Russian oligarchs: Who they are, why they're so wealthy, why they've been sanctioned, and how they've responded
- Dozens of
Russian oligarchshave been sanctioned by the West since Russiainvaded Ukraine.
- They've since seen their luxury yachts detained, private jets impounded, and property seized.
Dozens of Russian oligarchs have been sanctioned by the West since Russian President Vladimir Putin began his invasion of Ukraine on February 24. They've since seen their luxury yachts detained, private jets impounded, property seized, and bank accounts frozen.
Here's all you need to know about them.
What is an oligarch?
An oligarch is a member of an "oligarchy" — a small group of influential people that effectively controls a country. Individuals inside an oligarchy might hold top positions in business and
In the West, the word "oligarch" has come to be associated with wealthy Russian businesspeople. Most sanctioned Russian
Russian oligarchs sanctioned since the Ukraine invasion include the Chelsea Football Club owner Roman Abramovich, Rosneft CEO Igor Sechin, the Alfa-Bank cofounder Alexey Kuzmichev, and the EuroChem founder Andrey Melnichenko.
Why are Russian oligarchs so wealthy?
The fortunes of Russia's oligarchs usually stem from high-powered relationships in politics and business, Insider's Linette Lopez recently reported.
Many, including Abramovich, benefited from the "perestroika" reforms to Russia's economy and political machine.
In the 1990s, after the collapse of the Soviet Union, oligarchs amassed immense wealth and political influence as they bought industrial companies being sold off by the state. Abramovich, for example, bought the oil company Sibneft for about $250 million in 1995, in what was said to be a rigged auction. In 2005, he sold Sibneft back to the Kremlin-owned energy giant Gazprom for nearly $13 billion.
When Putin came into power in 2000, he vowed to crack down on government corruption. Some oligarchs were exiled, but those friendly to Putin were able to climb the ranks.
What are sanctions?
The Council on Foreign Relations defines economic sanctions as the termination of trade or other financial relationships for foreign-policy or security reasons.
In sanctioning Russia over its invasion of Ukraine, the West is using a three-pronged approach by targeting government, industry, and people.
Why did the West sanction Russian oligarchs?
Western officials say the oligarchs they've sanctioned enjoy close ties with Putin, which gives them considerable influence in Russia.
The European Union, for example, said Abramovich had "privileged access" to Putin and that Alisher Usmanov had "particularly close ties" to the Kremlin and "actively supported" government policies to destabilize Ukraine.
It's unclear how much influence oligarchs can exert over the Kremlin. Mikhail Khodorkovsky, an exiled Russian oligarch and outspoken critic of the Kremlin, has said oligarchs are "just Putin's footmen" and "cannot influence him." He told CNN it was "pretty unlikely" that oligarchs would speak out against the invasion of Ukraine.
Tom Keatinge, the director of financial-crime and security studies at the Royal United Services Institute, told CNN that sanctions on oligarchs were "frankly symbolic" and "definitely a PR exercise."
How have sanctions affected Russian oligarchs?
Some Russian oligarchs have had luxury assets seized and their bank accounts frozen. They've also been barred from conducting business in some countries and had their travel restricted, among other things.
The sanctions have also had tangible effects on oligarchs' business interests and their day-to-day lives.
Mikhail Fridman told the Spanish newspaper El País that he was "practically under house arrest" after being sanctioned and had to apply to the UK government to spend money. He also said his bank accounts, credit cards, and ATM cards had been blocked.
Petr Aven told the Financial Times he was struggling to pay bills and wasn't sure if he'd be able to employ a driver or cleaner. He added that he didn't "understand how to survive" after being sanctioned.
Fridman and Aven both stepped down from the board of LetterOne, an investment firm they cofounded, after being sanctioned. Since then, Aven said staffers at LetterOne were scared to meet with him. LetterOne employees were also told to ignore Fridman, the Financial Times reported.
Severstal, the steel company owned by Alexei Mordashov, said it lost one-third of its sales a month after Mordashov was sanctioned because it could no longer sell its products to the EU.
Which luxury assets are being seized and why?
Western nations have detained billions of dollars' worth of superyachts linked to sanctioned Russian oligarchs. Experts told Insider that superyachts functioned as useful status symbols for oligarchs, while helping further their luxurious lifestyles.
Yachts detained include a $120 million vessel linked to Sechin, two superyachts worth a combined $100 million linked to Kuzmichev, and the $578 million Sailing Yacht A, which is linked to Melnichenko.
Other superyachts linked to sanctioned oligarchs continue to traverse the globe. A vessel with ties to Suleyman Kerimov, who has been sanctioned by the US, the UK, and the EU, set sail from Mexico in March and trekked for 18 days across the Pacific Ocean to Fiji.
In late March, a $500 million superyacht returned to Russia from the Seychelles a month after Mordashov, said to be its owner, was sanctioned. Two superyachts linked to Abramovich, worth a combined $1 billion, were last seen in Turkey, which hasn't imposed sanctions.
At least nine Russian-owned yachts have switched off their trackers since sanctions were imposed, seemingly to avoid being monitored.
It's not just the oligarchs who are affected by the threat of yacht detentions: The crews on the vessels are also dealing with the fallout. Some have been fired, and some have had to deal with apparent vandalism. Crew members on one vessel were forced to catch and barbecue their own fish because local suppliers refused to serve and refuel the ship.
How have oligarchs responded to sanctions?
Some have stepped down from top executive roles. German Khan quit the board of the German oil company Wintershall Dea on March 15 after he was hit with EU sanctions. He also stepped down from LetterOne, along with two other
Similarly, Mordashov stepped down as a director of both TUI, a Germany tour operator, and Nordgold, a gold-mining company. Mordashov has also recently moved a total of $2.6 billion worth of shares in these companies to a person believed to be his wife.
The whereabouts of most of the sanctioned Russian oligarchs are unclear. But Abramovich was spotted in the VIP lounge of an Israeli airport in March on the same day a jet linked to him flew from Israel to Turkey, Flightradar24 data showed.
Several oligarchs broke down in tears after their assets were frozen, a personal assistant to multiple oligarchs told the Daily Mirror.
Who is Roman Abramovich, and why is he involved in peace talks?
Abramovich, worth an estimated $13.9 billion, is Russia's most recognizable oligarch. Read Insider's profile of his rise from college dropout and Red Army conscript to rubber-duck trader, billionaire, and, ultimately, wartime peace envoy.
The Wall Street Journal reported that in early March, Abramovich and some Ukrainian negotiators suffered symptoms from suspected poisoning after a meeting in Kyiv, Ukraine. The Kremlin dismissed the report, describing it as misinformation.
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