The calls came from New York and Miami, two hotspots popular with wealthy Russians, in what could be a sign of what could be a quick sell-off for luxury homes, beachfront properties and apartments on the city skyline as Russians struggle to stay ahead of the international sanctions.
“These people are called by curators,” Elliot said of the Russian owners. They asked, “If I had to sell, how quickly could you sell it and how quickly could you sell it?”
“It’s interesting how the tentacles go,” he noted. “Perhaps this is the start of a fight.”
The impact of the coordinated sanctions from the US, the UK and the European Union has shaken the Russian elite as the oligarchs, some targeted and others moving in anticipation of what might happen, look to relocate yachts, lose assets and adjust to the wave of sanctions. which were introduced faster than usual and have become more ambitious than before.
Russian billionaire Roman Abramovich, who has not been sanctioned, announced on Wednesday that he would sell the Chelsea Football Club because it is “in the interests of the club, fans, employees, as well as the club’s sponsors and partners.” He said the net proceeds from the sale would go to a fund set up to help “victims of the war in Ukraine.”Russian billionaires Mikhail Fridman and Oleg Deripaska have cut ties with the Kremlin and called for an end to Russia’s war in Ukraine. Last week, the EU announced sanctions against Friedman, while Deripaska has been on the US sanctions list since 2018.
“This is a very disturbing moment if you are a Russian billionaire,” said former State Department official Max Bergmann. “Lawyers are now busy trying to figure out how to remove oligarchs from the boards of various companies and how to get rid of assets in the United States.”
“We get a new request every hour,” said Erich Ferrari, a lawyer representing foreign companies and individuals in the sanctions review. “Phones are ringing off the hook to people around the world who are sanctioned or have their parent company sanctioned.”
Financial institutions in jurisdictions where there are no sanctions, such as the United Arab Emirates, are following the lead of the US and the European Union and freezing Russian accounts, Ferrari said. Ferrari added that some Caribbean countries where Russian-controlled entities have placed offshore companies to ensure secrecy will no longer serve as corporate secretaries for such entities, leaving many of them unable to operate.
“I don’t recall a program” of international sanctions, Ferrari said, “that would have “stupefied everyone.”
The brawl began after the White House announced on Thursday a total blocking of sanctions against eight members of the Russian elite, as well as their families and associates. All of them will be blocked from the US financial system, which means that their assets in the United States will be frozen and their property will be blocked for use.
“It caused a sudden panic,” Bergmann remarked, “because the old guard class, I think it’s rather interesting, didn’t know what it was. [invasion] was approaching and I think they were surprised that (Russian President) Vladimir Putin ended up deciding to invade.”
Bergmann explained that the oligarch could eventually sue to try to stop the sanctions, but in the short term these Russian billionaires sell out and leave.
“What you are already seeing is that the oligarchs are going crazy about this and moving their yachts to places where they cannot be extradited,” Bergmann said. “We have seen yachts go to Montenegro, where there is no extradition treaty.”
On Wednesday, French officials seized a yacht they said was linked to Igor Sechin, a sanctioned Russian oil executive and close associate of Putin, as she prepared to leave port. But the company that runs the ship denied that Sechin was the owner. tweet Thursday: “We are still waiting for the US government to put a wide range of oligarchs associated with Putin on the sanctions list. This is a prerequisite for taking over the ultra-luxury homes that many own in Manhattan. We need to act on this NOW. “The Biden administration is not just imposing sanctions. On Wednesday, the Justice Department unveiled a new task force: KleptoCapture. The task force will bring together prosecutors with experts in sanctions, money laundering and homeland security to investigate the possible criminal activities of super-rich Russians who the US government believes support Putin.
“We will leave no stone unturned in our efforts to investigate, arrest and prosecute those whose criminal acts allow the Russian government to continue this unjust war,” Attorney General Merrick Garland said when announcing the new task force.
Experts monitoring the actions of several government agencies, most notably the Treasury and Justice Departments, believe the level of coordination is unprecedented and signals a determination to pursue these oligarchs and any illegal activity with renewed vigor.
“It can take quite a lot of effort on the part of prosecutors and regulators to impose sanctions on extremely wealthy people with large resources,” said Edward Fishman, the former head of the State Department for Russia sanctions. “The creation of this high-level task force, which is clearly controlled by some of the most senior officials in the Biden administration, I think it signals that they are going to apply these sanctions quite aggressively.”
Many oligarchs use shell companies to hide their property, leaving the authorities to unravel a whole layer of companies before discovering the true owner.
“One of the reasons we haven’t seen a lot of lawsuits is that these oligarchs are extremely wealthy, and while many of them commit white-collar crimes, they hire very expensive lawyers to get them right,” Bergmann said. former State Department official.
“What the oligarchs have done is just make it so that law enforcement doesn’t have to waste time chasing them,” Bergmann said. “And what Biden said is no, no, no, we’re going to find the time, and we’re going to dedicate assets, and we’re going to dedicate people to really start opening books, knocking on doors. , and see what we find.”
Experts warn that this could eventually lead to turmoil in Russia. “One of the problems for Putin is that he has a very angry class of people, very rich and powerful, who are all going back to Moscow and St. Petersburg and they don’t want to be there,” Bergmann said.
One possible area of vulnerability for Russians in the US is the millions of dollars that Russian oligarchs have invested in property in New York, Miami and elsewhere.
Elliott of Nest Seekers International said rich Russians are smart and predicted: “These guys are going to be liquidated because they are smart. 80% of something is better than… nothing.”
Time is of the essence for some Russians who are not currently under sanctions but may fear they will be next.
“Today, there is nothing illegal about liquidating your assets,” Elliott said.