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Honorary Consuls: Wealth Can Beget Wealth PDF Print E-mail
Written by OCCRP   
Sunday, 29 November 2009 16:25

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Consulate in Bitola --Courtesy of Nova Makedonija

Wealth and connections are the building blocks to a rarified form of freedom from travel restrictions, the title of honorary consul.

The honorary consul status is outlined in the Vienna Convention on Consular Relations of 1963 and describes a welter of privileges and opportunities, as well as the responsibilities of an honorary consul. Those duties, for a post that carries no stated salary, include enhancing economic, scientific and cultural development of the country a person represents.

This status and title can be impressive, as are the stated responsibilities, but just like virtually every other means of unrestricted travel and particular business opportunities, it is on sale, often goes to those with connections, has considerable business and personal advantages, and does not come cheap. What the position also allows is that the person may stay in his home country and represent the interests of a foreign country and deal in its exports.

In Russia, www.honoraryconsul.ru offers a description of the honorary consul that includes elements that would pique anyone’s interest: “diplomatic passport and visa-free travel all over the world…right to bring three cars to the country without import duty and to register the cars as the consul…the right to have a red diplomatic vehicle registration plate…..”


It continues. The status opens “vast opportunities…access to the export resources of the country you are representing and its export quotas…allows transfer of unlimited sums of money in cash across a border…luggage is not checked at customs… get many useful acquaintances in business circles and top…institutions…”


A Moscow jurist, who says he can assist in obtaining this status and says those privileges are real, says the price begins at $90,000, but he did not want his name used because the “topic is not too open.” He did not want to divulge any details, saying only that the process is very complicated and clients might be sensitive to his revealing it.


As with many things offered on the internet, not all sites are reliable. One that gives its addresses in the Netherlands and Spain (www.right-way.net) had a phone number that did not work and the Netherlands address was that of a hotel, and the one in Spain could not be traced to a legitimate business.

Some Problems Arise

Because of various problems, though, some countries are re-examining the role of honorary consuls to their countries. Liberia, in October, voided the practice of giving such representatives diplomatic passports, saying that in doing so, it was falling into step with practices of other counties. Without offering details, it stated that anyone who purported to be an honorary consul from any of a half-dozen countries that it named, was “doing so fraudulently.”

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Naum Kaichev --Courtesy of Nova Makedonija

In Croatia, the government was stung by accusations that the honorary consul of Croatia to the Swiss Confederation, Waldo Bernasconi, a doctor, was implicated in a scandal involving sexual assault of a 12-year-old female patient. In an October press release, the government said that Prime Minister Jadranka Kosor had requested an analysis of all its 61 honorary consuls. The move came, according to the press release, because the prime minister considered that the involvement of Bernasconi in a scandal had harmed “Croatia’s image in the world.”


There are varying problems elsewhere. In Macedonia, Naum Kaichev, who represents Bulgaria in Bitola, last year withdrew a demand for €500 donations from tourist companies in Bitola to fund a Bulgarian national day. The companies had complained publicly that they felt they were being exposed to extortion.


Not every country in Eastern Europe, though, is re-examining the role of honorary consuls or seems ready to abolish the positions. In fact, the title, in many cases, can convey more information about prior connections than it does about helping a country the honorary consul represents.


In Bosnia and Herzegovina (BiH), Milorad Majkic, a controversial businessman born in Croatia and living in Serbia, is the owner of the biggest chain of slots clubs and serves as the honorary consul of the Republic of the Congo to BiH. He took over his slots company from a man who had fled to the Congo from Yugoslavia because of a conflict with criminals.


A Connected Network

In Russia, co-founders of “The League of Honorary Consuls” in 2002 included at least three friends of Vladimir Putin, now the country’s prime minister and then its president. According to the state register of organizations, those were Viktor Khmarin, who studied at Leningrad State


University with Putin, Sergey Fursenko, who created the country house compound “Ozero” near St. Petersburg with Putin and Yuri Kovaltchuk, who also was a founder of “Ozero” and is the head of “Russia”, the St. Petersburg bank that is considered a wise choice for anyone who considers Putin a friend. Another co-founder of the league was Taimuraz Bolloev, the former head of Baltica Brewing Company and now the head of Olympstroy, the Russian state corporation responsible for preparations for the Olympic games in Sochi in 2014. As honorary consul, Khmarin, in northwest Russia, represents the Seychelles Islands; Fursenko, the Bangladesh Republic; Kovaltchuk, Thailand. Bolloev, at the time of the founding, represented Brazil.


Reporters for OCCRP tried to contact each of the four to discuss their duties and their achievements, but none answered a letter of inquiry.


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Valeriy Palchuk, honorary consul to Oman in Ukraine.

In Ukraine, wealthy and connected men who have become honorary consuls and the countries they represent include Volodymyr Polyachenko, honorary president of construction holding company Kyivmiskbud, and a member of parliament (Chile); Nver Mhitaryan, head of construction company Poznyakizhilbud (Colombia); Oleh Svynarchyk, who runs automobile manufacturer Bohdan (Seychelles Islands); Ihor Balenko, who with French retail giant Auchan owns the country’s largest supermarket chain, Furshet (Peru). Valeriy Palchuk, with his son, vice consul Vyacheslav Palchuk, deals in cars, grain export and tourist business with Oman, to which he is the honorary consul. However, the prosecutor’s office of Crimea is investigating the misuse of funds and possible credit violations at the Artek Children’s Camp during the period that the elder Palchuk headed it. The prosecutor’s office declined to offer any additional details.


Prior connections are not everything, though, according to the websites offering assistance in gaining such a post to Ukrainians—at a considerable price. The biggest is CFC (cfc.com.ua) which notes that the easiest honorary consulates to get are those of African countries and the hardest, those of countries within the European Union (EU). Costs start at €50,000 and the process can take a couple of years. A single hour of consulting with CFC costs €300.


Besides CFC, there have been attempts by foreign businesses to work in this market. For example, the Russian company Elma Travel, and the Hungarian Afrika Centrum (http://www.afrikacentrum.hu/index.php). Obtaining a consulate through Elma, according to its materials, costs from $70,000 to $1 million, depending on the country’s closeness to the EU. In 2008, Africa Centrum advertised honorary consulate, trade attaché, or the ambassador positions,


or a diplomatic passport or a citizenship of the Central African Republic starting at €50,000. The company stressed that the country was very rich in gold, diamonds, platinum and other nonferrous metals and that its government would offer all possible assistance to compensate the costs.


--Roman Shleynov - Moscow, Vlad Lavrov - Ukraine,
Aleksandar Bozinovski - Macedonia, and Stevan Dojčinović - Serbia


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