Syria: Hunting for President Assad's assets
As the flames of rebellion lick ever closer to Syria's embattled President Bashar al-Assad, the noose of economic sanctions grows steadily tighter on him and his regime.
After 16 rounds of sanctions, starting in May 2011, the European Union has now proscribed a total of 129 individuals and 49 companies, seeking to freeze their assets wherever it can find them.
In the UK, some £100m ($157m) of Syrian regime assets, mostly cash held in bank accounts, has been frozen over the last 14 months.
On Wednesday, the US Treasury Department announced new measures against 29 members of the Assad regime, including four ministers and the governor of the central bank, as it sought to harmonise its sanctions list with that of the EU.
End Quote Iain Willis Alaco
They can use some of the most complex structures to conceal and move their assets”
"The Assad family has been controlling Syria for more than 30 years," Syria's most senior defector to date, the former ambassador Nawaf Fares, told the BBC in Qatar this week.
"They are in control of security, the economy, and all the other resources, and they have misappropriated lots of the resources of the Syrian people.
"I am convinced that the Assad family owns countless assets. Syria is a very rich country - it has gas, petrol and other resources, and the family has been looting the country for decades."Syrian kleptrocracy
The Assad family may have been in power since 1970, but the man of most interest to asset trackers is Rami Makhlouf, cousin of the president with close links to the military and security networks and perhaps the richest man in Syria.
His sprawling business empire is said to control up to 60% of the Syrian economy.
"You have got to think of Syria as a kleptocracy," says a British financial investigator who asked not to be named, "where the state hands out licences to its friends and close relatives."Global assets
The millions that have been frozen in the UK make up just a fraction of the regime's estimated global wealth, according to Iain Willis, head of research at the London-based business intelligence firm Alaco.
"In terms of realisable assets, it's likely to be in the region of $1-$1.5bn (£600m-£900m)," he says, "held across the wider family, not just Assad himself, but by the extended family, by second cousins, uncles, business partners and their advisors.
"The likely location for those funds to be held is probably via places like Russia, maybe Dubai, Lebanon, Morocco, even Hong Kong, but the assets themselves are likely to be worldwide."'Flee clauses'
Finding a proscribed regime's assets is not easy.
They tend to be hidden behind complex layers using different names and brass-plate addresses in remote offshore tax havens.
"People in this sort of position... have access to some of the best advice," says Mr Willis.
"They can use some of the most complex structures to conceal and move their assets that include things like shell companies held often through trusts, held via lawyers.
"Even using some of the more obscure techniques of offshore asset management, they may have access to companies and corporations that include 'flee clauses' that mean that the company is automatically closed and re-domiciled the moment the first question is asked about the existence of the company."Complex links
Locating a regime's assets is only the beginning.
A link then has to be proved with the proscribed regime's individuals.
Ambrose Carey, one of the directors at the business intelligence firm Alaco, recalls hunting for Saddam Hussein's assets back in the 1990s.
"It was generally known that Saddam Hussein was a major investor in a French publishing group. Indeed his estate was valued at something like $100m.
"But actually proving the link was extremely difficult.
"You had a company called Montana registered in Panama, but domiciled at a lawyer's office in Geneva, before ultimately connecting with a Saddam front man, but never ultimately to Saddam himself."Russian shelter
And there is another hurdle.
When sanctions are not applied universally through United Nations Security Council resolutions, there will always be a legitimate bolthole for a regime's funds.
With Colonel Gaddafi of Libya last year it was easy, say asset trackers.
The Libyan state had some £12bn of assets in the UK, which could be quickly frozen under UN sanctions.
But Syria's regime, although sanctioned by the European Union and the US Treasury, is not subject to the same global measures.
Banks in the Middle East have reportedly come under increasing pressure from Washington to give up their Syrian regime assets.
But according to some investigators, the Assad family secured much of their fortune some time ago in a place beyond the reach of the EU and the US - namely Russia.