We aren’t going after Russian oligarchs in the right way. Here’s how to do it
We’re sanctioning Russian oligarchs up the wazoo, hoping it’s a way to get Putin to stop his deadly attack on Ukraine.
But for this tactic to work, two conditions must be met: first, the US and our allies must be able to locate and tie up Russian oligarchic wealth. Second, Russian oligarchs must have enough power to stop Putin.
Let’s take them one at a time:
Anecdotally, sanctions on the oligarchs appear to be working. Last Sunday, the billionaire industrialist Oleg Deripaska (on the US sanctions list) and banker Mikhail Fridman (on the EU’s) both publicly urged an end to Putin’s war.
Billionaire businessman Roman Abramovich has put his English soccer club up for sale and vowed to donate the proceeds to “all victims of the war in Ukraine”. Banker and entrepreneur Oleg Tinkov told his 634,000 Instagram followers last week that “innocent people are dying in Ukraine now, every day, this is unthinkable and unacceptable”.
But are these sanctions really biting? This is where a comparison of Russian oligarchs with American oligarchs comes in.
While Russian oligarchs (Russia’s richest 0.01%) have hidden an estimated $200bn offshore (over half of their financial wealth), American oligarchs – America’s 765 billionaires – have hidden $1.2tn (about 4% of their wealth), mostly to avoid paying taxes on it.
While American oligarchs park their income and wealth in tax havens such as the Cayman Islands, Russian oligarchs have hidden their most valuable assets in the United States and the European Union. The reason they do so is telling: western democracies follow the rule of law.
Under the rule of law, before a government can seize property it must follow lengthy and elaborate legal processes. As a result, American and European governments are
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