22nd Mar 2018

Drums beat for EU sanctions on Russia oligarchs

  • US "list will be the first port of call" for Congress for future sanctions, activist Browder told EUobserver (Photo: thisisbossi)

US publication of a new list of the Russian elite has "started the drumbeat" for additional sanctions on both sides of the Atlantic.

The US treasury list of 210 names met with derision from some Russia experts, one of whom accused the White House of having sabotaged an earlier and more in-depth document.

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  • Gazprom boss Miller's inclusion on US list could cast chill on Nord Stream 2 (Photo: Nord Stream 2 / Axel Schmidt)

But it will still make prickly reading for those powerful or wealthy Russians who made the register and who were not already on US or EU blacklists over Russia's invasion of Ukraine or what the US treasury called other "malign activities".

It contains 114 top people in Russian leader Vladimir Putin's administration as he prepares for a fourth term in office after elections in March.

It includes prime minister Dmitry Medvedev, foreign minister Sergei Lavrov, and Kremlin spokesman Dmitry Peskov.

It lists the heads of Russian "parastatal" firms, such as Alexei Miller and Andrei Akimov, the CEOs of energy firm Gazprom and its financial offshoot Gazprombank, as well as German Gref and Andrey Kostin, the CEOs of two leading lenders Sberbank and VTB.

It also names 96 "oligarchs" who "according to public sources have an estimated net worth of $1 billion or more", such as aluminium baron Oleg Deripaska, UK-based investor Roman Abramovich, and cyber security tycoon Yevgeny Kaspersky.

It adds that there is a supplementary list of Russian names that remained classified, but which includes lower-rank or less wealthy people.

The public US document noted that inclusion on the list should "in no way be interpreted to impose sanctions" in of itself or to imply that people on it were guilty of "malign activity".

But according to a US source, "the next steps will be for members of Congress and outside groups to ask why this, that, or the other oligarch is not also on our sanctions list".

"This drumbeat will continue until most of the list has the asterisk denoting inclusion on treasury's SDN [Specially Designated Nationals And Blocked Persons List] register," the source told EUobserver.

The noise in Washington began within hours of the document's publication on Tuesday (30 January).

"It is clear that Russian aggression continues across Europe", two Democratic Party congressmen, Marcy Kaptur and Brian Fitzpatrick, said in a statement. "We … call on the administration to sanction the Russian oligarchs", they added.

EU list 'under review'

A Russia sanctions debate is also beginning, more quietly, in the EU.

The EU foreign service, which is in charge of proposing alternative names when the EU next reopens its blacklist in February, told EUobserver: "We take note of the report issued by the US treasury".

The EU spokesperson noted that the US document "states explicitly that it is not a sanctions list", but added: "That said, all of the EU's sanctions regimes remain under constant review".

A senior US diplomat, Kurt Volker, recently said in the EU capital that Europe should keep the treasury list in mind in "adding to the cost that Russia faces" for Ukraine..

Linas Linkevicius, the Lithuanian foreign minister, said US-type measures against Russian oligarchs were the most effective way of putting pressure on Putin.

The US list prompted Russia activists in Europe add their input.

Mikhail Khodorkovsky, a Russian former oligarch who lives in exile in the UK, told EUobserver: "I'm convinced that the issue of defining the specific boundaries of the Kremlin criminal group [via the US list] is extremely important".

Khodorkovsky, who now runs an anti-Putin movement, said that being included in a fresh US and EU sanctions review could prompt some Putin loyalists to rethink their position.

"People should realise their personal responsibility for what is happening [in Russia] and decide on which side of the barricade they are on," Khodorkovsky said.

Nord Stream chill

Bill Browder, a British human rights activist, said: "Being on the treasury list is a huge red flag for future US sanctions. The next time Putin does something outrageous like bombing civilians in Syria or hacking elections, there will be huge political pressure in the US to sanction someone and this list will be the first port of call."

Browder said the shadow of potential US sanctions could cast a chill over the business activities in Europe of people like Miller, whose firm, Gazprom, is building a gas pipeline to Germany called Nord Stream 2.

"For Western businesses, it creates a dramatic headache to have anything to do with sanctioned individuals and those westerners can see their money tied up for years," Browder said.

"There will be real problems for Nord Stream 2 because of Miller's inclusion on the list. That project has huge financing requirements and banks want to avoid any exposure to sanctions," Browder added.

He said targeting Russian oligarchs puts pressure directly on the Russian president because "many on the list are holding large amounts of money for Putin as trustees".

Andras Simonyi, a Hungarian scholar of EU-US relations at the John Hopkins University in Washington, said: "If Miller ended up on the list it means that he is no longer part of the world's gas-producing elite."

Simonyi, who used to be Hungary's ambassador to the US, told EUobserver: "The Europeans should be ashamed of themselves the way they let Russia's robber-barons live freely and securely the life of billionIres in London, Vienna, and elsewhere."

Browder said the US treasury made some glaring omissions, however.

Copy/paste omissions

"The most obvious name missing from the list is Putin's best friend from childhood, the famous cellist Sergei Roldugin," Browder said.

The musician, who, according to Browder, holds assets of $2 billion, was shown in the so-called Panama Papers leak as having taken money that was stolen from the Russian taxpayer and laundered via EU banks.

Other critics of the US treasury spoke out in more damning terms.

Anders Aslund, a Russia expert at the Atlantic Council, a think tank in Washington, who consulted the treasury on whom to include, said that an earlier draft of the document had named the real, but hidden network of Putin's cronies.

He said a White House official had quashed that document in favour of the current oligarch list, which the US treasury copy/pasted from a who's who published by Forbes magazine.

"By naming the whole Russian government, presidential administration, and all Russian billionaires, the Trump administration has undermined and ridiculed the US sanctions on Russia," Aslund said on Twitter, referring to the Russia-friendly US president.

Aslund, a Swedish economist, added in remarks to EUobserver that the "absurd" nature of the US document made it less likely to be used as a reference for future EU decisions.

"The White House has proven that it's not serious about Russian sanctions in quite an absurd fashion. Who can follow somebody who is not serious?," he said.


Will EU join new US sanctions on Putin elite?

'Oligarch clause' in new US sanctions on Russia to start life on 29 January - but to what extent will the EU and US coordinate a blacklist of Putin's cronies?

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Fighting in Ukraine escalated to "hellish" levels not seen since February amid warnings of a humanitarian catastrophe in the run-up to Christmas.

EU summit takes hard look at Russia

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Four years on – but we will not forget illegally-occupied Crimea

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