A significant part of the economic sanctions deployed by the West in response to the Russian invasion of Ukraine are directed at a select group of influential billionaires in the country. They are known as Russian oligarchsa elite of wealthy businessmen close to Putin’s orbit.
The United States, the European Union and the United Kingdom have launched a whole package of sanctions against Russian oligarchs, millionaires and top managers related to the Kremlin to try to put pressure on Putin to back down from the invasion of Ukraine.
The penalties imposed entail the freezing of the assets of these entrepreneursthat they cannot sell or profit from them, as well as the travel ban.
Among other prominent tycoons, the measures affect Roman Abramovich, owner of Chelsea FC; Alisher Usmanov, the third richest man in Russia and an Arsenal shareholder; Igor Sechin, confidant and personal friend of Putin since the 1990s, or Alexey Miller, president of the state gas company Gazprom.
What does the term ‘oligarchs’ mean?
The term oligarch comes from oligarchy, a system of government in which power is in the hands of a few members of the privileged social class. Therefore, the oligarchs are not only super-millionaires, but personalities that integrate a small group with power and influence in a certain social, economic and political sector.
Their existence is related to countries with autocratic tendencies, since their power exceeds the economic and they exercise a direct political influence in all spheres of the state.
The first Russian oligarchs were forged After the fall of the Berlin Wall and the disintegration of the USSR. During the 1990s, several men, taking advantage of their political connections, made their fortunes by privatizing state-owned companies. These capitals were used to create business empires linked to key sectors such as industry, energy, communications and finance.
What power do they have?
These early oligarchs consolidated their power and influence during the reign of Boris Yeltsinwho was re-elected in 1996 thanks to his economic and political support.
However, with the rise of Putin to power in 2000the situation of the Russian oligarchs changed: those who joined him were able to retain their power and influence, while those who opposed had their property confiscated and thrown in prison.
An exemplary case is that of Mikhail Khodorkovskywho went from being the richest man in Russia in 2004 to living in exile in London since 2015 after losing all his fortune and going to jail.
In this new context, the oligarchs have lost much of their power, relying on Putin to maintain their status and expand their fortunes. However, this dependency relationship is partly mutual, since Putin also needs the oligarchs to maintain the balance of power in Russia with the other two large groups of influence: the army and the security services.
Who are closest to Putin?
In accordance with the economic sanctions against Russia, the Council of Europe of the EU has published a regulation that includes the different restrictive measures and the oligarchs, millionaires and main managers that are the object of them. Among the personalities included, the following should be highlighted:
Igor Sechin
Sechin is one of Putin’s closest advisers, as well as his personal friend. directs Rosneft, the Russian state oil company and one of the world’s largest crude oil producers. According to the EU, “he is among the people in Putin’s circle who receive economic benefits and important assignments in exchange for subordination and loyalty. The president has entrusted him with important and difficult tasks, and has rewarded him with the leadership of Rosneft and great wealth & rdquor ;,
Alisher Usmanov
He is the owner of a huge business and financial empire with assets as relevant as the Arsenalone of the most important teams in the English Premier, or the steel giant Metalloinvest. In addition, they have interests in in companies in the iron, minerals and steel sectors, the media and the internet. He is considered one of the Kremlin’s businessmen-officials, responsible for the movement of financial flows and a close associate of Putin.
Nikolai Tokarev
Tokarev is the CEO of transneft, producer of oil and gas, and one of the most important companies in Russia. He is a close associate and insider of Putin since serving with him in the KGB in the 1980s. “Tokarev is one of the oligarchs of the Russian state who assumed control of a large amount of state assets in the 2000s, while Putin was consolidating his power, and working closely with the Russian state,” the EU document explains.
Roman Abramovich
One of the most internationally known Russian oligarchs for being the owner of the Chelsea F.C.English Premier team, as well as the Zenit Saint Petersburg Russian. Most of his fortune comes from his oil business, since in 1990 he took control of Sibneft, which he later sold in 2005 pocketing almost 12,000 million euros. He is currently focused on the metallurgical sector.
Alexei Mordashev
Morsashov is, according to Forbes, the richest man in Russiawith a fortune valued at 25.7 billion euros in 2021. He is the majority shareholder of the steel company severstal and also owns shares in the private gold miner NordGold.
the tycoon has been extraordinarily critical of the invasion of Ukraine -“It is terrible that Ukrainians and Russians die, that people suffer difficulties and the economy is collapsing”- he declared, although that has not helped him avoid being sanctioned by the EU.
And it is that Severgorupa company of which he is president, is also a shareholder of Rossiya Bank, considered the personal bank of senior officials of the Russian Federation.
Mikhail Fridman
The owner of the supermarkets DAY and AlfaBank, c.It has assets valued at 13,500 million. He has also been included in the list of 26 Russian personalities sanctioned by the European authorities. “He has cultivated close ties with the Vladimir Putin administration, and is known as one of Russia’s top financiers and facilitator of Putin’s inner circle.
He has acquired state property through contacts in the government. Putin’s eldest daughter, Maria, led a charity project called Alfa-Endo, financed by Alfa Bank & rdquor ;, says the EU.
petr aven
“He is one of the oligarchs closest to Vladimir Putin. It is a major shareholder in the Alfa Group, of which one of the major Russian banks, Alfa Bank, is a part.
He is one of approximately fifty wealthy Russians who regularly meet with Vladimir Putin in the Kremlin & rdquor ;, states the EU publication. It should be noted that, together with Mikhail Fridmanis one of the oligarchs who “have contributed to the Kremlin’s attempts to lift the sanctions imposed by the West to curb Russia’s aggressive policy towards Ukraine.”
What effect can sanctions have?
The measures implemented by the United States, the European Union and the United Kingdom pursue two main objectives: on the one hand, to deal a blow to the Russian economy and, on the other, putting pressure on the Russian oligarchs to turn against Putin and try to convince him to stop the invasion of Ukraine.
The first of them is reaping relatively high success, since Russia’s economy is experiencing a severe setback in multiple sectors. The ruble has been devalued by more than one 30% from the start of the warthe large multinationals are undergoing a mass exodus and Russia is increasingly isolated.
However, the second target seems to be having a much more limited effect: Although the great oligarchs are showing discomfort and dissatisfaction with the sanctions, most experts agree that it is unlikely who have the ability to change Putin’s mind. At least in the short term.