After Russia’s invasion of Ukraine, the West freezes the assets of several oligarchs. While some of them secretly circumvent the sanctions, others use their wealth to take legal action against the sanctions.
Oligarchs with suspected Kremlin links saw the West freeze their accounts and seize property after Russia invaded Ukraine. Great Britain alone had assets worth the equivalent of almost 21 billion euros confiscated, in the EU authorities froze 17 billion euros.
The oligarchs are defending themselves against these sanctions – or they are circumventing them. Most try to stay under the radar of the authorities, to remain unnoticed. Others take expensive legal action against Western governments, while others seek refuge in countries without sanctions.
The Russian banker Petr Aven, for example, recently asked the British government to release part of his assets. His family needs the equivalent of around 68,000 euros a month to cover their everyday needs. He himself has “no financial or political ties” to the Kremlin. Aven, who founded the private equity firm Letterone with fellow oligarchs Mikhail Fridman and German Khan, now lives in Latvia.
He and many other sanctioned businessmen are now using their wealth to defend themselves legally against sanctions in the UK and EU. In addition to Aven and Fridman, the plaintiffs also include Roman Abramowitsch and Alisher Usmanov.
Aluminum billionaire Oleg Deripaska is also going to court, albeit against the US government in Washington. According to Forbes magazine, his fortune halved in the first year of the war and now amounts to the equivalent of 1.6 billion euros. But things also got tight for him in his native Russia: According to reports, the authorities there stormed a hotel that belongs to him. He had therefore described the war in Ukraine as such – which is a punishable offense in Russia.
The well-known oligarch Roman Abramovich also had to lose feathers last year, although he initially wanted to arrange peace talks between Kiev and Moscow and praised his good relations with the West: According to “Forbes”, his assets have also halved to around 6.6 billion euros. The billionaire had also owned the London football club Chelsea FC for almost 20 years, which was taken over by an investor group led by US businessman Todd Boehly.
Abramovich was last seen several times in Israel, of which he is a citizen. The United Arab Emirates and Turkey are also younger destinations for the super-rich. Neither state sanctions the Russian business elite – and thus develops an attractiveness: A district in Dubai is now called “Little Moscow”.
But despite the difficulties, the oligarchs still have large sums of money at their disposal. “It’s hard to say how much the oligarchs’ fortunes have suffered because we don’t know how much they ever owned,” says Jodi Vittori. He is Professor of Government Corruption and Illegal Funding at Georgetown University in the US.
The confiscation of oligarch property is also not an easy task for the authorities: constructs based on tax havens, anonymous funds, shell companies or relatives all too often obscure the true ownership of assets. According to a report by the anti-corruption organization Transparency International UK, it is not known exactly which investors own 52,000 properties in London. There are still “too many ways” for oligarchs to “evade” sanctions, concludes Duncan Hames, the organization’s political chief. “We suspect they are just keeping their feet still and waiting for better days.”
According to Vittori, the oligarchs have no direct influence on decisions in the Kremlin. Nevertheless, they play a role for Moscow because they provide important assistance. This includes, for example, providing mercenaries, as the businessman Yevgeny Prigozhin does with his notorious Wagner group. “The importance of oligarchs does not simply result from their influence, but from their ability to do certain things for the regime: i.e. provide mercenaries, procure important raw materials for the war economy or launder money for the regime or Putin himself,” says Vittori . “So sanctions are still important.”