Personal sanctions against Putin — will they be effective?

Three years ago, in the days of March 2014, the President of the United States Barack Obama several decrees imposed sanctions on individual Russians and Russian companies for the annexation of Crimea by Russia.

The US government did not hide that wants to punish the entourage of the President of Russia Vladimir Putin on 20 March was imposed personal sanctions of Washington against close to the President of Russian businessmen Gennady Timchenko, the Rotenberg brothers, Yuri Kovalchuk. However, against Mr. Putin himself, no restrictive measures were not adopted.

In March 2017 policy in the United States and Europe to discuss the question of the effectiveness of measures that have been taken in 2014. Some populist leaders in Europe, in particular, the head of the French National front, marine Le Pen, advocated the lifting of sanctions against Moscow.

It is supported by politicians of similar persuasion in Germany and Italy. In the US there is another vector — political figures already present in the country’s authorities, raising the issue of opportunities for, and effectiveness of sanctions personally against the head of the Russian state.

On March 15 passed in the Banking Committee of the U.S. Senate hearing reported by the Russian service “voice of America”, the Republican Senator from Louisiana, John Kennedy asked the experts the question — is it possible to detect the capital and property owned by Putin personally, is great to their volume, and whether effective measures against these assets?

Director of energy and economic programs of the research Center for a new American security Elizabeth Rosenberg (Elizabeth Rosenberg, Center for a New American Security) said that she and her colleagues there is no precise information on the status of Vladimir Putin, but you can talk about money close to Putin people:

“If we think in this hypothetical situation (sanctions against Putin personally — D. G.) on the assets of President Putin and his entourage, owned by them, directly or indirectly, then I think we are talking about a huge amount of money. If it were possible to do it, then we would be faced with attendant consequences for the global economy and certainly a very deep — for US.”

The expert explained his idea: “the Consequences will be powerful for all workers in the global scale of us banks who will have to take measures to meet the requirements of these sanctions — it will be a judicial nightmare.”

While another expert, a senior Advisor at the Foundation for defense of democracy Eric Lorber (Eric B. Lorber, Foundation for Defense of Democracies), previous sanctions policy at the U.S. Treasury Department, reported that there is evidence of ownership of Putin’s inner circle in new York, San Antonio, San Francisco and Miami.

He also said that serious measures against Russia would be possible “to turn off the Russian financial system from the us, close to US all correspondent accounts of Russian financial institutions, which would bring down the Russian financial system.”

Whether sanctions against Putin personally will be the impact on the world economy, and if not, is it possible? Meet the Russian economic experts and politicians.

Sergey Aleksashenko: the seizure of Putin’s inner circle on the US economy will not affect

Well-known Russian economist, former first Deputy Chairman of Russian Central Bank Sergey Aleksashenko in an interview with the Russian service “voice of America” difficult to say how the American experts came to this conclusion: “In fact, even if you take 20 people from the Russian “list of “Forbes”, the upper part, we subtract out those shares that they owned, because of shares registered in Russia, to not freeze, all the other assets they have — God forbid, if 50 billion dollars will be typed”.

“From the freezing $ 50 billion — along with real estate, money in Bank accounts — is it me or the world financial system, nor the American financial system is somehow not even choke, you know, “detachment did not notice the loss fighter”.

And before this there (at the hearing — D. G.) the idea was to freeze the correspondent accounts of Russian banks. In General, I believe that even if the correspondent accounts of Russian banks will freeze it for the American economy, the American financial system does not affect” — said the expert.

The former first Deputy Chairman of the Central Bank of Russia believes that the rumors about Putin’s personal wealth remain rumors: “I believe that these assumptions are not justified. If Putin is personally owned, it has long been would once known. While no conclusive source of the fact we have not seen anywhere else”.

If Putin is running the same scheme, which was described by Alexei Navalny in his investigation of the property of Dmitry Medvedev — the actual use with ownership through nominees, then Aleksashenko believes that such relations are very difficult to prove:

“Palace in Russia to arrest is impossible. Accordingly, if all these LTD registered in Russia, and they have no dollar accounts, to get them from America impossible. Even if the dollar account under the scheme of Medvedev, they would be charities, then arresting account of charitable foundations, with absolutely hard evidence that it is stolen money, and Putin personally owns them, I think, impossible. You can build any hypothesis, but the American system doesn’t work”.

Sergey Aleksashenko in December last year, published a special report on the effectiveness of sanctions against Russia for the annexation of Crimea, which was published by the Atlantic Council.

Well-known economist believes that the US sanctions against Russia in their current form do not have a significant influence on the behavior of the Kremlin: “I sympathize with those American politicians who believe that sanctions never have the obvious effect. The objective was to influence the behavior of Russian politicians in Ukraine and to make Russia pay some price for its aggression.

Russian politicians do not change their behaviour, and Russia practically does not pay any rates. If you compare the US sanctions against Iran and against Russia, I believe that the effect of sanctions against Russia — 5% of Iranian. When Iran pushed with all his strength, in four years he went to negotiate”.

Stanislav Belkovsky: Putin’s response will be asymmetric

Political analyst Stanislav Belkovsky does not agree with Sergey Aleksashenko and believes that Vladimir Putin owns or controls through Trustees are the “huge sum”: “a Significant part of the assets of Putin in Russia is in cash in the amount of $ 50 billion that are on the accounts of “Surgutneftegaz” and “Rosneftegaz”.

And the fact that the company “Rosneft” buys herself, one practical explanation is thus accumulated significant amounts of cash in accounts of “Rosneftegaz”, which is not answerable to anyone, not accountable to anyone except the first person of the country.” In total, according to Belkovsky, Vladimir Putin may control assets worth 200-300 billion dollars.

The analyst said that the sanctions that have been imposed are quite effective: “the Philosophy of sanctions, as these sanctions was conceived by President Obama and his chief adviser on this issue, Daniel fried, was to drive a wedge between Vladimir Putin and the elites that the sanctions are unhappy.

And they are unhappy to arrest their assets and not allowed to go into the Euro-Atlantic world, seriously have to adjust their life strategies, including education for children and health care for the whole family, so gradually it happens, discontent is growing among the elite”.

According to Stanislav Belkovsky, the American experts speaking about the serious consequences of sanctions against Vladimir Putin personally, they spoke mainly about the possibility of inadequate response from the Kremlin:

“Putin, of course, will not forgive, and the response will be asymmetric. For example, there was a coup attempt in Montenegro. She, however, was unsuccessful, but at the same time showed that Europe is very vulnerable to such attempts. Yes, they came close to winning, but “can you repeat that”, as they say in these environments. And such a response from Putin can be expected. Naturally, because of economic forms, financial forms of pressure and it will not bring down the markets, even if it is 200 or 300 billion dollars.”

If to speak about financial and economic side of the issue and suggest that concerns Elizabeth Rosenberg was literal, then the political scientist is sure, that they are vain: “however Much money was Putin, that’s absolutely not the same orders of magnitude to bring down the world economy.

The risk is asymmetric response to hacking attacks on banks, the financial system of the United States. In this, Yes, but not in terms of just blocking the money that will bring. Especially if the money will be blocked in us banks, they actually remain in circulation in the US financial system, and will not be taken from her.”

Danila Galperovich is a reporter for the Russian Service “voice of America” in Moscow. Cooperates with the “Voice of America” in 2012. For a long time he worked as a correspondent and host of programs on Russian service Bi-Bi-si and “Radio Liberty”. Specialization — international relations, policy and legislation, human rights.