“In response to Russia’s invasion of Ukraine, the UK, EU, and US governments imposed sanctions on billionaire tycoons considered to be part of President Vladimir Putin’s inner circle.”
Following Russia’s invasion of Ukraine, the West, consisting of the United States, the United Kingdom, and the European Union, have imposed a variety of sanctions aimed at inflicting economic pain on Russia.
The sanctions include restrictions on the assets of over 16 Russian billionaires, the much-storied Oligarchs who made their fortunes through murky dealings with the Kremlin and are believed to secretly hold assets for Vladimir Putin, the Russian President. They have so far lost $80 billion since their assets became subject to western sanctions.
Russian oligarchs are a significant reason why, unusual for a developed country, 51% of Russian assets are held in the West. The most high-profile oligarch may be Roman Abramovich, former owner of London’s Chelsea Football Club. But there are scores of oligarchs who own a range of assets in western capitals like London, New York, and Paris, ranging from luxury flats, yachts, country homes, stocks, to investment firms.
Alisher Usmanov, who is considered one of President Putin’s closest oligarchs due to the widespread belief that he holds vast assets for the President, is one of the Russian billionaires hit by sanctions. According to Forbes, he is one of Russia’s wealthiest persons with a net worth of $17.6 billion. Alisher is the CEO of USM Holdings, a large conglomerate with interests in mining and telecommunications; he is also the owner of MegaFon, Russia’s second-largest mobile network. He is currently unable to access his offshore investments and real estate holdings, or travel internationally because of sanctions imposed by the European Union, the United States, and the United Kingdom.
Mikhail Fridman, founder of the London-based private equity firm “LetterOne” is the most recent individual to be sanctioned. He was forced to resign as the company’s founder and was forbidden from participating in any company-related activities. After being kept out of the offices on Friday because the company’s workers refused to provide him entry to the premises, he was also denied access to the company’s records. Fridman’s assets in his company were frozen as a result of the sanction, and all of his rights, including dividend payments, withdrawals, wage payments, and communications, were effectively disallowed.
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As the sanctions against Russian oligarchs get more severe, President Putin has yet to be persuaded to rein in his aggression by withdrawing his troops from Ukraine.
Why are Russian billionaires being affected by the sanctions?
Oligarchs play critical roles in Russia’s political economy through participating in a variety of activities, many of which are linked to President Putin. They provide Putin’s dictatorship with essential public support and lead major Russian firms and institutions. The oligarchs rose under President Yeltsin, Putin’s predecessor, during the privatization of the state firms that held Russia’s vast mineral wealth. The privatization is regarded as the biggest “asset grab” in history.
According to the Bloomberg Billionaires Index, Russian billionaires have lost more than $80 billion in combined worth since the sanctions were imposed. Over 16 Russian billionaires have been slammed with sanctions, including travel bans and the freezing of offshore assets including yachts, private aircraft, and foreign bank accounts. The hope is that it is the oligarchs who could influence Putin to end the war on Ukraine as the Russian President, who has been in power since 2000, is inured from the opinion of citizens.
Not only the United Kingdom, the United States, and the European Union have sanctioned Russian billionaires; Switzerland, a traditionally neutral country that is frequently used as a haven for offshore wealth by these billionaires, has also joined the European Union in freezing the assets of those sanctioned in support of Ukraine. Monaco, another famous destination for Russian billionaires, and Canada have imposed restrictions on some of the billionaires.
