Why individual sanctions on the Russian elite are unlikely to be effective

Can Western Sanctions Retreat Vladimir Putin? So far, the most important results have been for the entire Russian economy. The suspension of the NordStream2 gas pipeline project, the blocking of imports and exports of certain commodities, and the partial exclusion of Russian banks. From the Swift financial network, the freeze of funds from the Central Bank of Russia, etc.

But the European Union (EU), the United States and the United Kingdom are also political (ministers, agents) or economics (Kremlin). These measures are intended to put pressure on the withdrawal of support for military operations led by Vladimir Putin. However, due to the limited maneuverability of Europeans and Americans in the region, they remain symbolic in nature.

Read again: The latest information on international sanctions against Russia

3 types of sanctions

Specifically, the European Union can impose three different forms of individual sanctions on these Russian personalities.

  • Travel restrictions

Authorized individuals are prohibited from entering EU territory, even for short passages during travel. Specifically, the airline is supposed to make sure that passengers are not subject to sanctions at the time of boarding.

Nevertheless, if a licensed individual manages to pass by private jet or overland, he will be at the mercy of customs or police checks. Without a visa, he will be sent back to Russia immediately.

Authorized individuals will not be able to access the accounts of European banks, will not be able to carry out transactions with European establishments, and will not be able to earn income from European entities.

Specifically, European banks are supposed to check the list of sanctioned persons daily and block all transactions related to them. In the event of a breach, they are responsible.

Sanctioned individuals lose the right to profit from the sale or rental of assets in European soil (real estate, yachts, private jets, works of art, etc.).

Specifically, European notaries are prohibited from selling licensed private homes, and banks must block the rent they receive if the property is rented.

However, contrary to common belief, freezing is not confiscation. The law does not allow the French state to seize the funds stored in an apartment in Paris, a chalet in Mejeve, or a yacht on the Cote d’Azur owned by a licensed individual, or in his or her bank account. Hmm. Proper confiscation requires a court order based on evidence of financial misconduct (money laundering or corruption). The recently decided sanctions, on the other hand, are discretionary political decisions justified by the support of sanctioned persons against the political warrior Kremlin.

Specifically, frozen assets remain in the gray zone until sanctions are lifted. Theoretically, nothing prevents a licensed individual from maintaining the enjoyment of his home in the meantime: a ban on European soil can actually prevent access to his wells. Even if he has sex, he may still share it with friends and relatives.

A licensed individual can theoretically maintain the enjoyment of his yacht, but the latter cannot leave the territorial waters in either France or Europe.

Wealth that is difficult to evaluate

One of the main problems is that so far it is not possible to quantify the assets of all European assets and the assets of the Russian elite subject to sanctions.Europeans and Americans also announced on February 26th that they intend to establish “Transatlantic Task Force” Inventory these assets.

It is known that many oligarchs have invested in Western Europe, especially London, Côte d’Azur, Spain, or the Alps for years, thanks to the media and publications of non-governmental organizations (NGOs). Therefore, in theory, frozen assets should reach billions of euros.

Economic arrangements with candidates

Individual sanctions on the Russian elite are hampered by major problems. The most prominent politicians and politicians rely on a variety of techniques to hide their financial and real estate assets.

  • Figurehead: Straumann retains their wealth on their behalf.
  • Financial Arrangement: Assets are held by a cascade of offshore companies of unknown true owner.

Vladimir Putin, for example, is considered the wealthiest man in the world, but has few assets in his own name. Studies by many media and NGOs have shown that he relied on the personality of his aides to hold his real estate and financial assets for him.

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These concealment practices reduce the effectiveness of economic sanctions that target only individuals. “In some cases, it is possible to target relatives such as children, but this requires solid evidence that they are acting as candidates.”Francesco Zimelli, a European sanctions expert who teaches at the University of Groningen (Netherlands), explains.

“For sanctions to be more effective, Europeans should make more efforts to identify these candidates in order to better understand the assets of these individuals.”There are many Myra Martini researchers at NGO Transparency International.