bne IntelliNews – G7 mulls letting Russian oligarchs buy up sanctioned assets
Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland has hinted that Russian billionaires could pay to have sanctions against them lifted. Freeland raised the idea at a meeting of G7 finance ministers in Germany, adding that the funds raised could be earmarked for rebuilding war-damaged Ukrainian towns.
Since Russia invaded Ukraine on February 24, Western nations have imposed successive rounds of sanctions against Russia. In addition to politicians, high-profile sanctions targets have included oligarchs who made billions in the sale of state assets after the collapse of the Soviet Union. Many have had their assets frozen and are banned from traveling and doing business in the West.
Some politicians have endorsed the idea of using frozen Russian assets to rebuild Ukraine. However, there is a risk that Western courts will overrule the governments’ decision if they attempt to divert Russian assets to Ukraine. Freeland’s proposed strategy could allow sanctioned money to be given to Ukraine while reducing the risk of a legal challenge.
The proposed solution would also allow the oligarchs to distance themselves from the Putin regime by voluntarily spending money on rebuilding Ukraine. The European Commission alone estimates that it froze more than $10 billion from more than 30 oligarchs.
Having worked in the Moscow office of the Financial Times, Freeland knows Russian oligarchs. She reportedly brought up the strategy after an oligarch suggested it to her. Freeland has Ukrainian heritage, so he is in a good position to raise the contentious proposal.
AP quotes an official present at the G7 meeting who says Ukraine does not oppose the idea.
Former Chelsea owner Roman Abramovich was cleared to sell the football club this week on the condition that the net proceeds from the sale be donated to war victims in Ukraine. Sanctions imposed on Abramovich by the UK meant that his Chelsea property was frozen and the club was no longer able to sell tickets and merchandise.
The model proposed by Freeland would share many of the advantages of the one used for the forced sale of Chelsea FC: in exchange for the possibility of saving some of their assets abroad, the oligarchs voluntarily help to mitigate the humanitarian catastrophe in Ukraine while distancing himself from Putin.