SOCIETY
Why oligarchs can’t shake sanctions
March 17, 2023
Tatyana Rybakova
Journalist and writer
Tatyana Rybakova writes about the rationale behind the Western sanctions against Russian oligarchs and explains how Russian business practices are working against the people who used them to become business leaders in Russia.
The original text in Russian was published in Republic and republished here with their permission.
Oleg Tinkov founded Tinkoff Bank in 2006. The Russian entrepreneur is under Western sanctions despite his public opposition to the war. Source: Wiki Commons
The sanctions on Russian oligarchs seem to many of them to be unfair and at least ineffective. Indeed, is it fair to sanction, for example, Oleg Tinkov, who has openly opposed the war, paid for that by having his bank taken away, and is fighting cancer – which after all is not cheap? Or, for example, isn’t it better to give Oleg Deripaska – who, though in Russia, is criticizing, albeit cautiously, the war – a so-called “algorithm” for being carved out of sanctions, in exchange for certain actions, like dividing the elites? Or, say, is it fair that the Russian oligarch Vladimir Lisin, whose only saving grace is that he owns two enterprises in Belgium and Belgian authorities do not want to have the 1,200 workers laid off, has not been sanctioned?
Expanding our focus, we can say that sanctions against ordinary citizens in the form of visa and asylum denials, even though they did not want to take up arms and kill Ukrainians, are even less fair and effective. Won’t Putin’s support only rise from this? Is there really no one who is now at the front who would have liked to run away but could not?
What is the idea behind Western sanctions against Russian oligarchs?
Many people ask these questions but do not want to hear the clear message from the Western side: we sanctioned the oligarchs not out of considerations of justice and not so they would come over to the ‘good’ side, but rather to prevent the Kremlin from using their money and connections in the West; we are turning away citizens fleeing Putin, if only because we are not ready to endure the costs of a flood of Russian refugees, with the inevitable infiltration of Kremlin agents and provocateurs along with them.
Note the difference in mindset:
Expanding our focus, we can say that sanctions against ordinary citizens in the form of visa and asylum denials, even though they did not want to take up arms and kill Ukrainians, are even less fair and effective. Won’t Putin’s support only rise from this? Is there really no one who is now at the front who would have liked to run away but could not?
What is the idea behind Western sanctions against Russian oligarchs?
Many people ask these questions but do not want to hear the clear message from the Western side: we sanctioned the oligarchs not out of considerations of justice and not so they would come over to the ‘good’ side, but rather to prevent the Kremlin from using their money and connections in the West; we are turning away citizens fleeing Putin, if only because we are not ready to endure the costs of a flood of Russian refugees, with the inevitable infiltration of Kremlin agents and provocateurs along with them.
Note the difference in mindset:
"The Russian public demands what it wants others to do, while the Western public acts based on its own capabilities and interests."
This difference is fundamental and universal.
In the West, citizens are sure that they can and should protect their interests themselves, while in Russia it is believed that the interests of citizens must be protected by someone else – if not by their own state, then a foreign one.
And when foreigners prefer to worry about themselves, resentment arises, which now permeates literally the entire opposition-minded stratum. Alas, the line of The Internationale that “no one will grant us deliverance” has been forgotten – apparently, they were never taken seriously. Yet that is exactly how things are: no one will grant deliverance, and no one has to. No one has to act either for justice, as we understand it, or for rational reasons – again, as we understand it.
The habit of relying on others to pull your chestnuts out of the fire underlies the rest of the practices that now prevent Russian oligarchs from shaking sanctions.
Backroom dealings
Firstly, it is disunity and the desire to “resolve issues” quietly. The owners of Alfa Group clearly did not want the letter signed by Russian opposition figures who vouched for them to be published. To be sure, the rest are fighting for sanctions to be lifted on their own and in their own way, with, no doubt, their own negotiations behind closed doors. Now, after the publication of the letter, everyone – not only Mikhail Fridman, Pyotr Aven and German Khan – has worse chances of shaking sanctions. What if the letter were not a petition for an exception for persons whose reputations, frankly speaking, are not spotless – and not only in Russia, where people are well aware of Alfa’s tough business practices, but also in the West, where they have not forgotten the scandalous squeezing out of the British partner from TNK-BP? What if the letter had called for explicit criteria to be developed for sanctions to be lifted in principle, perhaps with the proposal of criteria arrived at through a transparent, broad discussion?
Such backroom dealings of Russian oligarchs, as they ask for help from Western lobbyists or Russian oppositionists, only serve to convince Western politicians that they have done everything right – you should keep your distance from those Russians, they are all linked through murky schemes, and they even suck in our people. It is in Russia where going to the right offices and asking “respected people” is the best way to get what you want. In the West, this, of course, happens too, but they do not like it. It is much more effective to create public pressure.
To get something, you need to offer something
Second, as far as I understand, all sanctioned persons want something done for them: sanctions to be lifted, allowed expenses boosted so there is enough for a cleaner. But it doesn’t work like that: in the West, it is honest deals, not the humblest requests “upwards,” that are welcomed. To get something, you need to offer something interesting to the other side.
In the West, citizens are sure that they can and should protect their interests themselves, while in Russia it is believed that the interests of citizens must be protected by someone else – if not by their own state, then a foreign one.
And when foreigners prefer to worry about themselves, resentment arises, which now permeates literally the entire opposition-minded stratum. Alas, the line of The Internationale that “no one will grant us deliverance” has been forgotten – apparently, they were never taken seriously. Yet that is exactly how things are: no one will grant deliverance, and no one has to. No one has to act either for justice, as we understand it, or for rational reasons – again, as we understand it.
The habit of relying on others to pull your chestnuts out of the fire underlies the rest of the practices that now prevent Russian oligarchs from shaking sanctions.
Backroom dealings
Firstly, it is disunity and the desire to “resolve issues” quietly. The owners of Alfa Group clearly did not want the letter signed by Russian opposition figures who vouched for them to be published. To be sure, the rest are fighting for sanctions to be lifted on their own and in their own way, with, no doubt, their own negotiations behind closed doors. Now, after the publication of the letter, everyone – not only Mikhail Fridman, Pyotr Aven and German Khan – has worse chances of shaking sanctions. What if the letter were not a petition for an exception for persons whose reputations, frankly speaking, are not spotless – and not only in Russia, where people are well aware of Alfa’s tough business practices, but also in the West, where they have not forgotten the scandalous squeezing out of the British partner from TNK-BP? What if the letter had called for explicit criteria to be developed for sanctions to be lifted in principle, perhaps with the proposal of criteria arrived at through a transparent, broad discussion?
Such backroom dealings of Russian oligarchs, as they ask for help from Western lobbyists or Russian oppositionists, only serve to convince Western politicians that they have done everything right – you should keep your distance from those Russians, they are all linked through murky schemes, and they even suck in our people. It is in Russia where going to the right offices and asking “respected people” is the best way to get what you want. In the West, this, of course, happens too, but they do not like it. It is much more effective to create public pressure.
To get something, you need to offer something
Second, as far as I understand, all sanctioned persons want something done for them: sanctions to be lifted, allowed expenses boosted so there is enough for a cleaner. But it doesn’t work like that: in the West, it is honest deals, not the humblest requests “upwards,” that are welcomed. To get something, you need to offer something interesting to the other side.
"The most interesting, without a doubt, would be to help uncover the schemes of the Putin elite and track down the Kremlin’s money."
Yevgeny Chichvarkin, a Russian entrepreneur who founded the largest Russian mobile phone retailer, Euroset. He moved to the UK in 2009 and launched a wine store called Hedonism in London.
Source: Wiki Commons
Source: Wiki Commons
In the West, it is not unreasonable to think that the persons on the sanctions list have this information. Obviously, such assistance could be deadly for them – but you are asking for billions, and if you are not ready for that deal, then offer something else that could be useful. Here, statements that you do not support the war will not make you a hero. And no, offers to hand over your Ukrainian assets to Kyiv for nothing are not particularly attractive – they can be taken anyway.
Third, it is the common belief that you can still sit in two chairs – hence these thinly veiled threats to support the Kremlin. The West cares not one bit whether the elites rally around Putin, and it was with that in mind that the sanctions were introduced. For God’s sake, rally, write nasty tweets – as one former Russian president does – it will not affect Ukraine’s victory, and what you do in Russia after the defeat is still of little concern.
In conclusion, the Russian bourgeoisie’s comprador essence played a cruel joke on it. Fridman and his comrades actively exported the capital they earned in Russia to the West, but neither they nor many others managed to create anything particularly competitive outside their homeland.
Vladimir Lisin at least did something in Belgium, and Yevgeny Chichvarkin opened an honest wine shop. The restaurateur Mikhail Zelman turned out to be quite competitive. It’s just that such examples can be counted on one hand. The vast majority of wealthy people followed a simple rule: earn money in Russia, keep it in the West. This is what made the sanctions against them possible: there is no loss to Western economies from the fact that yachts and houses, bank accounts and the accounts of companies that take in money from Russia, were seized.
If our elite was engaged in creating national wealth, instead of exporting capital, perhaps the history of the country would not have reached such a sad point.
Third, it is the common belief that you can still sit in two chairs – hence these thinly veiled threats to support the Kremlin. The West cares not one bit whether the elites rally around Putin, and it was with that in mind that the sanctions were introduced. For God’s sake, rally, write nasty tweets – as one former Russian president does – it will not affect Ukraine’s victory, and what you do in Russia after the defeat is still of little concern.
In conclusion, the Russian bourgeoisie’s comprador essence played a cruel joke on it. Fridman and his comrades actively exported the capital they earned in Russia to the West, but neither they nor many others managed to create anything particularly competitive outside their homeland.
Vladimir Lisin at least did something in Belgium, and Yevgeny Chichvarkin opened an honest wine shop. The restaurateur Mikhail Zelman turned out to be quite competitive. It’s just that such examples can be counted on one hand. The vast majority of wealthy people followed a simple rule: earn money in Russia, keep it in the West. This is what made the sanctions against them possible: there is no loss to Western economies from the fact that yachts and houses, bank accounts and the accounts of companies that take in money from Russia, were seized.
If our elite was engaged in creating national wealth, instead of exporting capital, perhaps the history of the country would not have reached such a sad point.
Share this article
Read More
