Oligarch sanctions with teeth may yet lack bite

En+ MKPAO

17/02/2022 11:26

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Dasha Afanasieva
    LONDON, Feb 17 (Reuters Breakingviews) - Oligarchs generally
see the UK as a soft touch. The cadre of billionaires in charge
of Russia’s biggest companies have for years been able to use
London as their playground. A Russian invasion of Ukraine may
change that. 
    Britain has long had ways to tighten up. Yet good ideas,
like a register to show the true owners of London mansions held
by shell companies, have taken ages to get going. A ban on
so-called golden visas, whereby rich foreigners hand over
millions of pounds for easy access to Britain, is only now being
mooted. 
    Reforms in 2019 did target individuals for asset freezes and
travel bans. But they narrowly focused on those involved in
destabilising Ukraine. The names sanctioned thus far largely
don’t include senior oligarchs and government figures identified
by the United States as close to the Kremlin, like businessman
Gennady Timchenko or Defence Minister Sergei Shoigu. 
    Compare that to the U.S. “Specially Designated Nationals”
list, on which oligarch Oleg Deripaska was placed in April 2018.
This effectively turns the sanctioned party into kryptonite, as
global banks that use the U.S. dollar system risk being
sanctioned themselves if they deal with them. The joke was that
even those recommending a restaurant to Deripaska could end up
on the SDN list. The oligarch had to be tortuously disentangled
from his global companies Rusal  RUAL.MM  and En+  ENPLq.L  to
stop them being sanctioned too. 
    Still, as of Feb. 10 the UK is toughening its act. Under new
amendments to the 2019 regulations, those who own or run
companies can be sanctioned if they “have been involved in
obtaining a benefit from or supporting the Government of
Russia”. That’s a pretty broad canvas, in some ways wider even
than the U.S. equivalent. It also includes strategically
significant industries such as mining and energy. While it lacks
the deadly extra-territoriality of the U.S. SDN list, it could
amount to a larger group of individuals to sanction and
effectively block from entering Britain.  
    The real test, however, is in implementation. The UK
Conservative Party has been responsible for the last decade’s
weak approach, and still calls the shots now. Tory peer Greg
Barker is an executive chairman of En+. It’s too soon to tell
whether Ukraine will be a decisive game changer.
    Follow @dasha_reuters https://twitter.com/dasha_reuters on
Twitter
    
    CONTEXT NEWS
    - The United Kingdom has amended legislation to allow it to
sanction companies benefitting from or supporting the Russian
government, including economically important and strategically
significant industries such as extractives and energy. 
    - The legislation also allows sanctioning many of the people
who own or manage such companies. The Feb. 10 amendment of 2019
regulations also targets people and companies who are involved
in destabilising Ukraine.
    - Sanctioned people would have their UK assets frozen and
would not be able to have funds made available to them in the
country.
    - The UK may also scrap its so-called “golden visa” regime
used by Russian and other foreign investors to resettle in the
UK, the Financial Times reported on Feb. 16.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FT article    https://www.ft.com/content/f990e61f-ece8-4bc9-91d9-58fee67e2ba3
UK amendments    https://www.legislation.gov.uk/uksi/2022/123/pdfs/uksiem_20220123_en.pdf
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by George Hay and Oliver Taslic)
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