Eurolab and Andriy Palchevsky tied to Russia, Caribbean tax avoidance

Volodymyr Zelenskiy, the comedian and actor turned presidential candidate, perhaps wanted to provide the Ukrainian people with clarity and peace of mind when he called for himself and his rival, incumbent Petro Poroshenko, to undergo drug testing on April 5. Instead, he might have accomplished the exact opposite – sparking confusion and anger.

As Ukraine’s already unusual presidential election campaign took a turn towards the absurd — with both candidates submitting blood, urine and hair samples — questions began to swirl around Zelenskiy’s chosen medical laboratory, Eurolab, and its owner, Andriy Palchevsky, a Ukrainian businessman, broadcaster and political figure with ties to Russia.

Palchevsky’s clinic has connections to shady, offshore holdings via a residential address in Essex, England. And Palchevsky appears to have strong connections to Russia and can be linked to a vast network of offshore companies that are shrouded in secrecy and seem designed to avoid tax, an investigation by the Kyiv Post shows.

Eurolab did not respond to multiple requests for an interview and did not return calls before publication time. Palchevsky did not respond to messages requesting an interview.

England-based, Russian-owned?

According to Ukrainian company registries, Palchevsky co-owns the Eurolab Services company in Kyiv with a Moscow-based Russian national, Aleksey Kirillov. That individual’s Moscow address is also linked to two limited liability companies – Sheraton Business Ltd and Amerton Group Ltd.

While Eurolab appears in Ukrainian company registries, the legal entity Eurolab Services LLP is officially registered to a surprising address in England, 64 Hamilton Avenue, Ilford, Essex – an area some 15 kilometers northeast of central London.

The building at 64 Hamilton Avenue is a modest three-bedroom house on a residential street in a quiet, suburban area that is not associated with Russian or Ukrainian oligarchs. An expensive, luxury Jaguar car parked outside the address (as seen in a March 2018 image from Google Street View) stands out on an otherwise unexceptional street in a low-income area.

U.K. company records show that 25 businesses are officially “registered” to this house, which by itself is unusual. Ten can be connected, directly or indirectly, to Palchevsky and his known associates.

According to U.K. Companies House, Eurolab Services LLP has four firms listed as its controlling officers: Consort Group Ltd and Regent Business Ltd, tied to other Russian nationals, and the Moscow-linked companies tied to Aleksey Kirillov, Sheraton and Amerton.

Official documents show that all four companies are ultimately registered in Charlestown, Nevis, a well-known haven for tax avoidance in the Caribbean.

Company records also show that Andriy Palchevsky is the majority owner of Eurolab Services LLP, and further show that the company declares about 1.96 million pounds in assets, 350,000 pounds in turnover and 1.6 million pounds in the bank.

Eurolab is not a traded company in the U.K, but it must still abide by U.K. law.

Medical Center Eurolab is located on Solomenskaya Street in Kyiv. The company has a website in Ukraine, but no mention of the U.K. parent firm Eurolab Services LLP can be found. This could be a breach of U.K. company law. Transparency regulations and the Companies Act 2006 requires that U.K. registered firms display their registered address on websites, invoices and letters.

Official U.K. records show that many British firms registered at 64 Hamilton Avenue can be linked to Palchevsky and the Caribbean tax haven companies that he is associated with. Many of the firms are also directed by him or various Russian nationals.

Here are a few:

• Aviahorizon LLP – which describes its work as the “trading of aircraft and related items” – is also registered to Nevis-based Consort, Regent, Amerton and Sheraton and records Andriy Palchevsky as its only director. Its U.K. turnover is unreported, but it has declared assets of 1.6 million pounds plus 15,000 pounds cash in the bank.
• Flavourland UK LLP – an Italian business registered in Britain and Nevis that produces food flavorings and e-liquids for electronic cigarettes – is also registered to Consort, Regent, Amerton and Sheraton. It records Andriy Palchevsky as its only director. It declares 3.2 million pounds in turnover, 728,000 pounds in assets – but only 43,000 pounds in the bank.
• Intellectual Venture Partners LLP, an “Italian brand management company” that declares zero U.K. assets, turnover or cash in the bank, is also owned by Amerton and Sheraton.
• Glenfield Management LLP is registered to Nevis-based Consort, Regent, Amerton and Sheraton and records a Russian national as its only director. It declares no turnover, assets or cash in the U.K.

• Lochnagar Properties LLP is also registered to Amerton and Sheraton and has Belarusian and Russian nationals listed as directors. It declares negligible turnover, assets and only 394 pounds cash in the U.K.
• Shelton Global LLP was registered to Amerton and Sheraton, had a Russian national as a director and declared assets of 500,000 pounds before it was dissolved on Feb. 5.
• Metprom Invest LLP is a large, Russian metallurgical group that is registered to 64 Hamilton Avenue and to a company in Charlestown, Nevis (Coventry Investments), but cannot be directly linked to Palchevsky.
• Westlink Commerce LLP is registered to the Nevis-based Consort, Regent, Amerton and Sheraton and has another Russian national as its director. Its turnover, assets and cash in the bank are unreported.
• Waterford Investments LLP is also registered to the Nevis-based Consort, Regent, Amerton and Sheraton and registers a different Russian national as its director. It declares 800,000 pounds in assets but only 6,000 pounds in the bank.

Palchevsky has been named in previous data leaks and investigations related to tax avoidance, but that focused on the British Virgin Islands. The Federation of Saint Kitts and Nevis – a pair of small Caribbean islands where Charlestown is located – was included on a blacklist compiled by the Financial Action Task Force, part of the Organisation for Economic Co-operation and Development.

The international organization’s experts say that the islands have been non-cooperative in efforts to combat tax evasion and money laundering and have become a haven for dirty money.

Many of the companies that are registered to 64 Hamilton Avenue could be using the address for their accounting, before having their assets funneled into a jurisdiction where they can avoid tax or launder money.

Shady accounting

The Kyiv Post obtained the property deed for 64 Hamilton Avenue from HM Land Registry, the U.K. authority that registers property and real estate ownership. The house is registered to U.K. national Brian M. Scholar. The Kyiv Post also obtained Scholar’s phone number through other records.

On April 8, Scholar told the Kyiv Post by telephone that his accounting firm does the accounts for Eurolab Services LLP and Palchevsky, although he has no direct dealings with them, communicating instead via a London-based intermediary. This go-between is probably a U.K. national who likely speaks Russian, he claimed.

“I just do the accounts,” he said. “I don’t know what they do with the money.”

Scholar said he deals with a number of Russians or Russian-speaking clients and many of the companies he does accounts for are not active or trading in the U.K.

The accountant was surprised to receive a phone call from Ukraine and seemed hesitant about going into too much detail about his clients, who, he insisted, he rarely dealt with directly.

“I am pretty in the dark about what these people do,” he said. “I will have to give it some second thoughts… maybe not work for them further.”

Palchevsky background

Beyond business ties, other aspects of Palchevsky’s biography have raised concerns about connections to Russia.

He graduated from Russia’s Military Institute of Foreign Languages, a predecessor to today’s Military University of the Ministry of Defense, an institute with strong ties to the Russian armed forces and military intelligence.

According to various biographies, Palchevsky served in the Soviet and Russian armed forces for eight years between 1983 and 1991, although the exact nature of this military service is unclear. Palchevsky was reportedly, for a time, a Russian citizen with political ambitions.

According to multiple Russian-language news sources and archived biographies, after leaving the military he became vice-president of a Russian wine and beer-producing union before launching an unsuccessful bid for a seat in the State Duma. He was secretary general of the “Party of Beer Lovers in the Russian Federation,” a tongue-in-cheek party that he co-led between 1995 and 1998.

After years of involvement in numerous businesses, Palchevsky temporarily rebooted his political career in Ukraine. From March until August 2010, he served as the Ukrainian deputy minister of family, youth, and sports. Around this time, his dual nationality was reportedly terminated.

Drug tester

Undergoing drug and alcohol testing at Eurolab was a demand that Zelenskiy imposed as a prerequisite for election debates.

Zelenskiy underwent testing at Eurolab on April 5, while Poroshenko opted to be tested on the same day by specialists at Kyiv’s Olympic Stadium.

Since then, questions have begun to swirl around the integrity of the Eurolab laboratory, its test and its owner.

While Zelenskiy has said that he knows the owner, but is not friends with him, Palchevsky appears to have expressed support for the newcomer, even going as far as to say, that Zelenskiy “was born to be the president of Ukraine”.

At the same time, Palchelvsky has called for “resetting the relationship” between Russia and Ukraine, including on Russian state television.