UK Imposes Sanctions on Those Connected to Russian Oligarchs

The UK government has imposed sanctions on the enablers of the Russian oligarchs Roman Abramovich and Alisher Usmanov. These enablers have been accused of hiding Mr Abramovich’s and Usmanov’s assets. Typically, the increasing international concern over the ongoing Russian invasion of Ukraine has led the United States and other Western nations to impose a number of sanctions on Russia. These measures are intended to pressure the Russian government to respect Ukraine’s territorial integrity and withdraw its soldiers from the country.

The Foreign Office announced these sanctions in April, 2023 and targeted the “oligarchs enablers.” The Foreign Office accused these individuals of knowingly aiding the billionaire businessmen to hide their wealth. These latest sanctions involve freezing assets and a travel ban on two individuals based in Cyprus who allegedly offered services to Usmanov and Abramovich. The move to sanction the “oligarchs’ enablers” comes a few months after the Guardian’s oligarch file project revealed that trusts holding assets worth billions of dollars for the former Chelsea owner Mr Abramovich were quickly reorganized moments before the sanctions were officially imposed on him.

It is also important to note that these sanctions are the latest to be imposed on close associates of Abramovich and Usmanov, who were both sanctioned last year after the invasion of Russia on Ukraine. Shortly after the announcement, the United States Treasury published wide-ranging restrictions which targeted associates and “facilitators” of Alisher Usmanov, who allegedly helped the billionaire manage his financial interests.

Officials from the United Kingdom explained it is common for oligarchs to try and shield their wealth in the face of sudden and unprecedented international sanctions. These oligarchs use financial fixers such as shell companies, offshore trusts, and sometimes family members.

According to the leaked files exposed by the Guardian, around 10 offshore trusts owned by Mr Abramovich were amended to transfer the ownership of these trusts to his children. Since this transfer happened just weeks before the invasion, it is possible that the changes were made to secure the oligarch’s fortune from sanctions he was sure would come to pass. The leaked files suggested that Demetris Ioannides and his firm had organized and executed the transfer. For over two decades, Demetris’ company had helped manage Abramovich’s financial interest. The United Kingdom government has imposed sanctions on Demetris and his offshore company MeritServus HC Ltd on the grounds of knowingly crafting murky offshore structures to help Abramovich shield assets worth more than £760 million from being sanctioned.

Before the sanctioning of his close associates, UK and EU officials had termed Abramovich as a pro-Kremlin oligarch and had imposed a sanction on him last year on the grounds of benefiting from close relations with Vladimir Putin. Apart from denying any close financial ties to the Kremlin, Abramovich has also taken legal action and filed a case in courts to overturn the sanctions imposed by the EU.

This new streak of measures in the form of sanctions has also forced Whitehall officials to focus on the rather “complicated” financial holdings of the Russian metals magnate, Usmanov. The officials have also imposed sanctions on his associates and any firm related to him. One of the key associates to be sanctioned is the Cyprus-based lawyer Christoduolos Vassiliades. According to UK officials, Vassiliades is among the key players in the web of trusts and offshore firms which link Usmanov to Sutton Place, a Tudor manor in Surrey. At the moment, both Demetris and Vassiliades have remained unavailable for comments.

However, USM, a holding firm by Usmanov, released a statement recently stating that it was ready to challenge the sanctions imposed in a court of law. In the statement, the firm believes the measures taken against it and its associates are unjust and unfounded. 

These new measures taken by the UK government show that the regime is willing to impose more and more sanctions on the “enablers” who facilitated sanctions invasion and associated money laundering. July last year, enforcement agencies from the UK reported that some individuals sanctioned were using enablers to help them invade sanctions. These enablers helped to distance the oligarchs from their assets by either transferring ownership to trusted intermediaries or close family members.

In an exclusive interview with EatNews, a former sanction official from the United States explained that the current sanctions were just the beginning. According to the official, these new measures indicate a new development. However, the former official believes that London had the power to sanction the individuals who helped the oligarchs evade sanctions a while back. While announcing the measures to sanction the enablers, James Cleverly, the British foreign secretary, said the government was closing in on the Russian oligarchs and their “enablers.” James promised the UK government would continue cutting them off from the assets they thought they safely owned.

As a result of the ongoing Russo-Ukrainian invasion, Russia has already been subject to several penalties, and more are certain to follow. It will be fascinating to observe how the oligarchs and other people who support the Russian government’s actions in Ukraine respond to the heightened pressure. Targeting oligarchs and other people who support those actions will likely have a substantial impact. The introduction of sanctions is just one of how the international community is expressing its unanimity in its disapproval of Russia’s behaviour.