One year after invasion, Russian billionaires flee sanctions – 02/22/2023 – Market

After Russia’s invasion of Ukraine a year ago, Western countries rolled out sanctions against Russian billionaires close to President Vladimir Putin, freezing bank accounts and seizing property or luxury yachts.

However, many Russian billionaires try to circumvent, often fight, sanctions in hopes of improving their situation.

Authorities froze around 18.4 billion pounds (R$ 114.7 billion) of Russian assets in the UK and 17 billion euros (R$ 94.2 billion) in the EU (European Union).

legal offenses

These elite businessmen generally remain low-key, but some have launched a legal counter-offensive, while others have sought refuge in sanctions-free countries.

Russian banker Petr Aven insists he has “no financial or political relationship” with the Kremlin.

He is currently asking the British government to grant him £60,000 (R$374,300) a month from his frozen accounts to meet his family’s needs.

Aven, who co-founded private equity firm LetterOne with colleagues Mikhail Fridman and German Khan, is based in Latvia, where he has a nationality.

Many billionaires, such as Aven, Fridman, Khan, as well as Roman Abramovich and Alisher Usmanov, use their fortunes to take legal action against UK and EU sanctions.

Aluminum tycoon Oleg Deripaska, whose personal fortune plummeted to $1.7 billion last year according to Forbes magazine, is suing Washington over US sanctions.

A Deripaska hotel in Russia has been confiscated, according to press reports, after it described Russia’s invasion of Ukraine as a “war”.

The Kremlin says it’s a “special operation”.

chelsea

Roman Abramovich, perhaps the best-known tycoon, initially sought to mediate peace talks between Moscow and Kiev and promote good relations with the West, but he was still forced to sell his English football club, Chelsea.

With Israeli citizenship, he has been to Israel, the United Arab Emirates and Turkey several times, countries that have not adopted sanctions against the Russian elite.

Dubai has also opened its arms to him and even has a district called “Little Moscow”.

The tycoon lost half of his fortune, which would have fallen to US$ 7 billion (about R$ 36.1 billion), according to the media.

Fridman, born in Ukraine, has chosen to remain in London, his lawyer confirmed to AFP. According to the press, he was seen drinking champagne in a theater.

“Better Times”

These elite businessmen still have substantial amounts of cash.

“It’s hard to say how much of their heritage has suffered because we don’t know how much they had,” Jodi Vittori, a professor at Georgetown University, told AFP.

Freezing properties in London is not easy, as assets are often held in tax havens through anonymous trusts, shell companies or family members.

Around 52,000 British properties are owned by unknown investors, some close to the Kremlin, UK Transparency International said in a recent report.

“There still seem to be many ways around sanctions,” concluded Duncan Hames, head of policy at the anti-corruption organization.

“We assume they are waiting for better days.”

important sanctions

The billionaires may not have direct influence over the Kremlin and how it conducts the Ukraine War, but their indirect role is to provide vital aid, Vittori said.

This includes the supply of mercenaries, according to the professor, who cited the president of the Wagner Group, Yevgeny Prigozhin, as an example.

“The importance [dos magnatas] it’s not just having influence, but doing certain things for the Russian government: supplying mercenaries, essential minerals for the war machine [e] launder money for the government or for Putin himself,” he added.

“So sanctioning them is still important,” said Vittori, an academic specializing in international politics and security.