U.S. Sanctions Billionaire Deripaska and Other Russian Oligarchs

• April 06 2018
• Saleha Mohsin, Justin Sink

The Trump administration sanctioned seven Russian tycoons, 12 companies and 17 senior government officials including key allies of President Vladimir Putin under provisions of a law Congress passed last year to retaliate against Moscow for meddling in the 201…

The Trump administration sanctioned seven Russian tycoons, 12 companies and 17 senior government officials including key allies of President Vladimir Putin under provisions of a law Congress passed last year to retaliate against Moscow for meddling in the 2016 U.S. presidential election.

“The Russian government operates for the disproportionate benefit of oligarchs and government elites,” U.S. Treasury Secretary Steven Mnuchin said in a statement Friday. “The Russian government engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities.”

Among the most prominent Russian tycoons identified Friday is Oleg Deripaska, the billionaire founder and majority shareholder of En+ Group, the largest operator of Siberian power plants with a major stake in Russia’s biggest aluminum producer Rusal. Companies Deripaska controls were also sanctioned including En+ Group and GAZ Group, Russia’s leading manufacturer of buses, in which he holds an 83 percent stake.

Deripaska, 50, made headlines last year due to his links to Trump’s former campaign manager, Paul Manafort. The Russian metals magnate has had difficulties in the past in getting a U.S. visa.

‘Intensive Strike’

“This is clearly a really intensive strike at Deripaska and his corporate holdings,” said Elizabeth Rosenberg, a former Treasury official who is a senior fellow at the Center for a New American Security. “By naming a number of oligarchs and state entities, including in the energy sector, it’s meaningful because they’re aiming at sensitive industries in Russia that generate a lot of revenue.”

In the statement unveiling the sanctions, Mnuchin added that Russians “who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.”

The U.S. in January identified 210 wealthy Russians, top officials and business leaders for a list required under the law, but Mnuchin has said that Treasury would use a classified portion of that list to establish penalties.

Other tycoons identified by Treasury on Friday include:

• Suleiman Kerimov, 52, a Russian senator and billionaire investor who’s facing money-laundering charges in France. He’s denied any wrongdoing but has agreed not to leave France. Kerimov controls 82.4 percent of Polyus, the biggest gold producer in Russia. The Moscow-based company produced 2.2 million ounces of gold in 2017 and has rights to more than 70 million ounces in proven reserves.
• Viktor Vekselberg, 60, chairman of Renova, a diversified investment group that has a stake in United Co. Rusal, Russia’s biggest aluminum producer. The Bahamas-based company also owns shares in equipment makers Sulzer and Oerlikon. He owns regional airports in Russia.
• Gazprom PJSC CEO Alexey Miller, 56, who’s been running the world’s largest natural gas producer since 2001 is a long-term ally of Putin. While Gazprom hasn’t been targeted by U.S. or European sanctions, its oil arm Gazprom Neft PJSC faced financial curbs over Russia’s involvement in Ukraine in 2014. Another state-run energy giant, Rosneft PJSC, was also sanctioned by the U.S. along with CEO Igor Sechin over Ukraine four years ago, though it hasn’t prevented the company from continuing foreign operations.

Asked about the possibility of sanctions before Friday’s announcement, Kremlin spokesman Dmitry Peskov told reporters: “The phrase ‘Russian oligarchs’ is considered inappropriate. The time when there were oligarchs in Russia passed long ago, there are no oligarchs in Russia.”

President Donald Trump has been criticized by Republicans and Democrats for doing little to punish Russia for interfering in the U.S. election and for being slow to act on the sanctions law. An investigation by Special Counsel Robert Mueller into whether Trump’s campaign colluded with the Russian government has cast a shadow over his presidency, though Trump denies the accusation.

Trump’s national security team has pressed for stronger action against Putin following the nerve-agent poisoning of a former Russian spy in the U.K. The move comes days after Trump reiterated his believe that “there’s nobody been tougher on Russia” than he has. He added in an April 3 news conference that “getting along with Russia is a good thing” but “there’s also a great possibility that won’t happen. Who knows?”

Trump expelled 60 Russian diplomats and closed Russia’s Seattle consulate in response to the attack in the U.K. The administration has also supported the sale of anti-tank missiles to Ukraine, which could be used against Russian forces, although the timing of when those weapons would be delivered hasn’t been clear.

Treasury on Friday singled out companies owned by the Russian government for contributing to the instability of the Syrian government “through the sales and transfer of Russian-origin military equipment in support of Assad’s regime, enabling Assad to continue carrying out attacks against Syrian citizens,” according to a press release. “These attacks have included chemical weapons attacks, which claimed the lives of hundreds of Syrian citizens.”

Sanctioned companies include weapons-trading company Rosoboroneksport and a financial institution it owns, the Russian Financial Corporation Bank.

The U.S. also identified associates of Putin linked to sanctioned banks: Andrey Akimov, 64, CEO of state-run Gazprombank, and Andrey Kostin, 61, head of state-owned VTB Group. Kostin early this year branded the sanctions against Russia “economic war.” The list contains another corporate titan with Kremlin ties, Vladimir Bogdanov, 66, CEO of one of Russia’s top five oil producers, Surgutneftegaz, which has a cash pile of about $40 billion.

The new limits also targeted top foreign policy and security officials, including Nikolai Patrushev, the secretary of Russia’s Security Council, and the heads of the Interior Ministry and National Guard, as well as the country’s Internet regulator. The list also includes Alexander Torshin, a deputy chairman of Russia’s central bank, who was in contact with Trump campaign officials before the 2016 election, and Alexey Dyumin, a former Putin bodyguard who’s now governor of Russia’s Tula region.

The measures also target Kirill Shamalov, who was briefly catapulted into the ranks of Russia’s super rich after his marriage to Putin’s daughter Katerina Tikhonova, which has since ended. He was sanctioned for his involvement in Russia’s energy sector, as was Igor Rotenberg, the son of sanctioned businessman Arkady Rotenberg, a childhood friend of Putin. 

The U.S. announced sanctions March 15 on a St. Petersburg-based “troll farm” and other Russian citizens and entities Mueller indicted in February for interfering in the U.S. election. That sanctions list also targeted individuals and entities the administration said were involved in cyber-attacks, including the 2017 NotPetya attack, described as the most damaging in history.

Trump’s outgoing national security adviser, H.R. McMaster, publicly called for a tougher line against Russia in a speech Tuesday, saying in the face of Putin’s increasing aggression around the world, “We have failed to impose sufficient costs.”

— With assistance by Ilya Arkhipov, and Gregory White