Why isn’t the EU more aggressive on Russia? And where are the cryptocurrency oligarchs?

Oliver Bullough


Hi, welcome to Oligarchy, where we are tracking how the super rich are changing the world for the rest of us.


Last week, we held our first ever virtual Oligarchy Live event, which went very well. If you were unable to attend the Zoom call, it’s available to watch online here, and I would highly recommend it, not least for the virtual kleptocracy tour of London guided by the inimitable Roman Borisovich. 

If you haven’t previously come across Roman, check out his previous and alarmingly convincing appearance as “Boris” — a corrupt Russian health minister supposedly buying property in London  — while being secretly filmed for the 2015 documentary From Russia with Cash, alongside his “mistress,” the Ukrainian investigative journalist Natalia Sedletska.

You will also surely appreciate, if not perhaps enjoy, our version of the Eurovision song contest – or “kleptovision”, as Daria Kaleniuk called it – featuring three oligarchs’ children from different ex-Soviet states, all of whom have spent large amount of their daddies’ cash trying to realize their dreams of pop stardom, with mixed results. I’m afraid you’ll have missed the chance of voting for a winner out of the three but don’t take it too much to heart: in a very real sense, in comparison, we all of us are losers.

We had a very engaged audience sending in questions, but did not manage to tackle all of them, so I have decided to dedicate most of this week’s newsletter to addressing three questions we didn’t have time for.


“I’m not sure the British government, or any European government is interested in delivering a powerful blow to Putin’s autocracy, does Oliver perceive any desire among foreign governments to disturb the Russian status quo?”

It’s an old source of frustration among US politicians, officials and commentators that their European counterparts can be so much less gung ho about tackling the Kremlin than Washington is (for obvious reasons, the complaints died down during the Trump years, but they are back). There are lots of potentially sinister explanations for this, not least the success that wealthy Russians have had in cultivating parts of the political and business elites in so many European countries, like Italy, France, Austria, Germany, the United Kingdom, and elsewhere.

In some ways, it may only have been the Kremlin’s inexplicably confrontational approach towards leading European countries that has prevented them from abandoning Washington and unilaterally improving relations on their own.

The primary tool that Western states have used against Russia has been sanctions, which have targeted individuals, companies, as well as the state itself. EU officials often insist that the reason their sanctions against Russia cut shallower than the US equivalents is that they are bound by European law to ensure that sanctions don’t violate fundamental rights. There is some truth in this, and sanctioned officials (like this Ukrainian gentleman, who is the father of one of our kleptovision contestants) have had a lot of success in challenging EU sanctions in the courts, in a way that wouldn’t be possible in the United States.

However, there is a less sinister explanation for why US officials are willing to impose sanctions on Russia that cut deeper than their EU counterparts, which is that it is cheaper for them to do so. Last year, trade between the European Union and Russia came to more than 174 billion euros, while the UK added another 15 billion pounds — a total of some $230 billion. Trade between the United States and Russia meanwhile came to a relatively miserly $35 billion. The disparity in relative levels of investment in Russia by Europeans and Americans is of a similar level.

This means sanctions are potentially ruinous for some European countries, in a way that they simply are not for the United States, so European politicians have good — as well as bad — reasons to be cautious about severing economic ties. 

So, to answer the question: a lot of Western governments – in fact, probably a substantial majority of them – would rather Putin was replaced by someone who didn’t use nerve agents against his enemies, interfere with other countries’ elections, and annex chunks of his neighbors’ territory. But they won’t want to impose too high cost on their own citizens when making their feelings about the Kremlin felt. It’s just a fact of life that I’m always going to be more gung ho about costing you money than I am if the cost will be borne by myself.


“Do you think Unexplained Wealth Orders are an effective tool and should be expanded outside the UK? How likely is it that the current British government will have the appetite to use its extensive powers (UWOs under CFA 2017, the new anti-corruption sanctions regime, etc) against these characters in a meaningful way?”

UWOs became law in the UK in 2018, and were promoted as a new kind of weapon that would cut through offshore obfuscation, and force dirty money out of the UK, at almost no cost to law enforcement. 

“The provision specifically targets red flag situations where a person buying expensive items, like property or jewels, doesn’t appear to be wealthy enough to make the purchase. It could be a politician in Russia or a small business owner in Brussels who buys a multi-million pound property in central London. If the person has links to serious crime or access to public money, then the authorities can act,” said Transparency International at the time, in welcoming the law.

The orders turned out to be significantly less revolutionary than originally hoped. The primary problem that UK enforcement agencies have historically faced in legal battles against oligarchs stems from chronic under-funding, and UWOs appear to be no different. When faced with UWOs against three properties, Dariga Nazarbayeva and Nurali Aliyev – the daughter and grandson of the former president of Kazakhstan – retained a top London law firm and fought hard. The eventual judgement was a humiliation for the National Crime Agency, which was compounded by its being refused permission to appeal.

The NCA now faces having to pay legal costs equal to the entire estimated budget for a decade’s worth of UWOs.

  • “The decision to refuse permission is a big blow to the UK’s UWO regime and the NCA’s efforts to tackle dirty money, particularly when it comes into the UK from secretive offshore jurisdictions. There is no doubt that there will need to be a review as to whether the legislation as it stands is achieving its underlying intended aims and a serious rethink on how costs operate in relation to the regime,” concluded Spotlight on Corruption.

So, in answer to the question, it’s very hard to say whether UWOs are an effective tool, because the agencies lack the resources they need to find out.

  • “We are, bluntly, concerned about the impact on our budget, because these are wealthy people with access to the best lawyers,” as NCA Director General Lynne Owens told the Intelligence and Security Committee’s investigation into Russian interference in the UK. “I’ve got a very good legal team based within the National Crime Agency but they had a lot of resource dedicated out of my relatively small resource envelope on that work.”

Should other countries adopt UWOs? I would rather they — and the UK as well — started out by giving their investigative and enforcement agencies the money they need to enforce the laws they already have, before seeing if they need new powers. How likely is that to happen? I would say that, on current showing, and considering the fact the British government has just announced its agenda for the year with no suggestion it intends anything of the kind, that this is vanishingly unlikely.


“Are there any cryptocurrency oligarchs?”

I don’t know of any, unless we include Elon Musk, but there are fascinating signs that cities in Russia’s rust belt are turning to bitcoin mining to make money. The cold climate helps keep the cost of cooling the servers down, while abundant hydro-electric power ensures cheap (and green) electricity.

Personally, I’m yet to be persuaded that cryptocurrencies are anything other than climate disaster crossed with a pyramid scam, like those pioneered in Russia in the early 1990s. Interestingly, Sergei Mavrodi – the Russian mastermind of MMM, which is perhaps the largest Ponzi scheme the world has ever known, and which has lurched on like a financial zombie for decades – was moving into cryptocurrencies before he died.


Please read the FT’s editorial on the threat posed to journalists by Britain’s antiquated defamation law. It is hard enough trying to uncover the secrets of the rich and powerful, without having to worry about being sued for having done so.

  • “Claimants must be able to vindicate their rights in court where claims are well founded. But the costs of the current system hand the super-rich an advantage and can distort outcomes. The scales of justice must balance accuracy with greater tolerance of free speech. Without a recalibration, the system could enable privatised censorship,” the FT said. 

To which: Amen.

Nothing to do with oligarchy, but I have just finished Merlin Sheldrake’s Entangled Life, about fungi and how they’re far more influential on how the world operates than anyone previously realized, and I found it both fascinating and reassuring. I’d far rather the world was ruled by mycelia than by offshore bandits, frankly.

See you next Wednesday,


Tracking how the super rich are changing the world for the rest of us

More Coda Newsletters