Sanctioning oligarchs requires thinking like one

Oliver Bullough


Those sanctions are really shaping up.

You can always tell when someone first moved to Russia by what they think the natural rate of the ruble should be. For me, there just should be 28 rubles to the dollar, because that’s what there were a couple of decades ago, so I was never quite got used to the fact it has been twice that weak since the annexation of Crimea in 2014. Now, I am looking at news that it hits lows of 119 with disbelief. I keep wondering how exchange bureaus with two-digit displays are coping, and then I remember there isn’t any currency anyway, so it doesn’t matter.

All the signature achievements of Vladimir Putin’s reign appear to have collapsed in a week: the ruble is unconvertible, foreign investors have fled, he’s been thrown out of international forums, and that’s just the start. It’s staggering. Judged just on the raw impact on the ruble, sanctions have been spectacularly effective. Imports will be hugely expensive, even when they’re available, considering trade restrictions. 

BUT, and this is a huge but, we mustn’t mistake this on its own for success, and believe this will pressure influential people in Russia to pressure Putin to end his barbarity. Anyone who has read the economist Gabriel Zucman’s short-but-mighty book The Hidden Wealth of Nations, or his academic papers, or indeed any of the previous newsletters when I have referenced his work, will know that the Russian elite is unusual because it holds so much of its wealth offshore (indeed Zucman writes that the “vast majority” of the elite’s wealth is owned outside Russia). 

As such, the ruble is largely irrelevant to these people, because their assets are priced in dollars, euros, pounds or Swiss francs. In fact, if the Russian currency collapses further, they can just bring some of their money home and buy up even more of the country at fire sale prices. A collapsing ruble is an opportunity to the oligarchs, not necessarily a disaster.

So, although Western countries have gone further and faster than I expected, I have been disappointed that these sanctions are still treating Russia like a normal country, rather than as a kleptocracy. Yes, we should hit the foreign minister and the central bank, and all the usual things, but to influence decision-making, we need to target the 500 or so Russians who own basically everything in the country.

In order to influence the elite, we need to target their wealth, which means hitting it offshore. To find it, therefore, we must think like oligarchs.

  • We need transparency of offshore-owned property. The UK has FINALLY moved ahead with this, which is good, and it needs to close the loopholes in committee. The U.S. needs to get a move on and implement its Corporate Transparency Bill. This will reveal what oligarchs own.
  • We need to target oligarchs’ family members. They are used as cut-outs, and thus have to be included when their fathers are sanctioned. This will freeze what oligarchs own.
  • We need to give law enforcement the resources it needs, so it can confiscate what is exposed. This will confiscate what oligarchs own.


Perhaps the only thing recently that has taken my mind off what’s happening in Ukraine for any length of time was on Saturday afternoon, when the Welsh rugby team travelled to Twickenham stadium in London to play the English (for those who don’t know it: rugby is a distant cousin of what we Brits call American Football, and it is huge in Wales). This match happens every spring and is undoubtedly the highlight of Wales’ sporting year. We even have a song about it. I wondered, while I watched Wales succumb to a narrow defeat, how I’d feel if – for some improbable reason – the Welsh government was so evil that the nation was excluded from international competition. If I never got to watch Wales play England, Scotland, Ireland, France and the others, what would I think about that?

Of course, the locomotive for this particular train of thought was the response by sporting and cultural organizations all over the world to Putin’s invasion of Ukraine, which began with individual soccer teams declaring that they wouldn’t play Russia. 

  • “I can’t imagine playing a match with the Russian National Team in a situation when armed aggression in Ukraine continues. Russian footballers and fans are not responsible for this, but we can’t pretend that nothing is happening,” tweeted Polish captain Robert Lewandowski after news that the Polish Football Association was boycotting Russia.

Poland’s announcement was followed by others from England, Wales, Sweden, and pretty much everywhere. Eventually, even FIFA – the global governing body for soccer, which is never notable for its moral stance on anything that might cost it money – had to take action. At first it just tried to ban the Russian national anthem, but then succumbed to reality, and barred Russia altogether. Similarly, the Champions League final – the biggest occasion in the club game, and an incredibly lucrative occasion – was moved from St Petersburg to Paris, and Manchester United ended its sponsorship ties to Aeroflot, though that did look like a foregone conclusion since the airline had already been banned from the U.K. anyway.

In other news, the International Judo Federation suspended Vladimir Putin from his role as honorary president; the Formula One race in Sochi was scrapped; Russian ice skaters were banned from all competitions; and star conductor Valery Gergiev was sacked from his post in the Munich Philharmonic, and as honorary president of the Edinburgh International Festival, after failing to denounce the invasion of Ukraine. 

There have been many more interventions, but that gives some sense of the complete rupture in cultural connections between Russians and Westerners that has happened in the last week alongside the collapse in the ruble and the suspension of normal economic ties, and the extent to which Putin’s invasion has harmed his nation’s ability to enjoy the finer things of life.

There is a precedent for this, and that again lies in rugby. By the late 1960s, whenever the South African team toured abroad, it was greeted with protests against the government’s racist policies. Initially, the protests were small-scale and unpopular. 

  • “We tried to engage with them to say they were collaborators with the most evil and racist system in the world, but they just thought we were interfering with their game – and they really hated us for it,” as one protest leader explained.

Eventually though, the movement swelled and the signature achievement of the cultural boycott of South Africa was to cut its rugby team – the all-white Springboks – out of international competition pretty much altogether. Admittedly some foreign nations put their own desire to run around on a pitch ahead of the need to combat apartheid, but it was still a successful demonstration of international disapproval. 

World Rugby has barred Russia and Belarus from all competitions. The two countries are not colossi of the game, and few people in those countries will care, but it is symbolically important that they share the fate of Springboks and apartheid South Africa.

When Nelson Mandela became president, an iconic image of the new South Africa was to see him wearing a Springbok jersey, alongside white rugby players. It will be, in future, a symbol of Russia’s return to the fold when a new president can watch its players back on a football pitch, and frankly I cannot wait for that day.

Anyway, I was musing on this as I digested the Welsh players’ failure to score the winning points they needed with the last move of the game, and my sons – who are both big Paul Simon fans — clearly got bored waiting for me, and put some music on: “Alexa, play Diamonds on the Soles of Her Shoes”. That’s a song I remember listening to with my own father when it first came out in 1986. Why is this relevant? Because Paul Simon broke the sanctions on South Africa in order to travel to Soweto to make Graceland. The music my dad and I used to sing along to in the car was criticized by the United Nations’ Anti-Apartheid Committee itself.

  • “What gives [governments] the right to wear the cloak of morality?” said Simon at the time with the kind of twisted logic that John Pilger comes out with on Twitter to explain why the Americans are the real villains in Ukraine (I’m not going to link to him because you don’t need that kind of drivel in your life). “Their morality comes out of the barrel of a gun.”

His decision remains contentious to this day, but I would argue that the lesson from it is that when we boycott, we should focus on elite projects like the Russian football federation, the Olympic team (particularly in the light of yet another Russian doping scandal), anything involving Putin – all of the things in short which are the equivalent of the South African rugby team, and thus symbols of Russia’s grotesque political and economic inequality.

However, we should reach out to all the equivalents of Ladysmith Black Mambazo, who were catapulted to global stardom after performing with Paul Simon, and make sure that Russian artists and performers who are not part of the ruling system should be listened to and engaged with. I confess I am being a bit self-serving here. I couldn’t care less whether the Champions League final is in Munich or Monaco, but I had some of the happiest nights of my life watching glorious ska music in St Petersburg, or getting happily drunk in dive bars in Moscow. One of the best gigs I ever went to in London, with a group of Russophiles and Russians, was to see Leningrad at the Roundhouse.

In short, sanctions and boycotts are good, but please, leave the lights on for all the Russians as appalled by what’s happening in Ukraine as non-Russians are. They’re not to blame and some of them – like the artists who made this video – are doing what they can to speak up.


Of course, it’s hard to talk about sport and Russia without talking about Roman Abramovich, who has apparently handed over control of Chelsea Football Club to a charitable board.

  • “I have always taken decisions with the Club’s best interest at heart. I remain committed to these values. That is why I am today giving trustees of Chelsea’s charitable Foundation the stewardship and care of Chelsea FC,” said Abramovich in a club statement.

But what does that mean? Not perhaps what it seems.


I’ve not got much time to read anything but Twitter right now, but I have been enjoying Helen Thompson’s Disorder. I admit that I have a tendency to try to blame unregulated financialization for everything that’s wrong with the world – from the plight of Welsh rugby clubs, to climate change – but I do like an explanation which ties anything currently happening to Central Banks’ response to the 2007-8 financial crisis.

What about this then as an explanation for the whole Ukraine crisis, linking it back to when the Fed’s Ben Bernanke decided to scale back Quantitative Easing in 2014?

  • “As soon as Bernanke suggested tapering was a possibility, investors sold Ukrainian bonds. This made it impossible for Viktor Yanukovych’s government to roll over its debt in bond markets, pushing it to turn to Moscow in search of financial assistance and cheaper gas,” Thompson writes.

Yanukovich needed money; Putin demanded a trade deal; Yanukovich canceled his Association Agreement with the European Union; protesters came to the Maidan, and the rest is history. And all because of Quantitative Easing. Well, almost all. Maybe