He makes an example out of entrepreneur Oleg Tinkov who sold his Russian assets, including the digital lender Tinkoff Bank along with hotels he owned. He publicly condemned the war in Ukraine and now lives in Italy, after having renounced his Russian citizenship. This, however, wasn’t enough to convince the United Kingdom to remove sanctions against him.
“Lifting my sanctions would be fair and would send a signal that Western sanctions are not directed against all Russians…,” Tinkov wrote to the UK government, as cited by Bloomberg News earlier this month. The inability to lift sanctions against Oleg Tinkov has led to critical comments in the British media.
As recent events show, personal sanctions imposed by the EU and the UK against businessmen have turned out to be a political tool of ambiguous effect and legality. Arguably, they breach civil rights, depriving the targets of the opportunity to travel. Additionally, these restrictions have not achieved their desired result of ending the war in Ukraine or changing the political regime in Russia.
The EU responded to war in Ukraine by slapping individual sanctions on Russian business magnates at a fast pace. The justification of personal sanctions labelled people from different, even small industries as “influential” or “leading” businesspersons whose companies’ taxes help fund the war in Ukraine. The EU sanctioned individuals based on a list posted on social media with the names of the participants of a meeting with President Vladimir Putin on February 24, 2022.
This meeting, however, was unrelated to the war. It was a routine gathering on economic issues with the business lobby group RSPP, which was planned long before February 24.
By sanctioning businessmen, the EU hoped to fracture the Russian elite with the ultimate goal of ending war. The EU’s approach proved unsuccessful because it is based on an outdated perception of Russia by western countries that Russian businessmen are part of President’s inner circle. In the 1990s, Russian politics were dominated by oligarchs who’d manipulate President Boris Yeltsin and lobby for the cheap privatization of state assets, which quickly came under their control. But this changed in 2003, when Putin sentenced Mikhail Khodorkovsky to a 10-year prison term, sending a clear signal to the former oligarchs. Putin introduced a boundary between business and politics with his famous meeting in 2000.
In contrast to the former oligarchs, Russia now has a number of self-made businessmen who were absent from the notorious privatization schemes of the 1990’s and who built their careers through the free market, as opposed to through government contracts. But many of them got sanctioned as well.
There are the CEOs of private businesses, who have gradually modernized companies in Russia and have fostered cooperation with international peers. In Russia, CEOs are technocrats who have little influence compared to business owners. Most of these CEOs have facilitated Russia’s ties with the international community.
Some of these CEOs such as Dmitry Konov of petrochemical producer Sibur, Alexander Shulgin of online marketplace Ozon, Vladimir Rashevsky of fertilizer maker Eurochem, Andrey Guryev Jr. of Phosagro and several executives of technology company Yandex were also put on sanctions lists. In addition, the famous investment banker Elena Titova was sanctioned by the US just for sitting on the board of state-run Otkritie Bank. All of these leaders had to step down after they found themselves on the sanctions list. It is unclear if their replacements will be able to continue modernizing the companies.
The businessmen are now appealing the EU sanctions in court, which is extremely difficult amid current geopolitical tensions as the case of Oleg Tinkov shows.
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