putin.
Viatcheslav Kantor together with Vladimir Putin. Source:

Logistics company DBT, which is owned by Viatcheslav Kantor, a businessman in Russian President Vladimir Putin's favor and Russia's 16th richest person, continues to operate unimpeded at the Port of Tallinn-owned Muuga Harbor, as the West has yet to impose any sanctions on him. European dependence on Russian fertilizer may continue to keep Kantor safe from being sanctioned as well.

According to Port of Tallinn Chief Commercial Officer (CCO) Margus Vihman, business at Muuga Harbor, located 11 kilometers northeast of Tallinn, is currently running smoothly for DBT — named Estonia's most successful company in 2020 by business daily Äripäev.

"DBT's volumes are currently more or less ordinary," Vihman said. "Maybe slightly smaller than last year, but relatively ordinary."

Its fertilizer terminal, which processes several million tons of fertilizer a year, is an important partner for the Port of Tallinn, the CCO said, noting that the DBT terminal is one of the five biggest terminals at Muuga Harbor.

According to its annual report, DBT, which operates at the ports in Muuga and Sillamäe, earned a net profit of €5.5 million on €39 million in revenue in 2020. A year earlier, the company's net profits were four times higher than that at approximately €23 million. Revenue in 2019, meanwhile, totaled some €65 million.

DBT public relations manager Ago Tiiman said that while he understands the interest in their company, he does want to offer further details regarding how the company is doing.

DBT is a subsidiary of global mineral fertilizer producer Acron. Dmitry Khabrat, a member of the board at DBT, likewise serves on the board of Acron. Acron in turn, however, belongs to Viatcheslav Kantor, the 16th richest person in Russia, valued by Bloomberg at the beginning of Russia's war in Ukraine to be worth approximately €8.4 billion.

In 2017, Putin bestowed Kantor with the Order of Honor, "in recognition of his professional achievements and long-standing fair work." Half a year earlier, Putin and Kantor were among those to ceremoniously launch production of rare earth metals together at Russia's biggest ammonia unit in Veliky Novgorod. Acron's press release at the time noted that the launch of the unit was "strategically important to ensuring national security" and gradually ending the importing of rare earth metals into Russia.

Oligarchs not inherently primary sanction targets

Kantor's name was included on the U.S. Treasury Department's 2018 "Putin list" of more than 200 prominent officials and oligarchs that had seen success during the Putin regime specifically.

Thus far, however, 68-year-old Kantor has not been included on sanction lists in the EU, the U.S. or the U.K. He is not the exception either — according to Bloomberg, the EU has sanctioned just nine of Russia's top 20 richest people.

Speaking to ERR, Prime Minister Kaja Kallas (Reform) said that she has not read the sanctions list in sufficient detail to comment on why Kantor or several other major Russian oligarchs aren't included. She did, however, note that the point of the sanctions is to punish first and foremost those who support the Putin regime or either justify or directly financially benefit from it.

Kallas nonetheless also said that the EU must introduce tougher sanctions on Russia. "We have always been of the opinion that sanctions should be strong and tough," she said. "Because if they are imposed quickly, then they have an impact as well."

Rena Tasuja, director of the Ministry of Foreign Affairs' Bureau of Sanctions and Strategic Goods, likewise declined to comment regarding possible sanctions against Kantor.

"It wouldn't be reasonable to speculate publicly about potential subjects of sanctions," Tasuja said. "First and foremost in order to avoid potential outflows of sanctioned individuals' assets and providing them with signals in that regard."

According to Tasuja, the EU's sanctions list currently includes those who have most endangered Ukraine and who have been closest to the Kremlin's decision-making. Since the outbreak of the war in Ukraine, she noted, EU sanctions have been imposed on nearly 600 people, including Russian oligarchs, members of the State Duma and the Security Council of Russia, and high-ranking military officials.

"Russian oligarchs' wealth does draw a lot of attention, but it needs to be understood that wealth may not inherently constitute grounds for being added to the sanctions list," the ministry official explained.

High fertilizer prices possible obstacle to sanctions

Founded in 1997, DBT advertises itself as one of Europe's "most technically equipped, advanced and successful logistics and transit companies." The company's homepage notes that its Muuga and Sillamäe terminals in Estonia offer customers transshipment and storage of bulk and liquid goods as well as freight forwarding services.

The Port of Sillamäe is home to DBT's liquid chemical goods terminal. According to the company, granular mineral fertilizers account for the majority of trade flows at the company's bulk goods terminal at Muuga Harbor. Fertilizers at Muuga are stored in a hangar warehouse and eight dome warehouses with a total volume of 192,000.

In addition to Acron owner Kantor, likewise not included on any sanctions lists thus far is Andrey Guryev, the 20th richest person in Russia and a major stakeholder in PhosAgro, one of the world's largest producers of phosphate-based fertilizers.

According to Ants-Hannes Viira, senior researcher at the Estonian University of Life Sciences' Institute of Economics and Social Sciences, fertilizer imported from Russia accounted for one third of the entire EU's fertilizer imports in 2020. In Estonia, however, Russian and Belarusian fertilizers account for even more than two thirds of fertilizers.

Viira said that Acron and PhosAgro produce approximately 8 percent of the mineral nitrogen fertilizer traded on the global market, and 16 percent of phosphate-based fertilizers. Should the EU restrict imports on Russian fertilizers, the primary question will be how quickly it will be possible to replace them with other producers' products.

"In the long term, this replacement effect will probably work," he said. "Not right on the first day, however, which means that fertilizers would get more expensive. We have actually been seeing this since last fall already."


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Editor: Aili Vahtla

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