Russia’s oligarchs: Who are they and why are they important?

Western countries have responded to Russia’s invasion of Ukraine with a raft of sanctions on the country’s economy, as well as wealthy individuals who may be enabling Russian President Vladimir Putin.

Putin’s invasion of Ukraine has been met with an unprecedented response from the United States, the United Kingdom, the European Union, Canada, Japan and Australia, among others.

While sanctions have been imposed most notably on banks, oil companies and other institutions, they’ve also been placed on rich and powerful Russian oligarchs, many of whom are considered to be members of Putin’s inner circle.

In addition to sanctions imposed in 2014 in response to the invasion of Crimea, Canada last week added dozens more on Kremlin officials, business executives and oligarchs.

According to Merriam-Webster’s definition, an oligarch is “a member or supporter of an oligarchy,” which is a government where a small group exercises control over political decisions, “especially for corrupt and selfish purposes.”

In the case of Russia’s elite, the term oligarch can relate to those powerful few who used personal connections after the collapse of the Soviet Union to take over previously state-owned industries, thereby profiting from Russia’s new capitalism.

With this in mind, a Russian oligarch either has direct or perceived power in Russia’s state of affairs, despite not necessarily being elected to government positions by Russia’s electorate.

A LOOK AT SOME OLIGARCHS AND THEIR ASSETS

Former KGB members, mineral executives and a deputy prime minister are just some of the roles held by Russian oligarchs targeted by western sanctions.

Nikolai Tokarev is among those who have been sanctioned. He is president of Transneft, a state-owned pipeline transport company responsible for transporting 90 per cent of Russia’s oil, according to the U.S. Treasury Department. He also served alongside Putin in the KGB during the 1980s.

The Rotenberg brothers – Boris and Arkady – have also been sanctioned. They own Russia’s SMP bank and oversaw construction of a bridge between Russia and Crimea in 2018.

Billionaire Alisher Usmanov, who founded USM Holding, an investment company owning iron, steel and copper suppliers, as well as telecommunications company Megafon, has been sanctioned, as with Putin’s former deputy prime minister-turned VEB bank executive Igor Shuvalov.

Igor Shuvalov

Then-Russian Deputy Prime Minister Igor Shuvalov attends a session on the third day of the annual meeting of the World Economic Forum in Davos, Switzerland, Thursday, Jan. 19, 2017. (AP Photo/Michel Euler)

Another sanctioned oligarch is former KGB agent Sergei Chemezov. He is the CEO of state-owned defence conglomerate Rostec and has about $400 million worth of assets including a real estate company in Ireland and a superyacht, according to Pandora Papers documents.

As Russian forces ramp up their military campaign in Ukraine, the lavish yachts of Russia’s wealthy — symbols of oligarch excess — have become targets for western countries, who vow to seize assets owned by Putin’s enablers.

Oligarchs are reportedly trying to transfer assets, such as superyachts, to friends or family members who aren’t sanctioned in an attemp to prevent them from being seized.

So far, Germany and France have seized two of these vessels in response the invasion of Ukraine, including the nearly US$600-million luxury yacht owned by Usmanov in the northern port of Hamburg.

NOTABLE OLIGARCHS NOT YET SANCTIONED

While he has not yet been officially sanctioned, Russian billionaire Roman Abramovich, an oligarch believed to be close to Putin, has started selling some of his most valuable assets, including Chelsea soccer club.

Yet Abramovich continues to own a stake in the Canadian company that provided the steel for the TransMountain pipeline expansion.

Roman Abramovich

Roman Abramovich attends the UEFA Women’s Champions League final soccer match in Gothenburg, Sweden on Sunday, May 16, 2021. (AP Photo/Martin Meissner, File)

Another wealthy Russian not yet sanctioned is Konstantin Babkin, who has made comments in support of invading Ukraine.

However, Babkin has since resigned from the board of Winnipeg farm equipment maker Buhler Industries, which is still mostly Russian owned, in a sign that those oligarchs not yet sanctioned are beginning to worry.

Canada has promised more of Russia’s wealthy will face sanctions in the hope that oligarchs under financial pressure will exert influence on the man who made them rich.

“We need to use maximum pressure at this point right to get them to change Vladimir Putin’s behaviour and maybe even make a change in the leadership in Moscow,” Marcus Kolga of DisinfoWatch told CTV National News.

There are signs that squeezing oligarchs is having an effect, with Russia’s economy tumbling and some wealthy Russians and their families posting anti-war messages on social media.

However, it remains unclear whether Putin’s inner circle has enough influence to get him to pull back the attacks on Ukraine.

With files from CTV National News Senior Political Correspondent Glen McGregor

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