Crimea tourism deal could land Thomas Cook in hot water

https://www.rt.com/business/344173-thomas-cook-crimea-sanctions/

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Russian tour operator Intourist, which is 75 percent owned by Thomas Cook Group, has provided upfront payments to Crimean hotels. This could mean trouble for the British travel company if the deal violates Western sanctions imposed against the peninsula.

As part of the Russian Federation, Crimea is under US and EU sanctions after the peninsula voted to leave Ukraine and rejoin Russia in 2014.

"We have started a program with our hotel partners. We help them with money before the season, so they can increase their level and quality. Such experience can be applied to the whole of Crimea," Managing Director of Intourist - Thomas Cook Chavdar Stoyanov told RIA Novosti.

As Vedomosti daily reports, Thomas Cook has a 75 percent stake in Intourist, with the other 25 percent owned by a subsidiary of the Russian Sistema conglomerate. Sistema as a minority shareholder in the tour operator is not involved in the operational management of the company.

According to Nikolay Zaychenko, partner at law firm Nevsky IP, prepayment for rooms is not the acquisition of property rights, but may fall under the category of financial services, which has been prohibited for Western companies since December 2014.

He added that a large amount of prepayment and special conditions for the deal may be regarded as a commercial loan. On paper, Intourist is buying a service in Crimea, which is not prohibited, but the rooms for the company are preordered by a firm registered in Crimea (Ethno Tour), which implies Intourist’s indirect involvement in the deal.

The holiday season in Crimea started on May 1. In late April, the head of the Federal Tourism Agency Oleg Safonov said the peninsula expects about 5.5 million visitors this year, which is 10 percent more than in 2015.