Noose tightens around Russian oligarchs close to Putin

Oligarchs close to President Vladimir Putin are finally facing the full force of Western sanctions over Russia’s invasion of Ukraine — from seizure of shiny yachts to sealing of dazzling villas and freezing of loaded bank accounts. 

French authorities have managed to intercept several vessels, including the yacht Amore Vero, believed to belong to Igor Sechin, the head of the Russian oil company Rosneft and a close associate of Putin.

Another billionaire who has found himself in the sanctions trap, Mikhail Fridman, lost his stake and assets in the Luxembourg-based company LetterOne Holdings. He had to announce his withdrawal from Alfa Bank, together with co-owner Peter Aven, in order to take the heat off the company. 

Despite the accomplished fact of imposing restrictions, both tycoons called themselves "long-term investors committed to European companies" and promised to challenge the Western restrictions in courts.

 Meanwhile, the Biden administration announced the creation of a special structure to fight corrupt Russian oligarchs. Justice Secretary Merrick Garland informed that his agency is focused on confiscating assets of individuals and companies. 

According to Garland, a special group named KleptoCapture will lead the proxy war against the billionaires. The group will include investigators from the US Justice Department and other law enforcement agencies, as well as representatives of the expert community.

 Multiple reports indicated that investigators were hard at work to identify the foreign assets of the target group, who are known to have hidden ownership of their bank accounts and properties behind several layers of faceless companies formed in offshore tax havens. Their owners may be family members or friends, rather than the oligarchs themselves. However, when the restrictions concern relatives as well, Western officials are hopeful of partially eliminating this loophole.

 ‘Don't settle for anything’

 Israel, which once made concessions for those who asked for aid by right of origin, refused the other day to "protect" Russian tycoons. The order came to light thanks to Axios sources, who uncovered Foreign Minister Yair Lapid's statement at a government meeting. 

"You have to be very careful because these are the guys who have ties and they may call you on the phone and ask you for something. Don't agree to anything," he said, referring to tycoons from Russia.

Lapid's remarks suggest that his government now fears the damage to its international reputation for any gesture of loyalty to Moscow, which, as officials in Israel like to put it, is a "neighbour" in the Syrian theatre of operations. 

Moreover, in this once safe haven for Russian oligarchs of Jewish origin, they seem to be calculating a scenario in which the list of restrictive measures against figures close to the Kremlin will be expanded.

Lapid's remarks came after some influential people in Israel asked US Ambassador Tom Nides not to impose sanctions on the billionaire Roman Abramovich. Among the signatories are the head of the Yad Vashem Holocaust Memorial, Danny Dayan, leading Ashkenazi rabbi David Lau, and Professor Yitzhak Kraiss, director of the Sheba Medical Center. Abramovich himself seems to have taken the situation in very quickly and went to Belarus to negotiate between Russia and Ukraine as an intermediary.

Economic devastation

In a conversation with TRT Russian, political analyst and economist Anders Aslund noted that the tightening of the noose mostly comes in terms of financial, technological and personal restrictive measures against the Kremlin. 

"So far, however, sanctions against the oligarchs have been very mild," the analyst acknowledged. “The oligarchs have too many friends and lawyers in the West. Now it looks like they will have nowhere to hide."

According to Aslund, the main slogan of the campaign is: "Take the palaces and yachts away from the oligarchs!" 

The main players here are Britain, France and the United States. The expert pointed out: “It seems to me that they have nowhere to hide, and their political friends no longer dare to defend them".

As Aslund explained, the pressure could be stopped if Russia suddenly withdrew from Ukraine. "If that doesn't happen, I think the public reaction of the West will be so harsh that no politician will dare to oppose them," the interlocutor suggested.  

For his part, former State Department sanctions policy coordinator Daniel Fried told TRT Russian that the US, Britain, and Europe will join forces to identify the assets of Russian oligarchs. "Putin's war against Ukraine has led to Russia's economic ruin and isolation," the analyst concluded. According to him, the only exception is China, on which Russia will become increasingly dependent from now on.

"Putin's kleptocratic entourage will be the target, although perhaps not all of the oligarchs. It's brutal, but Putin led Russia to this situation," Fried summarised.