War in Ukraine | The effects of sanctions on Russian oligarchs: “They will not bite the hand that feeds them”

The sanctions imposed against Russia by the European Union, the United States, the United Kingdom and other allies in response to the invasion of Ukraine punish directly into the Russian economy, but now they also go directed at the oligarchs: friends and members of the inner circle of President Vladimir Putin.

This people directly affect economic and monetary policy of Russia and are seen by Western governments as a key to influencing the Putin regime. Experts agree that it is difficult for the oligarchs to turn their backs on the president and stop him.

“Many of those oligarchs they owe their fortune to the Russian regime and it is very difficult to bite the hand that feeds you”, assures RTVE.es the professor of International Economics at the University of Nebrija, José Manuel Muñoz Puigcerver.

The influence of Russian oligarchs will not help stop the war

Many of the sanctions imposed by Western countries on Moscow directly affect Russian oligarchs: friends and members of President Putin’s inner circle who influence economic and monetary policy of the Russian Government. This raises the possibility that the sanctions will make some of Russia’s most influential figures are willing to stop the Russian president.

The Ukrainian journalist and observer Anna Korbut tells RTVE.es that sanctioning them “It is not the best card that can be played at the moment”. “It could have been 10 or 20 years ago, even in 2014, when the war began in Crimea and eastern Ukraine,” Korbut stresses, noting that “the West does well by going after the main sectors of the economy Russian”.

The professor of International Law and International Relations at the Comillas Pontifical University, José Ángel López, believes that the oligarchs “have no capacity, no vocation, no intention” to do any mediation work, “no matter how much they are being partially damaged.”

For his part, Muñoz Puigcerver assures RTVE.es that the Sanctions “will not help stop the war”. “The problem is that most of these oligarchs they depend much more to maintain their heritage on Putin than on the West”, emphasizes the professor, who emphasizes that “if they have to choose, they will not support the European Union or the United States, because the fact of stopping supporting Putin could mean that they lose even more”. “Many of those oligarchs they owe their fortune to the Russian regime and it is very difficult to bite the hand that feeds you“, Add.

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However, some of those oligarchs have already expressed opinions against the war in Ukraine. Billionaire Mikhail Fridman, one of Russia’s richest men who was born in western Ukraine, has pointed out that the war must stop as soon as possible and has rated it as a “tragedy” for both parties.

“This crisis will cost lives and will harm two nations that have been sisters for hundreds of years. While a solution seems far away, I can only join with those whose fervent wish is for the bloodshed to end,” she said in a letter. “My parents are Ukrainian citizens and live in Lviv, but I have also spent much of my life as a Russian citizen, building and growing businesses,” she explained.

Fridman’s call for peace has been joined by another Russian: Oleg Deripaska, a billionaire who made his fortune in the aluminum industry. “It is necessary to change the economic policy. We need to put an end to all this state capitalism,” he added.

His ties to the Russian president

Russia’s richest tycoons are seen by Western governments as a key to influence the Putin regime. A large part of the Russian oligarchs are directly linked to the Russian president and some of them even served alongside the president when he belonged to the Committee of State Security (KGB), where he came to occupy a high position.

“It must be taken into account that some of them are of your utmost confidence”, emphasizes Muñoz Puigcerver. “There are some very specific and very concrete ones that are precisely the ones that handle the entire energy-related sectorespecially in the Russian export sector”, he asserts.

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The United States Department of the Treasury assures that “elites close to Putin continue to take advantage of their proximity to the Russian president to plunder the Russian state, enrich themselves and elevate their relatives to some of the highest positions in the country at the expense of the Russian people.” “Russian sanctioned oligarchs and powerful elites have used members of his family to move assets and hide his immense wealth“, has added.

In this sense, López emphasizes that “there is a hard core of oligarchs who owe their fortunes to a great extent precisely to the Putin regime and its proximity to the Kremlin”. “In the 1990s, the entire privatization issue was tackled, which largely succeeded in enriching the first-generation oligarchs. The rest, when Putin was already prime minister and then president, yes they owe their fortune entirely to relations with Putin”, he details.

The sanctions that are going to be applied and what it may cost

The United States and its allies, including the United Kingdom, have responded to the Russian attack on Ukraine with sanctions against billionaires close to the Kremlin. The European Union has added Russian businessmen and oligarchs to its list of those sanctioned for the Russian attack on Ukraine. These measures include freeze assets and prohibit making funds available to those on the list sanctioned, who will not be able to transit or enter the community territory either.

“The sanctions are fundamentally of a financial nature, in the sense that they cannot dispose of funds that they have eventually located outside of RussiaLopez says.


The Nebrija University professor explains that “many of them are going to lose assets”. “Even before these sanctions, it was calculated that due to previous sanctions in the first two months of the year, they had lost approximately 33,000 million dollars in total”, details Muñoz Puigcerver.

These measures against the oligarchs are added to others such as the paralysis of transactions by the Central Bank of Russia or the exclusion of some Russian banks from the SWIFT system. “The mere fact that many of those oligarchs also operate with Russian banks makes they can’t move the money either and also have more difficulties in changing rubles into other currencies more stable”, explains Muñoz Puigcerver.

Who are they and what are their fortunes

Among the sanctioned oligarchs is the CEO of the state oil company Rosneft, Igor Sechin. He has worked with the Russian leader since the 1990s and is one of Putin’s closest adviserswhich is why he has been facing sanctions from Washington since 2014. Sechin is number 47 on the Forbes list.

The sanctions list also includes Nikolay Tokarev, CEO of Transneft, a major oil and gas company in Russia; and to Gennady Timchenko, founder and main shareholder of the Volga Group, specializing in investments in energy, transportation and infrastructure assets. Timchenko has a net worth of $17.7 billion and stands at number 78 on the Forbes list.

Also on the list is billionaire Alisher Usmanov, who has interests in companies in the steel, mineral and iron sectorsas well as of the mediaand is considered one of the Putin’s favorite oligarchs; and Ptr Aven, Alfa Group shareholder, one of the largest private investment groups in Russia.


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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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