Putin nemesis Bill Browder's grade on Russian sanctions: '9.5 out of 10'

Bill Browder has pondered how best to put the squeeze on Vladimir Putin and Russia for nearly 20 years now.

The financier and head of the Global Magnitsky Justice Campaign has been targeted by Putin for over a decade now and, in a new interview with Yahoo Finance Editor-in-Chief Andy Serwer, offered up his grade of where things stand on sanctions so far.

Those sanctions got a failing grade from Browder early on. Before the invasion, he gave the West just a two out of 10 and said the actions risked being too little, too late. But his assessment quickly rose. By the weekend, when the U.S. and its allies removed some Russian banks from SWIFT and targeted Vladimir Putin with sanctions, the grade spiked to “nine and a half out of 10,” he said Tuesday.

The CEO of Hermitage Capital Management lived and invested in Russia for nearly a decade before falling out of Putin's favor in 2005. Four years later Browder's tax adviser, Sergei Magnitsky, testified Russian authorities had tried to steal millions of dollars from Hermitage Capital.

Magnitsky was quickly arrested and died in Russian custody. Browder maintains he was murdered.

His death led to the Magnitsky Act, which then-President Barack Obama signed into law in December 2012 to punish Russian officials responsible for his death. Other countries embraced the law: Browder proudly notes the measure — which focuses on asset freezes and travel bans — became “the basis for which all of future sanctions were modeled on.”

‘There's still some gaps’

The sanctions aren't perfect, Browder says. “There's still some gaps that need to be filled in,” he said. “The most important part of the whole exercise is that Vladimir Putin's own money needs to be hit and his own money is held not by himself, but by oligarchs who look after it.”

The Biden administration said over the weekend the U.S. would collaborate with other countries to hunt down the physical assets of sanctioned Russian companies and oligarchs. As one senior administration official put it, that includes “their yachts, jets, fancy cars, and luxury homes.”

Browder also wants the U.S. and its allies to expand the list of sanctioned individuals “dramatically,” citing reports of oligarchs looking to move their yachts to safe havens. Other reports say oligarchs are hiding assets among family members who may not be subject to U.S. sanctions.

The West should also expel additional Russian banks from SWIFT, the largest global provider of financial messaging services, according to Browder. “They've only done 70% of the banks and so logic would tell you that if 70% banks are disconnected," he said, "they'll just route all the payments through the 30% of the banks that aren't disconnected.”

‘Not as complicated as you think’

Asked about the feasibility of further sanctions, Browder offered assurances.

“It's actually not as complicated as you think,” he said of going after assets. "The way it works in practical terms is a person gets added to the sanctions list [and] once they're on the sanctions list, then it's the legal responsibility of a bank that holds their money to no longer transact with that person.”

Even places like the Cayman Islands — the British territory notorious for harboring wealthy people's assets — may not be safe because the goal of sanctions is simply to freeze the money.

“Guess what, the Cayman islands is a crown dependency,” Browder said. “Britain is really punching way above its weight in terms of its importance in this whole scheme.”

To be sure, Browder said, Russian oligarchs may be able hide some of their assets. But, he added, "Having a person on the sanctions list means that they're pretty much out of the game, they're benched in the international financial world.”

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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