Why have half of Russia’s 20 richest people not been punished?

According to Bloomberg, half of Russia’s 20 richest people are still unpunished because of the war in Ukraine. A group of the country’s super-rich, powerful billionaires remain free to operate around the world without being constrained by bans.

Collectively, Russian oligarchs with at least $200 billion in assets (before the war started) were affected by the sanctions.

In an effort to isolate Russia from international finance and put pressure on President Vladimir Putin, Britain has sanctioned 10 of the country’s 20 richest billionaires and the European Union (EU) has sanctioned 9 billionaires. Meanwhile, the US has sanctioned 4 people. However, only 3 tycoons appear on all 3 lists, 4 of the 5 richest men in Russia are not punished anywhere.

The richest sanctioned Russian billionaire on the list is Alexey Mordashov, a controlling shareholder of Severstal PJSC, Russia’s fourth-largest steel producer. He had his assets frozen by the EU on February 28 and was put on a sanctions list by the UK two weeks later.

Energy billionaire Leonid Mikhelson, steel tycoon Vladimir Lisin and Vagit Alekperov, chairman of oil giant Lukoil PJSC, are among other wealthy Russians who have not yet been sanctioned.

Bloomberg Tracking the list of Russian oligarchs sanctioned remains difficult, said Washington, Brussels and London, which introduced the penalties in a series of unlinked announcements. Australia, Canada and Japan impose their own restrictions.

Sanctions experts say the decision not to censor some of Russia’s richest billionaires has something to do with their significant stakes in giant energy, metals and fertilizer companies.

“There are reasons to restrict certain tycoons and there are reasons,” said John Smith, former head of the Treasury Department’s sanctions unit, the Office of Foreign Assets Control (OFAC). so as not to punish some others. Maybe it’s because they don’t have close ties to the Kremlin or it’s too difficult to sanction them in the first place, and governments like to plan before they decide.”

The US has learned from 2018 when it punished billionaire Oleg Deripaska, who controls United Co. Rusal International PJSC, the world’s largest aluminum company outside of China. That sent global prices soaring, only to stabilize after Deripaska agreed to relinquish control of Rusal in 2019.

How have sanctions affected the Russian oligarchs?

Some Russians were targeted for having clear connections to state-owned companies, regardless of their net worth. These include Igor Shuvalov, a former Russian deputy prime minister and current chairman of the state-owned bank VEB, and Sergey Ivanov, CEO of state-controlled diamond company Alrosa PJSC and a board member at Gazprombank.

Unprecedented sanctions are taking place across continents. Rich Russians are rushing to move their assets as authorities in Italy, France, Spain and elsewhere seize yachts and private jets.

Roman Abramovich, the largest shareholder of Russia’s second-largest steel producer Evraz Plc, is selling his football club Chelsea after being sanctioned by the UK and EU.

Alisher Usmanov, who owns 49% of USM, which controls steel and iron ore producer Metalloinvest, has been sanctioned by the US, UK and EU. A spokesman said he has turned most of his real estate and other assets into trusts of which he is no longer a beneficiary.

There are many differences in the imposition of sanctions on the Russian oligarchs of the US, UK and EU. Photo: Bloomberg

A month after the war broke out, Russia is now the most sanctioned country in the world. Freezing central bank reserves and driving some banks out of the international payment system caused the ruble to depreciate and Russia was on the verge of default.

However, the analysis of Bloomberg A review of thousands of sanctions records shows that there are striking differences between the penalties imposed by the US, UK and EU. The US has frozen the assets of 852 people, the EU 775 and the UK 982. But many of those sanctions do not overlap.

Why are some billionaires not punished?

Many of the unpunished billionaires are active in key global commodity sectors and own significant stakes in major companies supplying Western nations.

John Smith said: “The main goal of sanctions is that we hurt the target of punishment rather than hurting ourselves. When you talk about gas, Europe still needs Russia. The United States and its allies will be looking very carefully to see what products from Russia might be nearly essential to us and third country companies, and seek to avoid those effects.”

Potanin, who built his fortune in the 1990s, is one of Russia’s wealthiest oligarchs and remains unpunished. He played hockey with Putin and helped the Kremlin organize the Sochi Olympics in 2014. After the war broke out, the billionaire surprised many by criticizing plans to seize companies’ assets. leave Russia.

Potanin owns a 36% stake in MMC Norilsk Nickel PJSC, making him the largest shareholder in a company that accounts for about 10% of refined nickel and 40% of global palladium production – crucial for semiconductor manufacturing, which was lacking before the war.

Mikhelson, Russia’s second-richest person, was also not sanctioned, although he has extensive business ties to Gennady Timchenko, a billionaire close to Putin and one of the first to be sanctioned by the United States in 2016. 2014. Mikhelson owns about a quarter of Novatek PJSC, the largest non-state gas producer in Russia and a major supplier to Europe, while Timchenko owns 23.5%.

According to Linh Lam