One trend that showed around the world following Russia’s invasion of Ukraine was the imposition of sanctions on the wealthy oligarchs that comprise much of Vladimir Putin’s inner circle. Yachts and mansions were being seized, bank assets were frozen, and various governments were doing everything under the sun to hit them in the wallet. But now some western leaders are rethinking that strategy, with one Canadian official suggesting an alternate plan during a G-7 meeting in Germany this week. Chrystia Freeland proposed an international agreement to offer the oligarchs the chance to escape the sanctions if they offered to pay a hefty price, with the money going toward rebuilding Ukraine and helping the Ukrainian people impacted by the war. And the plan might have some other, less tangible benefits as well. (Associated Press)
Western allies are considering whether to allow Russian oligarchs to buy their way out of sanctions and using the money to rebuild Ukraine, according to government officials familiar with the matter.
Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland proposed the idea at a G-7 finance ministers’ meeting in Germany last week.
Freeland raised the issue after oligarchs spoke to her about it, one official said. The Canadian minister knows some Russian oligarchs from her time as a journalist in Moscow.
I suppose one of the first questions we might ask is whether or not Elena Baturina, the wealthiest woman in Russia who once gave Hunter Biden $3.5 million will be asked to kick into the Ukraine fund. She seems to have gotten off remarkably easily somehow, compared to many of her fellow oligarchs.
It’s also worth asking just how much help a plan like this could really deliver for Ukraine. CNN estimates that there are roughly 100 Russian oligarchs who are in the range of being billionaires, with close ties to Vladimir Putin. But not all of that wealth is in the form of cash, of course. Even if you could convince all of them to kick in $100 million (a very large amount to ask for), you’d be talking about roughly ten billion dollars. That’s a lot of money, to be sure, but I doubt it would rebuild even one city.
As the AP points out, having the oligarchs give up some of their frozen assets voluntarily might be of particular benefit to countries like Germany.
The proposal could help remove a legal hurdle for authorities in countries such as Germany, where the bar for confiscating frozen assets is very high. By voluntarily giving up a share of their fortune abroad, oligarchs would save Western governments the potential embarrassment of being rebuffed by their own courts.
The plan might have one other benefit, however. If you could convince a large number of the oligarchs to take the offer and escape future sanctions, they would almost certainly be split away from Vladimir Putin’s orbit, further isolating him. Most of them would probably have to leave Russia permanently in fear for their lives. That might weaken Putin significantly both in terms of financial muscle and influence. If that were the case and the money could be monitored and applied fairly to help the Ukrainians, it might be worth considering. But there’s no telling how many of them would take such an offer. Making an enemy of Mad Vlad has historically had a negative impact on people’s life expectancies.
Of course, none of this may matter if Putin isn’t going to be around all that much longer. With continued rumors about his declining health and capacities still swirling, he may wind up in a sanitarium or six feet under at some point. Would his replacement continue the war or blame the whole thing on Putin and withdraw from Ukraine voluntarily. That depends on who winds up seizing power, of course. But the Russians are really starting to feel the bite of the sanctions at this point, so perhaps they might be willing to consider a “transitional” plan that allows them to save face while ending the war.