The UK has imposed sanctions on Russian businessman Roman Abramovich, freezing his assets even after he vowed to sell off a major football club and donate the proceeds to victims of the war in Ukraine. The much-needed humanitarian aid is now in limbo amid a Western inquisition against all things Russian.
This is from Kyle Anzalone and Will Porter, “UK Sanctions Russian Billionaire, Barring Him From Aiding Ukrainians,” Antiwar.com, March 10, 2022.
Another excerpt:
In announcing the sanctions, UK Foreign Secretary Liz Truss said “oligarchs and kleptocrats have no place in our economy or society,” and that their “close links to Putin” make them “complicit in his aggression.”
“The blood of the Ukrainian people is on their hands. They should hang their heads in shame,” she added.
However, Truss failed to explain how Abramovich is “complicit” in the Russian invasion. The industrialist – who also owns Millhouse Capital and holds a major stake in the steel and mining giant Evraz – has not endorsed the attack on Ukraine. In fact, in the press release announcing his plan to sell the team and create a charitable foundation for war victims, Abramovich appeared to sympathize with Ukrainians.
Fortunately, Ms. Truss was not around to prevent Oskar Schindler from selling pots and pans to the Nazis.
Note: I’m taking as given the idea that Abramovich is sincere in wanting to help Ukrainians. I could be wrong. But what I found interesting in researching this and finding a lot of denunciations of the guy is that no one who denounced him, at least no one that I could find, addressed the issue of what he planned to use the funds for. Their argument was no more complex than this: Abramovich had a relationship with Putin; Abramovich is rich; Putin probably helped make him rich; therefore we should freeze his assets even if he wants to use them to implicitly go against Putin.
READER COMMENTS
Alan Goldhammer
Mar 12 2022 at 12:55pm
The whole rise of the Russian kleptocacy/oligarchy is complicated with many intersections. One commonality is the role that Putin played when he ascended to the leadership of Russia. All of those who are/were in the Putin inner circle were aware of what was going on back then and throughout the years. They all had opportunities to renounce this but of course would not given that ruthlessness by which Putin pursued his enemies. Better to be alive with billions in ill-gotten gains than poisoned. Abramovich has a long history of trying to buy favor and paper over his past. When England first refused to extend his resident visa several years ago, he quickly sought and was granted citizenship in Israel.
When it appeared things would be closing in, where did he go? Back to mother Russia rather than speaking out. If you believe ill-gotten gains should never be punished it is perhaps easy to sympathize with Abramovich (and others). If you believe justice is finally being served you certainly won’t.
David Hoffman’s fine book, “The Oligarchs: Wealth and Power in the New Russia” is a good place to start. There is also a good article in the New York Times on Abramovich. I look at these financial moves to punish the oligarchs in the same way that the US went after the Sackler family who made billions getting Americans addicted to oxycontin.
Mark Z
Mar 12 2022 at 1:39pm
I’m quite certain David isn’t arguing I’ll gotten gains should never be punished. I certainly can’t speak for him but I’d say punishment should be meted out according to rule of law, rather than politicians exercising discretion according to who they believe is bad or not at that moment. There’s no limiting principle in that. What if other countries decide to confiscate property of American nationals who made money on government contracts or who were friends with or supported politicians responsible for what they see as terrible military endeavors? There have been a few of those in the not too distant past.
David Henderson
Mar 12 2022 at 2:36pm
Thanks, Mark. Although you were right not to speak for me, you did a good job of it anyway. 🙂
Yes, I think the key is the rule of law as there is no limiting principle otherwise. There are people in the United States who got rich off Bush’s invasion of Iraq. Should a government in another country be able to take their wealth?
Alan Goldhammer
Mar 12 2022 at 2:49pm
Unfortunately, during periods of war the rule of law is usually among the first casualties. There is ample documentation from the Panama Papers and other investigative efforts that the oligarchs were laundering money on large scales without fear of retribution. Now that there is a war the ill gotten gains are being confiscated. Clearly it would have been preferable to have laws in place that prevented these people from buying property in countries outside Russia.
David Henderson
Mar 12 2022 at 3:00pm
Thanks, Alan. I’m wondering if you have an answer to the question I asked about Bush and Iraq.
S. F. Griffin
Mar 12 2022 at 6:14pm
https://www.youtube.com/watch?v=WMqReTJkjjg
You have principles, such as the presumption of innocence, the rule of law, and the right to due process, or you don’t.
If you’re in the don’t camp, because you don’t like Putin and Abramovich, then you might want to consider whether you’ve pitched your tent next to theirs.
Mark Z
Mar 12 2022 at 10:01pm
Western countries typically abide by the principle that people can’t be punished ex post factor (laws that incur retroactive punishment are barred by article 1 of the US constitution; it’s more complicated in the UK though). That someone did something that should’ve been illegal when they did it isn’t very good legal grounds for punishing them now for having done it.
Mark Z
Mar 12 2022 at 10:04pm
Thanks, I was thinking the same thing regarding people who profited from the Iraq War. I think foreign seizures in that context would provoke pretty widespread condemnation in the US.
steve
Mar 13 2022 at 12:11am
I would say that if any country had identified an American who made billions of dollars solely due to his relationship with Bush AND they thought seizing some of those billions might stop a war that would kill thousands of innocents should have gone ahead. If they had, and it worked, we would all have been better off.
Steve
Jon Murphy
Mar 13 2022 at 8:22am
Steve-
I’m not sure your answer is helpful in terms of general rules or practicability. The conditions you list are quite strict and would require perfect foresight. Even those problems aside, I do not think they apply to anyone in the real world. Even Russia’s oligarchs have not made their money solely from associations with Putin.
steve
Mar 13 2022 at 8:44am
I agree it was too strict. Lets say significantly due to a relationship with Bush. Regardless, the point is that you are trying to stop a war. Taking money after the fact from those who profited from a war is not done in an effort to stop a war from expanding. It is also likely not aimed at those who helped place the person in power who initiated an aggressive war.
Steve
Jon Murphy
Mar 13 2022 at 9:17am
Even that is quite strict to be practical. And we still have the problem that you require either perfect foresight or that the justification is so vague (one merely needs to “think” that the extra-legal confiscation will stop the war) as to justify all takings.
Whose point? Not the point of the question nor the post.
MarkW
Mar 13 2022 at 8:59am
All of those who are/were in the Putin inner circle were aware of what was going on back then and throughout the years. They all had opportunities to renounce this but of course would not given that ruthlessness by which Putin pursued his enemies.
Are all Russian billionaires in Putin’s ‘inner circle’? How about China? Are there any Chinese billionaires who managed to achieve their success without strong connections to the regime? They’ve all had their opportunities to denounce China’s actions with respect to the Uighurs, Hong Kong, etc, but have not done so. So it seems that in your view, western governments should be freezing and seizing the assets of all Chinese billionaires, no? If not, why not? Going back further, there were governments that disapproved of the American-led invasions of Iraq and Afghanistan and U.S. billionaires and CEOs who did not denounce those invasions. Should the governments that opposed the invasions have felt free to seize any assets those U.S. billionaires or corporations in their countries?
Aren’t we at grave risk here of blowing up the global economic order where individuals and businesses can no longer feel secure in their property anywhere in the world if their home government performs any disapproved action (and they do not mouth the expected denunciations of their government’s actions)? This, to me, feels like a much bigger long-term risk to global harmony, security, and economic cooperation than the Russian invasion of Ukraine (as terrible as it is).
Alex Mazur
Mar 12 2022 at 8:55pm
Modern Russia is not run by oligarchs, it is run by KGB officers. Of course, Abramovich did the Putin’s bidding over the past 20 years, the oligarchs that didn’t ended up as Khodorkovsky (imprisoned for many years, and then exiled during one of the backdoor West-Russian dealings), or Berezovsky (exiled in London, later died under suspicious circumstances). Doing Putin’s bidding is the price of keeping life, liberty, and property. Doesn’t mean he controls the situation in any way or that hurting him will make Putin change his course. (Also doesn’t mean his wealth is legitimately obtained. But it is not like something about that changed in the past few weeks)
Jim Glass
Mar 12 2022 at 11:11pm
Modern Russia is not run by oligarchs, it is run by KGB officers.
Not so much. Here’s an excellent article on who’s running Russia now, in the Financial Times:
https://www.ft.com/content/503fb110-f91e-4bed-b6dc-0d09582dd007
I never thought I’d say such a thing, but the top Soviet Communists (post-Stalin) were more moral than these guys.
Jim Glass
Mar 12 2022 at 11:21pm
I’m taking as given the idea that Abramovich is sincere in wanting to help Ukrainians. I could be wrong.
The Donbas war in Ukraine has being going on since 2014, with war dead, injuries, displaced civilians and all the rest.
Did Abramovich do anything in the last eight years to help those Ukrainians, before he saw these sanctions coming at him? (I don’t know, just asking.)
Mark Brophy
Mar 13 2022 at 11:11am
The Donbas war is a United States puppet government oppressing and killing Russians and is a major motivation that Putin has cited for the invasion, along with the prospect of Ukraine joining NATO. The war could end immediately when Ukraine recognizes the independence of the Donbas and agrees to become a neutral country but that’s unlikely because Biden and Ukraine intend to bleed Russia as much as possible before agreeing to peace.
andy
Mar 14 2022 at 3:17am
The Donbas war, that Putin started, sent there covert russian army, shot down a civilian aircraft… is a United States puppet government oppressing and killing Russians…?
And what about Cinderella?
Jim Glass
Mar 13 2022 at 10:59am
There are people in the United States who got rich off Bush’s invasion of Iraq. Should a government in another country be able to take their wealth?
Abramovich’s wealth is not being “taken”. It is being frozen so it can’t leave the country until allegations against him are investigated. Nothing will be taken from him unless and until he is found liable for such under law.
Specifically as to Abramovich:
What Happens To Sanctioned Oligarchs Assets?
Don’t worry about Roman’s rights, he’ll have the most expensive lawyers in London looking after them.
BTW, Abramovich reportedly is the person who advised Yeltsin to pick Putin as his successor.
xxx
David Henderson
Mar 13 2022 at 12:29pm
You wrote:
Thanks for the correction. So it’s kind of like RICO, which does undercut the rule of law.
Jim Glass
Mar 13 2022 at 5:31pm
So it’s kind of like RICO, which does undercut the rule of law.
You puzzle me. Breaking this down … Mr. Wrongdoer steals $500k from, say, Medicare (notable greedy doctor real case) or maybe from you, whoever. The money is in his bank account. If he is convicted of the crime he will have to return the money to its rightful owner. I presume you agree there’s nothing undercutting the rule of law in that.
Ah, but before the trial he can easily transfer the money to nobody knows where, enriching himself when he gets out of jail at the cost of his victim.
Thus, if a grand jury determines there is probable cause that the money in the account is the proceeds of a crime, the government can freeze the account until a court rules on the matter.
This has nothing at all to do with RICO and is routine – you can see it in episodes of Law & Order. Is there anything undercutting the rule of law in it?
That’s the basic principal here. Now you may argue that governments are going beyond this to harass Abramovich (& Co) with special new “RICO-like” rules. Well, Yeah!
But remember his legal rights will be fully protected by the most expensive lawyers in the world. And Abramovich was one of the first biggest looters of the ruins of the Soviet state, stealing billions from the Russian people, which is why he was Yeltisn’s Putin-picking confidant.
Maybe the harassment will prove wrongful if it is ultimately found he committed no crime, because back then there was no law to break, or as Prendergast of Tammany Hall put it, ‘we write the law so we can’t break it’.
But even if so, if I were making a list of 50 innocent people who most deserved sympathy for being unfairly harassed by the gov’t, he’d be about 10,000th.
BTW, in the real case Greedy Doctor couldn’t use the frozen money even to hire a lawyer. If they do that to Roman and he has to resort to Legal Aid maybe I’ll have some sympathy for him.
Jon Murphy
Mar 13 2022 at 6:06pm
Note Bene, Jim Glass, the important difference between your Mr. Wrongdoer and Abramovich: Wrongdoer was changed with a crime and it was reasonable to suspect that funds ill-gotten from that crime would be moved beyond the reach of the law. Abramovich has not been charged with a crime.
Vivian Darkbloom
Mar 13 2022 at 1:19pm
“So it’s kind of like RICO, which does undercut the rule of law.”
This seems to echo your earlier post here:
https://www.econlib.org/the-first-casualty-in-war/
which I didn’t respond to. However, I was a bit puzzled by that earlier post, as well as I am by this one; that is, what, exactly, are you referring to with respect to “the rule of law”. Are you arguing that asset forfeiture laws are “illegal” (RICO and otherwise) or that they *should be* illegal? Or that these laws are not being enforced consistently to everyone?
As to the “illegality” point, these laws were passed by Congress and signed by the President, so I can only imagine that the objection is that they are per se unconstitutional despite the failure of courts to so determine them to be. But, haven’t the courts had sufficient opportunity to examine the per se constitutionality of those laws? Or, perhaps your argument is that you don’t agree with the courts on the constitutional issue or that while these laws, are “legal”, Congress should never have enacted them or is it that the law is not constitutionally applied in the specific case of Abramovich?
David Henderson
Mar 13 2022 at 4:08pm
Good questions, as always.
You asked:
I’m arguing that they should be illegal. I put more content in the rule of law than just that all laws are enforced. If the government took someone’s house because it suspected that the house was used for illegal purposes, I would regard that as a strong violation of the rule of law.
You wrote:
Yes, I think they’re unconstitutional. Yes, the courts have had sufficient opportunity to examine them. I don’t know if they have examined them, but if they have and have found such laws unconstitutional, I think they’re mistaken.
And yes, I think Congress should never have enacted them.
But all this is somewhat beside the point, because we’re talking about Britain and not the U.S. That’s why I said it’s like RICO. I don’t know what laws Britain has on this.
Gregory F Rehmke
Mar 13 2022 at 2:17pm
I wish we knew more about the failed might-have-been oligarchs. When Soviet industries were privatized there was a mad dash to secure ownership. Those with connections and skills to fight off others fighting for same assets ended up with… With what? Valuable productive factories and mines and oil wells? Skilled labor eager to work hard to modernize? The trick was to bring in expertise and capital from developed economies and at the same time fend off efforts by others with connections trying to take one’s newly private assets though legal or other means. When were threats and violence self-defense and when just force and violence? And, these assets have to be managed well enough to compete against other firms. It would be nice to have a list of the many hundreds with Soviet and even KGB connections who failed in business after getting control of any of the thousands of money-losing Soviet factories, mines, other enterprises.
John m moore
Mar 14 2022 at 12:58am
Clearly, if he offered to sell the Chelsea franchise and agreed to a process to distribute the proceeds to designated war victims, that should be done. But I am suprised that the UK has not provided a legal basis to confiscate his property. Am I missing the precise laws that grant the government that power?
Knut P. Heen
Mar 14 2022 at 7:25am
Not letting English football fans watch Chelsea play football is not a very effective way to stop the war in the Ukraine. Virtue signaling is apparently the only game in town these days.
Jim Glass
Mar 15 2022 at 9:14pm
Not letting English football fans watch Chelsea play football..
Not only can the fans still watch Chelsea football as much they wish, the law specifically lets them buy beer at the game! — even though that is doing business with a sanctioned party!
I am surprised that the UK has not provided a legal basis to confiscate his property.
Why do people keep insisting that property has been confiscated? Nothing has been confiscated. Assets have been frozen so they can’t be moved pending investigation. As I noted in my example above, you can see this in episodes of Law & Order it’s so uncommon and outrageous. I guess people don’t want to watch the video above “What Happens To Sanctioned Oligarchs Assets?”
Save bandwith referring to this:
Confiscating a Russian oligarch’s luxury condo requires much more than political bluster
Gosh, justice for Oligarchs as much as for any defendant on L&O.
People here seem to be confusing asset freezes with “civil forfeiture” which can involve horrible abuses. Right now there is a sheriff in California who’s loose seizing armored cars full of innocent business’s money right off the highway. THAT’s what y’all should be protesting! Russian Oligarchs have far more protection for their property under the law than do innocent small businesses in CA.
And I am frankly perplexed about how libertarian types who want to fight government abuse of power choose as their poster-boy victims these Oligarchs who used their power over corrupt government to loot their nations of mega-billions. If that’s not abuse of government power what is?
Beyond that, just for the rhetorical effect on the public. It’s like protesting the abusive power of the IRS by saying “Look what they did to Al Capone!”
Jim Glass
Mar 16 2022 at 3:15pm
Update: Good news!
Abramovich’s $1.3 billion worth of super-yachts have gotten away and sailed to freedom. He won’t be needing Legal Aid.
No sign of any contribution towards relief for Ukraine, yet.
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