• Home
  • /
  • News & Trends
  • /
  • Marine Le Pen’s Far-Right French Party to Pay Nearly $13 Million to Russian Military Contractor

Marine Le Pen’s Far-Right French Party to Pay Nearly $13 Million to Russian Military Contractor 

 April 21, 2022

PARIS—The far-right party of French presidential candidate

Marine Le Pen

has begun paying a settlement of 12 million euros—equivalent to $12.94 million—to a Russian military contractor under U.S. sanctions, part of a debt restructuring that granted her party more time to repay a loan it took from a Russian bank, according to Russian and French government records.

Aviazapchast JSC—a Moscow-based company that supplies Russian military aircraft and parts across the Middle East, Africa and Asia—took over the €9.4 million loan in 2016 after the bank that originated it, Moscow-based First Czech-Russian Bank, went bankrupt, the records show. Holding loans is well outside of Aviazapchast’s normal line of business, according to the company’s corporate reports, which contain no mention of the transaction.

In June 2020, Ms. Le Pen’s party, National Rally, and Aviazapchast reached an agreement allowing the party to pay €12 million in principal and interest to Aviazapchast in quarterly installments through 2028, according to a copy of the agreement reviewed by The Wall Street Journal. The settlement followed a complaint for nonpayment of the loan that Aviazapchast brought in Moscow Arbitration Court against Ms. Le Pen’s party.

READ MORE:  Wimbledon have ranking points STRIPPED by ATP as tour cites ‘discrimination’ of Russian and Belarusian player ban

The 2020 agreement allowed Ms. Le Pen’s party to conserve cash as she prepared to run for president by pushing the deadline for repaying the loan back nearly a decade from its original due date of September 2019. That is far longer than French political parties usually have to repay when they borrow from banks, French election experts say. The party had been making interest payments to a notary in Moscow but hadn’t repaid any of the principal by the original due date, according to French election records.

On Sunday Ms. Le Pen will face off with President

Emmanuel Macron

in the runoff of France’s presidential election.

French President Emmanuel Macron, left, and far-right leader Marine Le Pen during a debate earlier this week.



Photo:

Alexandre Marchi/maxppp/Zuma Press

Aviazapchast declined to comment. A spokesman for National Rally and Ms. Le Pen didn’t respond to requests for comment on the agreement.

READ MORE:  Sleep Problems and Disorders: When it’s The Right Time to See a Doctor?

Wallerand de Saint Just, a senior National Rally official who was involved in the negotiations with Aviazapchast, said the Russian company was willing to restructure the debt because the original loan had a relatively high interest rate of 6% that was maintained under the settlement. “They considered that their money was well-compensated,” Mr. de Saint Just said.

On Wednesday, Ms. Le Pen acknowledged there had been a long delay in repaying the loan.

“We are a poor party, but that’s not dishonorable,” Ms. Le Pen said during a debate with President Emmanuel Macron. She didn’t mention Aviazapchast or the agreement.

Mr. de Saint Just said the party has continued to make payments to Aviazapchast according to the schedule set out in the settlement. Ms. Le Pen’s party made its first payment of the loan’s principal in the second half of 2020, sending €1 million to Aviazapchast, according to French campaign records. It was scheduled to pay up to €1.3 million annually until 2028, according to the Russian court records.

im-529729

Marine Le Pen talks with a worker, left, and Wallerand de Saint Just, right, during a campaign stop last week in Gennevilliers, France.



Photo:

emmanuel dunand/Agence France-Presse/Getty Images

French law forbids banks and other companies from making campaign contributions, but they can lend to campaigns. The law doesn’t impose deadlines for when such loans must be repaid.

READ MORE:  Chris Rock heaps praise on Kim Kardashian in surprise appearance at SNL party

The National Commission for Campaign Accounts and Political Financing, France’s campaign finance watchdog, said it reviewed the settlement with Aviazapchast to determine whether the repayment terms could be considered a form of donation under French law.

Frederique Dooghe, spokeswoman for the commission, said its examination found that the settlement “could not be considered as indirect aid” under French law, because the agreement amended the existing loan rather than replacing it.

France’s Far-Right Marine Le Pen Tries to Soften Her Image to Broaden Appeal

Aviazapchast reviewed the party’s obligation to repay the loan under French law in negotiating the settlement, Mr. de Saint Just said. He said he doesn’t know why Aviazapchast took over the loan in 2016. The party had no control over that decision, he said.

The Russian loan has fueled worries that Ms. Le Pen is under the sway of the Kremlin—concerns that have grown since Russia’s full-scale invasion of Ukraine in February. The loan agreement was signed in September 2014, six months after Russia annexed Crimea and began supporting an insurgency in eastern Ukraine.

READ MORE:  The Right Injury Lawyer in San Diego: To Fight for Financial Compensation

“You can’t correctly defend the interests of France on this subject, because your interests are linked to people close to Russian power,” Mr. Macron said at Wednesday’s debate.

“I am a completely and totally free woman,” Ms. Le Pen replied, adding later: “I have no other dependence than to repay my loan.”

Ms. Le Pen has long been one of the Kremlin’s most vocal supporters in Europe. In 2014, she defended the annexation of Crimea and opposed European sanctions on Russia. Ms. Le Pen has condemned the February invasion and said she supports the current round of sanctions against Russia. She has also expressed skepticism about delivering weapons to Ukraine, saying they could draw France into direct conflict with Russia.

In response to the loan, France in 2017 prohibited political parties from borrowing from banks that aren’t established in the European Union or the European Economic Area, which includes Norway and Iceland. That law, however, didn’t address political parties’ reliance on bank loans in general.

READ MORE:  Hong Kong reopens beaches, Beijing relaxes quarantine rules

The French state reimburses candidates for up to half of their election expenses, provided they garner more than 5% of the vote. But until elections results are known, campaigns often rely on bank loans for cash that they repay once they receive reimbursement from the state.

Ms. Le Pen has said her party was forced to borrow abroad because no French bank would lend to it. She has asked Mr. Macron’s government to create a so-called bank of democracy that would finance French political parties. Mr. Macron backed the idea, but then backtracked after France’s highest administrative court said the proposal hadn’t been adequately studied.

READ MORE:  The Russian Orthodox Church leader who gave his blessing for the war in Ukraine

“No bank wanted to lend money to me,” Ms. Le Pen said at Wednesday’s debate. “Why did you not go to the end on this bank of democracy, that you knew would fill in a democratic deficit of banks that seem to choose which candidates they support and which they don’t?”

im-528931

Marine Le Pen during Friday’s debate with Emmanuel Macron. The two face off against each other in Sunday’s second round of France’s presidential elections.



Photo:

ludovic marin/Agence France-Presse/Getty Images

Aviazapchast has refurbished Russian military aircraft for Syria and supplied oil and lubricants to the country’s air force, according to corporate statements. In November 2020, the U.S. State Department imposed sanctions on the company for violating a U.S. law that aims to stop weapons sales to Iran, North Korea and Syria.

Aviazapchast hasn’t come under sanctions related to the war in Ukraine. Western sanctions targeting Russia for its invasion of Ukraine bar U.S. and European companies from supplying parts and services to state-controlled Russian firms in the aerospace and defense industries. Mr. de Saint Just said those sanctions haven’t impacted the party’s ability to pay the settlement.

READ MORE:  The outrage over 90-year-old Padma awardee being evicted from his house

Aviazapchast, which also supplies parts for civil aviation, is owned by Valery Zakharenkov, a Russian businessman. Aviazapchast has a business unit in France, and Mr. Zakharenkov is listed as the owner of several companies in Ireland.

Representatives of Mr. Zakharenkov’s Irish companies didn’t respond to requests for comment.

Write to Matthew Dalton at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Publisher

related posts:

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}