WHEN THE OLIGARCHS SAIL AWAY

IBI WORLD RUSSIA – 31ST OF JANUARY 2023

The sanctions imposed on Russia are hardly having any visible effect on Putin's
belligerent decisions, and the war is costing tens of billions of euros. In part,
these are cynical investments, because Europe and the United States, if (as we
all hope) Ukraine wins, will get significant slices of the reconstruction contracts.
The fact is that as the invasion continues, its costs continue to rise, and the
West is seriously considering recovering some of the costs by seizing the assets
of Russians who have been hiding from the Russian tax authorities for years
and enjoying the benefits of disproportionate wealth.
Putin knew this would happen. A few hours after the invasion began, on 24
February 2022, he summoned 37 of the country's most important business
executives to the Kremlin, including at least 12 billionaires. Two of them,
Mikhail Gutseriev and Suleiman Kerimov, are already the subject of US and EU
sanctions. The purpose of the meeting is to inform them of the attack, with
Putin stating that he had no choice but to invade and that he was aware that
Russia was likely to be hit by new sanctions. After speaking, Putin leaves the
room without allowing the businessmen to comment1, leaving the oligarchs
frustrated and alone.

1
https://www.forbes.com/sites/giacomotognini/2022/03/01/tracker-in-depth-look-at-45-russian-billionaires-
hit-by-sanctions/
Since the day of the invasion, Europe has been hunting down Putin supporters,
trying to prevent their economic support for the Kremlin. Today, a year later,
EU governments are working on a tenth sanctions package for the end of
February2. Who ends up on the Black List is something that is decided by
lawyers and former Treasury Department officials, who assess the weight of
the sanctions according to the political and economic influence of the
individuals, since some oligarchs 'are more important than others for political
reasons'3.
In the past year, 45 billionaires have come under judicial scrutiny. The EU
imposed travel bans, froze assets and went after yachts (61 luxury yachts
worldwide, worth at least $6.3 billion4), private jets and luxury homes located
in Europe - especially Switzerland, a traditionally neutral country often used as
a haven for offshore assets, which surprisingly announced the freezing of assets
of all individuals sanctioned by the EU5. No exceptions, not even for tycoons
residing in the Commonwealth: Bermuda, the British Virgin Islands, the Cayman
Islands and the Isle of Man (the tax havens where rich men around the world
like to hide their money), as even these jurisdictions have started to apply
sanctions6.
The billionaires disagree and are contesting the sanctions (as they successfully
did in 2014 after the annexation of Crimea7). Among the most famous are:
- Roman Abramovich8 with his $8.7 billion fortune had to sell Chelsea, losing a
lot of money, and today only owns shares in steel giant Evraz and nickel
producer, Norilsk Nickel9, the rest has been sold or headed to his children10;
Abramovich, of Jewish descent, also has Israeli11, Portuguese12 and Lithuanian
citizenship13. In May 2022 he tried to ask for the sanctions to be lifted and for
damages of one million euros to be paid to the charitable foundation set up
after the sale of Chelsea14;
2
https://www.borsaitaliana.it/borsa/notizie/radiocor/economia/dettaglio/ucraina-ue-sul-tavolo-decimo-
pacchetto-di-sanzioni-contro-russia-nRC_20012023_1753_443364207.html
3
https://forbes.it/2022/03/16/oligarchi-russi-perche-alcuni-non-sanzionati/
4
https://www.forbes.com/sites/giacomotognini/2022/03/01/biden-and-allies-are-coming-for-russian-
billionaires-yachts-forbes-tracked-down-61-heres-where-to-find-them/?sh=3d0c826f6120
5
https://it.euronews.com/2022/11/15/svizzera-sanzionato-partner-in-affari-degli-oligarchi-russi
6
https://www.forbes.com/sites/giacomotognini/2022/03/01/tracker-in-depth-look-at-45-russian-billionaires-
hit-by-sanctions/
7
https://www.ilpost.it/2022/06/07/oligarchi-causa-sanzioni/
8
https://www.rainews.it/articoli/2022/05/roman-abramovich-fa-causa-al-consiglio-ue-per-le-sanzioni-
a0785f8d-241e-47c6-8f70-66c2054535fb.html
9
https://www.forbes.com/profile/roman-abramovich/?sh=7da357d7134a
10
https://it.euronews.com/2023/01/06/abramovich-evasore-ha-dribblato-le-sanzioni-agli-oligarchi-russi-
intestando-beni-ai-figli
11
https://www.repubblica.it/esteri/2018/05/28/news/abramovich_cittadinanaza_israeliana-197592451/?
ref=RHRS-BH-I0-C6-P11-S1.6-T1
12
https://www.australianjewishnews.com/portugal-launches-investigation-into-magnates-jewishness-claim/
13
https://www.israelhayom.com/2021/12/23/abramovich-the-israeli-lithuanian-and-portuguese-jew/
14
https://www.liberoquotidiano.it/news/europa/32441190/roman-abramovich-sanzioni-illegittime-cavillo-
rovina-unione-europea.html
To identify their properties, the social media of the relatives and girlfriends of the oligarchs are analysed 15

- Alisher Usmanov, the Uzbek-Russian owner of the USM Group and the steel
giant Metalloinvest, as well as Dilbar, the world's largest yacht (ownership of
which he transferred to his sister Gulbakhor Ismailova16), valued at USD 600
million and under seizure in Hamburg on the orders of the Uzbek authorities 17,
who have asked for the sanctions against him to be lifted in April 202218;
- Alexey Mordashov, owner of the controlling stake in metallurgical giant
Severstal19, who is trying to 'unfreeze' its assets by transferring ownership to a
trust and an investment fund20. In May he challenged before an EU court the
decision to impose sanctions against him - the same attempt made by Mikhail
Fridman (founder and majority shareholder of Alfa Group) and Pyotr Aven
(friend of Vladimir Putin and shareholder of Alfa Group)21)22.
The dispute in court could take years to resolve. So, some oligarchs are in a
hurry and are trying to resolve the situation in their own way. Some have
converted their yachts into houseboats and registered them in 'friendly'
jurisdictions such as Malaysia, Sierra Leone or Palau23. Others transfer the
properties to a relative or close associate, although this has so far not
prevented those assets from being listed as seized 24.
Dmitriy Mazepin, the owner of one of the world's largest suppliers of mineral
fertilisers (Uralchem, on which we have already written25), already furious that
Formula One has excluded his son from the drivers' race, has now worsened his
15
https://tg24.sky.it/mondo/2022/03/31/oligarchi-russi-sanzioni-foto-social
16
https://www.forbes.com/sites/giacomotognini/2022/03/01/biden-and-allies-are-coming-for-russian-
billionaires-yachts-forbes-tracked-down-61-heres-where-to-find-them/?sh=3d0c826f6120
17
https://www.ilfoglio.it/esteri/2022/11/17/news/chi-e-l-oligarca-che-l-uzbekistan-chiede-all-ue-di-graziare-
4668294/
18
https://www.forbes.ru/milliardery/464733-usmanov-resil-osporit-sankcii-es-v-sude
19
https://www.rbc.ru/politics/28/02/2022/621d1dac9a7947a3462e9e52
20
https://www.forbes.ru/milliardery/475313-wsj-uznal-o-poiske-mordasovym-sposoba-smagcit-sankcii-protiv-
ego-biznesa
21
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L:2022:059:FULL&from=EN
22
https://www.forbes.ru/milliardery/465245-mordasov-osporil-v-sude-es-resenie-o-sankciah-protiv-nego
23
https://forbes.it/2022/10/07/oligarchi-russi-provano-allentare-sanzioni-yacht/
24
https://forbes.it/2022/03/11/oligarchi-russi-guida-case-miliardari-sanzionati/
situation by moving, with the help of intermediaries, two of his yachts,
confiscated on the coast of Sardinia, thus ending up in the sights of the Italian
authorities: Mazepin's properties in Italy have been definitively confiscated and
he is facing a 500,000 euro fine to be paid to the municipality of Olbia 26.
Meanwhile, in Ukraine, people continue to die, on both sides. The Russian
economy proves to have been well prepared, the army less so. Putin is
probably making the same mistakes as Adolf Hitler, and it is to be feared that
he will have the same perseverance: if he realises, he has lost, he will drag the
whole world into catastrophe.

25
https://ibiworld.eu/2021/11/14/dmitrij-mazepin-il-primo-oligarca-di-londongrad/ ;
https://ibiworld.eu/2022/02/02/i-disonorevoli-cavalieri-di-enemalta/
26
https://www.moscowtimes.ru/2023/01/22/rossiiskogo-oligarha-obyavili-v-rozisk-v-italii-za-ugon-popavshih-
pod-sanktsii-yaht-a31505 ; https://internationalwealth.info/news-of-the-offshore/italija-razyskivaet-oligarha-
mazepina-za-sokrytie-aktivov-podlezhashhih-konfiskacii/