Western countries punish Russian oligarchs for war – 02/28/2022

Paris, February 28, 2022 (AFP) – Western countries’ decision to widen sanctions against Russia against oligarchs and their assets around the world is a significant step forward in making Moscow pay for the invasion of Ukraine, say activists in the international fight against corruption.

The United States, European Commission, Germany, France, Italy, Britain and Canada announced Saturday in a joint statement the formation of a “transatlantic working group next week”.

The group will have a mission to “ensure the effective implementation of financial sanctions” imposed by the West and “to identify and freeze the assets of designated persons and institutions”.

Western powers also want to work with other countries to “detect and stop the circulation of illicit goods and prevent individuals from hiding their assets in the world”.

The founder of British investment fund Hermitage Capital, Bill Browder, who advocates implementing legislation to punish individuals accused of violating human rights, approved the initiative.

“The most direct way to punish (Russian President) Vladimir Putin for starting this war is to impose sanctions on the oligarchs,” he told AFP, warning of legal remedies against imposing such measures.

Hermitage Capital is a special fund in Russia, founded in 1996, based in a tax haven, which grew with the privatization of Russian companies during the presidency of Boris Yetlsin, when the Russian oligarchs emerged.

For Duncan Hames, from the UK anti-corruption NGO Transparency International’s department, “this joint statement is the first to appear to combine a coherent understanding of the problem and the ability to group a respectable large number of economies”.

– Tax haven – Even before the release of the statement, one of Russia’s most famous oligarchs, Roman Abramovitch, announced that he would hand over control of the English football club Chelsea to the club’s administrators, which he bought in 2003.

Ukrainian-born Russian billionaire Mikhail Fridman denounced the war in Ukraine, in a letter sent to employees of his LetterOne fund, as a “tragedy” that, in his words, would “destroy” both countries while avoiding taking political positions.

Bill Browder, however, believes that the atmosphere of Russia’s economic elite will have little effect on Vladimir Putin. “He’s not afraid of the oligarchy or his people, he’s running a dictatorship,” he said.

Among their arsenal of actions against the oligarchs, Western countries also intend to “limit the granting of the ‘golden passport’, which allows Russian billionaires close to the regime to acquire citizenship of one of the countries and gain access to its financial system.

The identification of the assets of persons designated by the sanctions could run counter to the “widespread use of extraterritorial tax havens to hide ownership of assets, including in places like London”, Hames warned.

However, Browder considers that “if a bank owns money belonging to an oligarch, it knows (…) because the oligarch must disclose it” and is therefore legally open to continuing to transact on his behalf.

Ultimately, according to Hames, the ability of oligarchs to evade state oversight of their hidden assets “will depend on the level of involvement of their facilitators, their financial service providers, to enable them to evade sanctions.”


Jackson Wintringham

"Coffee aficionado nerd. Troublemaker. General communicator. Gamer. Analyst. Creator. Total brew ninja."

Leave a Reply

Your email address will not be published. Required fields are marked *