The central bank allowed Russia’s state-owned company GTLK to take a break from sanctions to pay millions of euros in wages, rent and legal fees

The bank accounts of GTLK Europe, the Dublin-based European headquarters of the Russian aircraft and ship leasing firm, were frozen on April 8. The parent company was sanctioned as a company whose actions “undermine or threaten territorial integrity and sovereignty”. and Independence of Ukraine”.

EU rules allow member countries to grant exemptions from bank freeze orders to allow certain contracts to be completed before a company has been sanctioned. The Central Bank of Ireland gave GTLK Europe permission to use its accounts to pay its 29 employees in Dublin. The total amount paid is redacted, but GTLK’s 2020 financial statements show that the cost of salaries and other benefits for Irish resident employees amounted to US$5.8 million (€5.8 million), with 1.29 Millions of dollars paid to directors.

GTLK had sales of $334 million and pre-tax income of $19.2 million that year.

In separate exceptions, GTLK was allowed to pay rent and ancillary costs to its landlord. Public records show that GTLK leases the second floor of 2 Hume Street, near the south side of St Stephen’s Green, from IPUT, Dublin’s largest office letting company. The Russian company was also granted exemptions from paying its lawyers and IT vendors.

Not all of GTLK’s professional service companies have stayed with the Russian firm. Company records show that Grant Thornton, GTLK’s auditors who received €400,000 in 2020, resigned from his position as auditor on March 7.

The largest transactions authorized by the Central Bank of Ireland relate to the payment of interest by GTLK Europe on its outstanding Eurobonds which it has issued to raise capital.

The two Irish companies have five outstanding Eurobond issues worth US$2.65bn due to be redeemed between 2024 and 2028. In June, the central bank gave GTLK permission to pay interest charges on a $500 million bond that had been overdue since April.

In a statement released on July 4, GTLK Europe announced that it had made a $14.875 million payment on notes maturing in April 2025. After central bank approval, the money was issued to the Bank of New York Mellon, its paying agent.

“The Company has worked tirelessly to clear funds for all amounts due and owed,” it said. The statement went on to say GTLK Europe expects this “precedent” to allow for future interest payments on other Eurobond issuance and is working with the Central Bank of Ireland on this.

The central bank’s internal records show two Eurobond payments approved through July 15. Last month, a Cypriot firm filed a lawsuit against GTLK Europe and the central bank to obtain orders compelling GTLK to complete the sale of vessels to them ahead of an upcoming US deadline to complete such deals.

The central bank is one of three bodies in Ireland that can authorize exemptions from EU sanctions against Russia. The State Department has granted William Fry’s lawyers a number of waivers to allow them to accept payments for his representation from Dmitry Mazepin, a Russian oligarch and Vladimir Putin’s ally.

Mazepin and five related companies, represented by Frys, are being sued in Dublin over an alleged corporate raid to gain control of TogliattiAzot (ToAZ), one of the world’s largest producers of ammonia.

Department records show that it has told William Fry that the sanctions do not prohibit the provision of legal services to companies on the list, but exceptions are needed “to facilitate payments for such services”.

After reviewing bills for the case, which began in 2016 and is expected to run for several years, the department said it “does not exceed what is reasonable under the circumstances.”

The Department of Enterprise, Trade and Employment granted exemptions to ADM Arkady and Comex McKinnon to allow importers to import Russian animal feed.

dr Eamon Cahill, the department’s director of trade licensing and controls, warned in an email that “reliance on this exemption is unsustainable over the long term”.

He said it would be “politically unacceptable for Ireland to routinely authorize derogations”.