eBusiness Weekly
Chelsea football club owner Roman Abramovich is among seven of Russia’s wealthiest and most influential oligarchs who have been hit with sanctions by the UK, in an effort to further punish allies of Vladimir Putin over the invasion of Ukraine.
Abramovich was found by the UK government to have “received preferential treatment and concessions” from the Kremlin and through his business links been “involved in destabilising Ukraine and undermining and threatening the territorial integrity, sovereignty, and independence” of the eastern European country.
The Foreign Office said he was implicated through a steel manufacturing and mining company, Evraz plc, in which he had a significant shareholding and over which he exercised effective control.
It said the firm may have supplied steel to the Russian military for the production of tanks.
Abramovich’s assets have been frozen, and he will be prohibited from making any transactions in the UK, as well as being subject to a travel ban.
The share price of Evraz, a firm which is incorporated in London but with mostly Russian assets, slumped by as much as 13% on Thursday morning, following the announcement. Abramovich’s stake was worth £1.4bn at the end of 2021, but had plummeted to £320m on Wednesday evening.
It is the first time Abramovich has been subjected to sanctions by the UK or any of its allies.
The other Russian oligarchs hit with sanctions on Thursday morning were Igor Sechin, Oleg Deripaska, Andrey Kostin, Alexei Miller, Nikolai Tokarev and Dmitri Lebedev.
Deripaska was Abramovich’s one-time business partner, Sechin was said by the Foreign Office to have been Putin’s “right-hand man”, and Kostin, Miller, Tokarev and Lebedev were labelled as part of the Russian president’s “inner circle”.
Boris Johnson said the move was a demonstration of the UK’s “unwavering support for the Ukrainian people”. The prime minister added: “We will be ruthless in pursuing those who enable the killing of civilians, destruction of hospitals and illegal occupation of sovereign allies.”
The sanctions against Abramovich have huge repercussions for Chelsea Football Club, which Abramovich was in the process of trying to sell. Ministers have effectively blocked that process.
A government source told the Guardian they would consider an application for a licence to allow sale of the club – but that it would not be granted if it benefited Abramovich while he was subject to sanctions.
Nadine Dorries, the culture secretary, said a special licence had been issued to allow games to be played, staff to be paid and existing ticket holder to attend matches but that Abramovich would be deprived of benefiting from his ownership of the club.
“I know this brings some uncertainty, but the government will work with the league and clubs to keep football being played while ensuring sanctions hit those intended,” she added.
Before the Russian invasion of Ukraine, Abramovich’s lawyers had argued that he did not fit the criteria for sanctions, and said: “It would be ludicrous to suggest that our client has any responsibility or influence over the behaviour of the Russian state.”
David Lammy, the shadow foreign secretary, said the action taken against Abramovich was the right decision but overdue.
“Too few oligarchs linked to Putin’s rogue regime have so far faced sanctions from the UK government,” he said.
“We are lagging far behind allies in the EU and the US.
“It is right that, under pressure from Labour, the government U-turned to strengthen sanctions legislation. Ministers must now move faster to continue to close the sanctions gap.”
Liz Truss, the UK foreign secretary, told CNN on a visit to the US that “there can be nowhere to hide for these individuals, and we cannot carry on with business as usual as we have been doing for the past 20 years”.
She added: “If Putin doesn’t stop now, and isn’t stopped in Ukraine, the consequences will be even more damaging for European security, but also for global security.”
So far, the UK has hit 18 oligarchs with sanctions since Russia’s invasion of Ukraine. They are barred from conducting any financial transaction in the UK.
This means that for individuals with UK properties, such as Abramovich, they will no longer be able to employ staff such as cleaners, housekeepers or gardeners, or even to have contracts for utilities such as electricity.
There is no suggestion yet that such homes could be seized by the UK, with all assets deemed to be frozen.
The government has been criticised for being too slow to impose sanctions, given Russia’s invasion of Ukraine began just over two weeks ago.
Critics said that those oligarchs fearing they could have their assets frozen would have speedily worked to move these out of the country.
UK officials stressed that taking action against oligarchs was complex, and that cases had to be legally watertight, and that there were even more complications with Abramovich given his stake in such a public institution as Chelsea.
But they rejected the idea that action was delayed, or slow.
“The plan is for what is described as a “clear ratcheting up” of sanctions, with the passing of the economic crime bill next week, after it goes through the House of Lords, allowing more action, for example with unexplained wealth orders and over foreign-owned properties in the UK.
In a fresh embarrassment for the Foreign Office, it was forced to delete a tweet that announced sanctions against Lebedev using a picture of Dmitri Medvedev – a former prime minister of Russia.
A spokesperson for the department said it was an “administrative error which was quickly spotted and rectified”.— The Guardian
