U.S. Said to Sanction Seven Russians of Putin's Inner Circle , 17 of their Companies

Monday, April 28, 2014

U.S. Said to Sanction Seven Russians of Putin's Inner Circle , 17 of their Companies

Bloomberg

U.S. Strikes at Putin’s Inner Circle With Sanctions as Fight Over Ukraine Intensifies

By Roger Runningen and Jonathan Allen Apr 28, 2014 12:35 PM CT

The Obama administration today imposed sanctions on seven Russian officials and 17 companies linked to President Vladimir Putin’s inner circle over the crisis in Ukraine.
The list includes Igor Sechin, OAO Rosneft (ROSN) chief executive officer, and Sergei Chemezov, director of State Corporation for Promoting Development, Manufacturing and Export of Russian Technologies High-Tech Industrial Products, also known as Rostec, and banks such as InvestCapitalBank and SMP Bank.
The travel bans and asset freezes announced by the White House were levied in coordination with the European Union, which said today it’s adding 15 more names to the list of 55 individuals previously sanctioned. The identities of those targeted by the EU weren’t immediately disclosed.
The U.S. and EU say Russia hasn’t lived up to an accord signed April 17 in Geneva intended to defuse the confrontation between the Ukrainian government and pro-Russian separatists. The U.S. warned it’s prepared to levy additional penalties to hit the broader Russian economy if Putin escalates by sending troops into Ukraine.
“The goal here is not to go after Mr. Putin, personally,” President Barack Obama said earlier today at a news conference in the Philippines. “The goal is to change his calculus with respect to how the current actions that he’s engaging in in Ukraine could have an adverse impact on the Russian economy over the long haul.”

Export Restrictions

The U.S. also expanded export restrictions on defense technologies and services and revoked previously approved export licenses.

A Snapshot of Ukraine's Past and Future

The new sanctions list includes Oleg Belavantsev, Putin’s presidential envoy to Crimea; Dmitry Kozak, deputy prime minister of the Russian Federation, and Evgeniy Murov, director of Russia’s Federal Protective Service and an army general.
Most of the companies on today’s list are tied to Gennady Timchenko or brothers Arkady and Boris Rotenberg, who were placed on a sanctions list on March 20. They include the Volga Group, which is controlled by Timchenko, and InvestCapitalBank and SMP Bank, which are controlled by the Rotenbergs.
One of the most prominent individuals on the list is Sechin, 53, who was Putin’s colleague at the St. Petersburg mayor’s office before rising to become the head of state-run Rosneft. Over the past decade he has built it into the world’s largest publicly traded oil company by output and reserves.

Photographer: Maxim Shipenkov-Pool/AP Photo

Company Ties

Rosneft, in which British oil company BP Plc holds a 20 percent stake, isn’t being sanctioned. The Russian company also has exploration projects with other international oil producers, including a venture with Exxon Mobil Corp. (XOM) to drill a multibillion-barrel prospect in Russia’s Arctic Ocean.

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Bloomberg

U.S. Sanctions Target Putin Allies’ Companies, Rosneft’s Sechin

By Elena Mazneva and Torrey Clark Apr 28, 2014 1:45 PM CT

Photographer: Meridith Kohut/Bloomberg

The Obama administration imposed sanctions on OAO Rosneft Chief Executive Officer Igor... Read More

The U.S. imposed sanctions on seven Russian executives and officials and 17 companies controlled by four of President Vladimir Putin’s allies as the crisis in Ukraine escalates.
The following is a list of those targeted.
*Igor Sechin
Sechin, 53, has worked with Putin for more than two decades, starting the St. Petersburg mayor’s office in the 1990s. He was appointed chief executive of OAO Rosneft (ROSN) in 2012, having served as board chairman since 2004. Sechin oversaw the company’s growth over the past 10 years into the world’s biggest publicly traded oil producer by output, largely through acquiring Yukos Oil Co.’s assets and TNK-BP.
*Sergey Chemezov
Chemezov, 61, heads Rostec, the state corporation that owns arms exporter Rosoboronexport and holds stakes in more than 660 other civilian and military-industrial manufacturers. He is chairman at titanium producer OAO VSMPO-Avisma and OAO Uralkali, the world’s largest potash producer, and is on the boards of automaker OAO AvtoVAZ, controlled by Renault SA-Nissan, and OAO Kamaz, part-owned by Daimler AG.
Chemezov has known Putin since the 1980s, when the Russian leader served as a KGB officer in Dresden, then East Germany.
*Dmitry Kozak
Kozak, 55, a deputy prime minister, was in charge of Russia’s preparations for the Sochi Winter Olympics and is now overseeing the development of Crimea, the Black Sea peninsula that Russia annexed from Ukraine.
*Vyacheslav Volodin
Volodin, 50, has served as the first deputy chief of the presidential staff under both Putin and now Prime Minister Dmitry Medvedev, replacing Kremlin ideologue Vladislav Surkov in 2011.
*Alexei Pushkov
Pushkov, 59, heads the foreign affairs committees of Russia’s lower house of parliament and supported the annexation of Crimea.

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Bloomberg

Russian Billions Scattered Abroad Show Trail to Putin Circle

By Henry Meyer and Irina Reznik Apr 28, 2014 8:23 AM CT

Outside a Moscow stadium one night in 2006, deputy central bank chief Andrei Kozlov was walking to his car after playing soccer when two men opened fire, pumping bullets into his head and neck and killing his driver.
Days before the murders, the man leading Russia’s fight against money laundering had shut down a scheme used to funnel $1.6 billion of dirty funds abroad, including at least $112 million via Vienna-based Raiffeisen Zentralbank Oesterreich AG, according to Russian and Austrian investigators.
It was a trickle in a flood of illegal outflows that would reach $52 billion in 2012 alone, according to former central bank Chairman Sergey Ignatiev. Such flows are now in the cross hairs of President Barack Obama’s efforts to penalize Vladimir Putin for annexing Crimea and to halt his incursions into Ukraine. Obama signed a law on aid to Ukraine this month that includes a clause that allows the U.S. to go after assets of Russian officials and their allies who are deemed complicit in “significant corruption.”
“This is a declaration of war by the Obama administration on the current governing Russian elite,” Ariel Cohen, senior fellow at the Heritage Foundation, a Washington-based research group, said by phone from New York. “There will be a lot of people potentially targeted.”

Money Game

One possible weapon in this new battle is Dmitry Firtash, 48, the billionaire Ukrainian and major Raiffeisen client who was arrested in Vienna last month on U.S. bribery charges, according to Mark Galeotti, a Russian organized crime expert at New York University who advises regulators on money laundering.
A longtime ally of Viktor Yanukovych, the ousted Ukrainian president who fled to Russia in February, Firtash made his fortune as a middleman in OAO Gazprom’s secretive gas trade with Ukraine, conduit for 15 percent of Europe’s supply and the most corrupt country on the continent, according to Transparency International. He’d be an invaluable asset to the U.S. if he agrees to cooperate because he knows how Russian officials have shifted billions of dollars into banks abroad, Galeotti said.

Financial Warfare: an Alternative to Military Force

“Firtash knows the way the game is played, the way the money is moved,” Galeotti said in an interview in Moscow.
Ignatiev told lawmakers last June that money laundering in Russia, ranked the most corrupt major economy by Transparency International, was so pervasive that fighting it consumed more of his time than formulating monetary policy. In his last address to parliament before stepping down after a decade in the post, he highlighted one network in which 1,173 shell companies channeled $24 billion to foreign banks.

‘Almost Anyone’

About half of all illegal capital flight, including bribes to bureaucrats and revenue from criminal syndicates, “appears to be controlled by one well-organized group of people,” Ignatiev told the Vedomosti newspaper in a rare interview in February 2013, without elaborating. Ignatiev, 66, is now an adviser to his successor, Elvira Nabiullina.
The wording of the new U.S. law is so broad it could apply to “almost anyone” close to Putin, 61, said Masha Lipman, an analyst at the Carnegie Moscow Center who’s co-written academic articles on Putin with former U.S. Ambassador Michael McFaul.
The U.S. today imposed sanctions on 17 Russian companies and seven individuals, including Igor Sechin, CEO of OAO Rosneft, the country’s largest oil producer. That adds to the more than two dozen officials and billionaires penalized last month for being what the Treasury Department called part of Putin’s inner circle.

‘Body Blow’

An agreement to disarm pro-Russian rebels and anti-Russian groups in Ukraine that both countries signed with the U.S. and the European Union is on the brink of collapse. Secretary of State John Kerry said Russia was trying to impose its will on Ukraine by the “barrel of a gun and the force of a mob.”
Russia is already on the verge of recession, so the U.S. can inflict major damage with industry-wide sanctions, according to John Herbst, a former U.S. ambassador to Ukraine.
“Even without European support, U.S. sanctions against the Russian financial sector would deal a body blow to the nation’s economy,” Herbst said by e-mail.

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Bloomberg

U.S. Said to Sanction Seven Russians, 17 Companies

By Daria Marchak, Margaret Talev and Jonathan Allen Apr 28, 2014 7:51 AM CT

The Obama administration will sanction seven Russians and 17 companies, including some involved in the financial, energy and infrastructure sectors, according to a congressional official briefed on the actions.
President Barack Obama said today in Manila that the U.S. is “moving forward with an expanded list of individuals and companies that will be affected by sanctions. They will remain targeted. It will also focus on some areas of high-tech defense exports to Russia.”
European Union representatives have discussed similar penalties, a European Commission spokeswoman said. The announcements of expanded measures came as Gennady Kernes, the mayor of Ukraine’s second-largest city Kharkiv, was shot in the back and rushed to hospital for surgery. It also followed the seizure of international military inspectors by pro-Russian separatists last week.
In the worst confrontation with the U.S. and its European allies since the Cold War, Russia has started military exercises on Ukraine’s border where the North Atlantic Treaty Organization says Putin is massing about 40,000 troops in a potential preparation for invasion. That conflicts with an April 17 agreement signed in Geneva aimed at solving the standoff, according to U.S. and EU officials.

‘Expanded List’

“Later today, there will be an announcement made, and I can tell you that it builds on the sanctions that are already in place,” Obama told a news conference in the Philippine capital Manila today. “We are going to be moving forward with an expanded list of individuals and companies that will be affected by sanctions. They will remain targeted. It will also focus on some areas of high-tech defense exports to Russia.”
The U.S. list may include people inside Putin’s inner circle such as Alexey Miller, chief executive of gas-export monopoly OAO Gazprom and his deputy Alexander Medvedev, as well as Igor Sechin, CEO of oil company OAO Rosneft, according to people familiar with developments.
Representatives of the 28 EU states met to discuss extending a “stage two” black list, spokeswoman Pia Ahrenkilde Hansen said in Brussels today. German Deputy Foreign Minister Gernot Erler said in an interview on ZDF television yesterday he had “the impression” that the EU would extend visa bans and asset freezes to “maybe another 15 people.”

Asset Freezes

“We’ve already taken action, we’ve already introduced travel bans and asset freezes on certain individuals,” U.K. Chancellor of the Exchequer George Osborne said in Paris after meeting his German, French, Italian and Spanish counterparts. “European countries are discussing further such action today following the statement from the G-7.”

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Monday, April 28, 2014