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Flight Records Say Russia Sent Syria Tons of Cash

The records of overflight requests show more than 200 tons of “bank notes” from Moscow to Damascus.

The Syrian plane mentioned in the flight manifests obtained by ProPublica. (Flickr user Jerome_K)

This past summer, as the Syrian economy began to unravel and the military pressed hard against an armed rebellion, a Syrian government plane ferried what flight records describe as more than 200 tons of “bank notes” from Moscow.

The records of overflight requests were obtained by ProPublica. The flights occurred during a period of escalating violence in a conflict that has left tens of thousands of people dead since fighting broke out in March 2011.

The regime of Bashar al-Assad is increasingly in need of cash to stay afloat and continue financing the military’s efforts to crush the uprising. U.S. and European sanctions, including a ban on minting Syrian currency, have damaged the country’s economy. As a result, Syria lost access to an Austrian bank that had printed its bank notes.

“Having currency that you can put into circulation is certainly something that is important in terms of running an economy and more so in an economy that is become more cash-based as things deteriorate,” said Daniel Glaser, Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes.  “It is certainly something the Syrian government wants to do, to pay soldiers or pay anybody anything."

According to the flight records, eight round-trip flights between Damascus International Airport and Moscow’s Vnukovo Airport each carried 30 tons of bank notes back to Syria. There are records relating to the flights in Arabic and English as well as copies of over-flight requests sent to Iran, which are in Farsi.

Syrian and Russian officials did not respond to ProPublica's questions about the authenticity and accuracy of the flight records. It is not possible to know whether the logs accurately described the cargo or what else might have been on board the flights. Nor do the logs specify the type of currency.

But ProPublica confirmed nearly all of the flights took place through international plane-tracking services, photos by aviation enthusiasts, and air traffic control recordings. 

Each time the manifest listed “Bank Notes” as its cargo, the plane traveled a circuitous route. Instead of flying directly over Turkish airspace, as civilian planes have, the Ilyushin-76 cargo plane, operated by the Syrian Air Force, avoided Turkey and flew over Iraq, Iran, and Azerbaijan.

 

The flight path between Syria and Russia described in the manifests.

Tensions have been rising between Syria and Turkey since the spring. Last month, Turkey forced down a Syrian passenger plane traveling from Moscow. Turkey suspected the flight of carrying military cargo but officials have not said what, if anything, was confiscated.

If the flight manifests are accurate, a total of 240 tons of bank notes moved from Moscow to Damascus over a 10-week period beginning July 9th and ending on September 15th.

U.S. officials interviewed said evidence of monetary assistance, like military cooperation, point to a pattern of Russian support for Assad that extends from concrete aid to protecting Syria from U.N. sanctions.

In September, 2011, six months into the violence, the European Union imposed sanctions that prohibited its members from minting or supplying new Syrian coinage or banknotes. In a statement, the EU said the sanctions aimed “to obstruct those who are leading the crackdown in Syria and to restrict the funding being used to perpetrate violence against the Syrian people.” At the time, Syria’s currency was being minted by Oesterreichische Banknoten- und Sicherheitsdruck GmbH, a subsidiary of Austria’s Central Bank.

President Obama has issued five Executive Orders that prevent members of the Assad regime from entering the United States and accessing the U.S. financial system.

 “Increasingly, it is more difficult to finance the war machine and the cost of the war is becoming more expensive for the Assad regime,” said one U.S. official who spoke on the condition of anonymity. “Targeted sanctions on those leading the violence are working and start to bite into their pocket books.”

Russia appears to be helping Syria blunt the impact of the sanctions.

This past June, Reuters reported that Russia had begun printing new Syrian pounds and that an initial shipment of bank notes had already arrived.  The report was denied by the Syrian Central Bank, which claimed the only new money in circulation were bills that had replaced damaged or worn bank notes. Such a swap, the bank contended, would have no effect on the economy.

On August 3rd, the official Syrian news agency SANA, reporting from a news conference in Moscow with Syrian and Russian economic officials, quoted Syrian officials acknowledging that Russia is printing money. Qadr Jamil, Syria’s deputy prime minister for Economic Affairs, was quoted by SANA as calling the deal with Russia a “triumph,” over sanctions.

Syrian Finance Minister Mohammad al-Jleilati said that Russia was providing both replacement notes and additional currency to, as SANA put it, “reflect the country’s changing GDP.”  

Al-Jleilati said the money would have no effect on inflation. Printing new notes beyond simply replacing old ones could undermine Syria’s already battered currency.

At the time of the meeting, at least 30 tons of currency had already been delivered, according to the flight records, and another 210 tons would be delivered in subsequent flights.

In its regional economic outlook released earlier this month, the International Monetary Fund noted that Syria’s currency has lost 44 percent of its value since March 2011, trading for about 70 pounds to the dollar compared with about 47 pounds when the conflict began.

Ibrahim Saif, a political economist based in Jordan and a resident scholar at the Carnegie Middle East Center said 30 tons of bank notes twice a week is a significant amount for a country like Syria.

“I truly believe it’s not only that they’re exchanging old money for new notes. They are printing money because they need new notes,” Saif said.

“Most of the government revenue that comes from taxes, in terms of other services, it’s almost now dried up,” noted Saif. Yet, “they continue to pay salaries. They have not shown any signs of weakness in fulfilling their domestic obligations. The only way they can do this is to get some sort of cash in the market.”

Before the unrest broke out, Syria had about $17 billion in foreign currency reserves. Saif said he and other economists in the region estimate they now have about $6-8 billion in reserves, dwindling about $500 million a month for salaries and supplies to keep the government running.

In Moscow, the Syrian finance minister had said that his country required additional foreign currency reserves, which Russia may provide in the form of loans.

“It’s possible the Syrians are acquiring foreign currency reserves, either Euros or US dollars, which they would need to conduct any serious commerce,” said Juan Zarate, who served as Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes during the Bush administration.

Zarate noted that other countries, when faced with economic sanctions, have leaned on allies for foreign currency reserves. China supplied North Korea with such funds in the past and Venezuela agreed to sell reserves to Iran.

Syria’s currency is still traded on open markets, but there is limited on-the-ground information about the economy, including inflation.  

Officials at the IMF “have not been able to get direct information about Syria for at least a year,” Masood Ahmed, director of the group’s Middle East and Central Asia department, told reporters at a conference in Tokyo last month.

Glaser, at Treasury, declined to put a figure on Syria’s current reserves but said the Syrian economy is suffering in part from a lack of tourism and a ban on oil sales, both of which provided Damascus with foreign currency. “There is significant inflation in the country. It can be caused by adding new currency or not having foreign reserves to prop up the existing currency.”

Quinn Norton contributed to this story.

Every country has its mistresses, weaknesses and all.
US/UK has those middle eastern rich subtle dictatorship ones, poor Russia chose the one it could afford. Fair deal.

Jerome Donnelly

Nov. 26, 2012, 1:48 p.m.

The Assad government remains Syria’s legal government.  Russia has the right to send aid in many forms, including financial and the arms for which contracts were signed before the rebels engaged in the current civil war.  The Obama administration’s refusal to allow Syria to access its funds in the US is of dubious legality.  So was the recent $45 million in aid that the US has given to the rebels, and so is the use of CIA logistical support operating on behalf of the rebels from inside Turkey.

The US is making a mistake in supporting the rebels; Assad is no angel but neither is he a demon.  As was the case in Libya, the driving forces behind the rebellion come from outside Syria.  The recent slow-down of American cheerleading for the rebels results from its growing awareness that radical fundamentalist Muslims may take charge in the civil war.  The best thing the US can do is to help negotiate a cease-fire.  Syrians just recently voted in a new (and much improved) constitution that calls for new presidential elections in 2014.

We give them a civil war Russia give’s them financial support to run their economy.

The first three commentators could well be Syrian regime members or supporters in disguise.

At least we allow freedom of expression - which is a lot more than you can say about Assad/Syria or Putin/Russia.

30 tons of bank notes back to Syria…

And I would be so happy with just a pound or two.

“Assad is no angel but neither is he a demon.” 
  This is the same Assad that sends his army to kill his own countrymen?

George Laszlo

Nov. 26, 2012, 7:16 p.m.

Russia is not the only country supplying Syria with money. Although it has not been widely reported, even Iraq has been loading up trucks full of US dollars destined for Damascus. We’re talking about hundreds of millions if not billions. All approved by the current Iraqi government.

Sergio Marcelo

Nov. 26, 2012, 10:26 p.m.

I’ve talked to people from Syria, they have good faith in Assad’s governament, the say the ‘terrorists’ in Syria mostly come from countries like Qatar, Libya, Turkey (backed by) Also they say the videos on YouTube the terrorists (FSA) have different accent than Syrian people, only a minority of terrorists is from Syria. And these fundamentalists foreign fighters have lots of weapons, and are very brutal. To me, it seems the way the media is picturing Assad is very biased and we should be aware of that. Do some research before condening him. I think you might be surprised about what you may find out. I found out a website called “LandDestroyer” that had some pretty good articles, it is worth checking. (Google it)

Sergio, are some of those people who “have good faith in Assad’s government” any of the tens of thousands of ordinary Syrians who fled their homeland to escape the murderous Assad regime?? Were you able to talk, about the “good faith”  with any of the dead women and children before they died from indiscriminate Syrian Army clusterbomb attacks?

Barrie Collins

Nov. 27, 2012, 3:31 a.m.

200 tons of banknotes to Syria, hmmm, how does America send its money to Israel? Big countries bleed money to little countries, little countries just bleed.

Journalism in the public interest, or in the interest of Washington? You’re starting to grate on me, ProPub. Take a note from NSArchive, and do some actual journalism.

Hm.

OK, here’s the thing.  Russia is sending money?  That’s a scandal.  We have an embargo against selling privacy technology to Syrian citizens but can sell surveillance to the Syrian government?  You know, like what they used to find and assassinate Marie Colvin (which we couldn’t be bothered to investigate)?  Business as usual.

Russia is sending money?  Scandal.  We LOSE plane-loads of hundred dollar bills flown to Iraq?  Forgotten.

I’m not saying this isn’t an unfortunate turn.  However, it’s worth pointing out that the resistance in Syria (as it was in Libya, after we poked our noses in there) is largely identified as al-Qaeda, with the actual civilians caught in the middle of violent, oppressive factions.  So it’s possible that Russia is playing some sort of game to keep either side from gaining an upper-hand, or it may be the “civilian resistance” (who our government claims to like and wants to support) is feeding us garbage information to get our government to counter the evil rubles with rocket launchers (that can be used against our ambassador in 2014).

Sergio Marcelo

Nov. 27, 2012, 2:27 p.m.

woodrich,
They are alive. One is from Aleppo, one from Damascus, and the other is out of Syria right now but his family is still there. If Assad was killing his own people, the army would not be on his side, and Syria could not resist for so long almost 2 years. The support the rebels are having is really huge, today I watched this video of Turkey sending heavy military hardware:
http://www.liveleak.com/view?i=da1_1353888013

Sergio is either has no idea of what’s going on or is paid by one of the 15 intelligence groups of the Assad regime.  The Syrian army is over 300,000 soldier, wouldn’t 20%  of that army be able to crush terrorist group ?    he is relating the same stupid joke the Assad regime is publicizing , which is a big lie.  The free army is composed of Syrians who are sick of the brutal regime who in early 80`s killed over 30,000 people in Hamah.  The problem the Syrians currently have is that Assad regime was serving Israel for decades and protecting their borders, and that is why the East and West are hesitant to provide support to the civilians to secure their freedom from this brutal regime.

Totally agree with Al Dorman with regards to the Propublica’s coverage of contenscious world issues. yet turn a blind eye to more important erosions of civil liberties in the USA via the NDAA.

@abuanas. I think you should at least give sources for your stats.

So whats the big deal, of Russia giving money to Syria. US gives money to Israel and Qatar/ Saudis to the FSA. Seems like the pot calling the kettle black.