Trading favors with Putin: Here's why the EU sanctioned 15 Russian oligarchs

Russian President Vladimir Putin (R) speaks as billionaire and businessman Roman Abramovich (L) looks on during a meeting with top businessmen
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  • The EU has highlighted Russian oligarchs' ties to President Putin in a special report on sanctions.

  • It says Roman Abramovich has "close ties" to Putin, and German Khan traded favors with him.

  • The EU said it sanctioned attendees of a "meeting of oligarchs" the day Russia invaded Ukraine.

The European Union last week sanctioned 15 Russians — 14 men and one woman — as it broadened a crackdown on the country's elite in the wake of the Ukraine invasion.

In a report announcing its decision, the EU detailed its reasons for sanctioning these individuals. Fundamentally, it said the oligarchs' relationships with Russian President Vladimir Putin had been key to their power and wealth.

It described some as "benefitting from Russian decision-makers responsible for the annexation of Crimea or the destabilisation of Ukraine," accused others of supporting "actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine," and said some were "leading business persons involved in the economic sector which provides a substantial source of revenue" to the Russian government.

Here's what the EU had to say about the individuals it sanctioned.

Roman Abramovich, 55

Roman Abramovich, owner of Chelsea smiles following his team's victory during the UEFA Champions League Final between Manchester City and Chelsea FC
Abramovich has been trying to sell his London football club, Chelsea FC, since he was sanctioned.Alexander Hassenstein/Getty Images

Abramovich, owner of Chelsea Football Club in London, UK, has "long and close ties" and "privileged access" to Putin, with whom he has "maintained very good relations," the EU report said.

It added that this connection has helped Abramovich, whose net worth is put at $13.9 billion by Bloomberg's Billionaire Index, "to maintain his considerable wealth."

The EU report also notes he's a major shareholder of the steel group Evraz, which is one of Russia's largest taxpayers.

German Khan, 60

TNK-BP executive director German Khan, foreground left, signs papers, accompanied by Russian President Dmitry Medvedev, background right, and Venezuelan President Hugo Chavez, background left.
German Khan.Mikhail Klimentyev/RIA-Novosti/AP

Khan quit the board of German oil company Wintershall Dea on March 15 after being sanctioned. The EU report said he had a "close relationship" with Putin and "continues to trade significant favours" with him.

The report also said Alfa Bank, of which Khan is one of the main shareholders, received "benefits" from this relationship between the two men.

As with Abramovich, the EU said Khan provided a large source of revenue to the Russian government.

Alexander Mikheev, 61

Alexander Mikheev, a General Director of Russian Helicopters attends the 9th annual HeliRussia-2016 helicopter exhibition, held at Crocus Expo, Moscow, Russia.
Alexander Mikheev at a helicopter exhibition in Moscow in Images Group via Getty Images

Mikheev is CEO of Rosoboronexport, a subsidiary of the state-owned defense conglomerate Rostec, which the EU said "owns several production facilities which play an instrumental role in the deployment of those technologies into operation on the battlefield."

Sales of weapons are a critical source of revenue for the Russian government and can "advance Russia's economic and strategic objectives," the EU said in its report.

Alexey Kuzmichev, 59

Alexey Kuzmichev, chairman of Russian investment company A1 advisory committee, attends a news conference in Moscow April 3, 2013.
Alexey Kuzmichev, chair of a Russian investment company, in Moscow in 2013.REUTERS/Sergei Karpukhin

Kuzmichev is a major shareholder of the Alfa Group conglomerate and "one of the most influential persons in Russia," the EU report said.

It noted his "well-established ties" to Putin and said the Russian president had rewarded what it described as Alfa Group's "loyalty to the Russian authorities" with "political help" to its foreign-investment plans.

The Alfa Group includes Alfa Bank, which funded a charity project run by Putin's eldest daughter, Maria, the EU report said.

The report said Kuzmichev was associated with Khan and Mikhail Fridman and Petr Aven, two former board members of Alfa-Bank.

Viktor Rashnikov, 73

Russian billionaire and businessman Viktor Rashnikov attends the Congress of RSPP (Russian Union of Industrialists and Entrepreneurs) at Ritz Carlton Hotel on March 14, 2019 in Moscow, Russia.
Billionaire Russian businessman Viktor Rashnikov in Moscow in 2019.Mikhail Svetlov/Getty Images

Rashnikov is owner and chairman of Magnitogorsk Iron and Steel Works, one of Russia's biggest taxpayers, the EU report said. "The tax burden on the company increased lately, resulting in considerably higher proceeds to the Russian state budget," the report said.

MMK said in a statement Friday that the sanctions were "groundless and unfair," per Bloomberg.

Marina Sechina, 60

Skeleton at the Sanki Sliding Centre during the 2014 Sochi Olympic Games in Krasnaya Polyana, Russia.
The skeleton event at the 2014 Sochi Olympic Games in Krasnaya Polyana, Russia.Andrew Milligan/PA Images via Getty Images

Sechina, the only woman among those sanctioned, owns businesses that participated in the preparation of the Winter Olympics in Sochi in 2014, the EU report said.

It alleged that one company, Stankoflot, "receives contracts without tender" from Rostec, the state-owned defense conglomerate.

Sechina owns a stake in RK Telekom and is the former wife of the previously-sanctioned Igor Sechin, CEO of the Russian state-controlled oil giant Rosneft, the report noted.

"She has used connections with various actors in the Russian government and Russian business structures, including with her former husband, for personal benefit," the report said.

The "meeting of the oligarchs"

Vladimir Putin and Alexander Shokhin
Putin with Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, in Moscow in 2017.Sergei Ilnitsky/AP Photo

Central to the EU's reasoning for imposing the sanctions was what it called a "meeting of oligarchs" that Putin held on February 24, the day Russia invaded Ukraine. The meeting involved discussion of how to respond to Western sanctions.

Alexander Shokhin, the president of one of Russia's biggest business groups, was said to have used the meeting to urge Putin to seek to avoid economic fallout from the war. Shokhin was among the attendees sanctioned by the EU.

Other sanctioned attendees were Andrey Ryumin, executive director of the Russian power company Rosseti; Suleyman Kerimov, owner of Nafta Moscow; Tigran Oganesovich Khudaverdyan, head of tech firm Yandex; and Vladimir Rashevsky, CEO of EuroChem Group.

The EU said in its report that attendance of this meeting alone showed each person was "a member of the inner circle of oligarchs close to Vladimir Putin."

It went on to say the people were backing policies that "threaten the territorial integrity, sovereignty and independence of Ukraine."

It accused Yandex, which it described as specializing in "intelligent products and services powered by machine learning," of hiding information from Russians about the war.

"The company has been warning Russian users looking for news about Ukraine on its search engine of unreliable information on the internet, after the Russian Government threatened Russian media over what they publish," it added.

In response, Khudaverdyan stepped down from Yandex, which said in a statement that it was "shocked and surprised to learn that Tigran was designated under EU sanctions" and was "extremely sorry" to see him leave.

Shokhin responded Wednesday, saying the sanctions were "expected" because Brussels made it clear it was targeting those who attended Putin's meeting.

EuroChem issued a statement Wednesday announcing Rashevsky had "resigned in order to allow the company to continue running smoothly," adding this was "despite the groundlessness" of the EU's actions.

The EU designated sanctioned media figures as "propagandists"

Russian President Vladimir Putin (L) speaks with film producer and Channel One CEO Konstantin Ernst (2ndR) during a meeting with the crew of The Viking film based on the Primary Chronicle, on December 30, 2016 in Moscow.
Konstantin Ernst, second right, meeting with Putin in Moscow in 2016.MIKHAIL KLIMENTYEV/SPUTNIK/AFP via Getty Images

Four media figures — Armen Gasparyan, Artyom Sheynin, Dmitry Kulikov, and Konstantin Ernst — were sanctioned by the EU.

The EU report said Sheynin, a host on the state-controlled Channel One, claimed Russia's operation in Ukraine was "inevitable" and would force Ukraine to maintain peace. The document also said he "promotes ethnic hatred between Ukrainians and Russians."

The report said Gasparyan, who hosts a show on the Russian media outlet Sputnik and a radio show on Vesti FM, "continues to publish pro-Russian propaganda related to the Russian invasion of Ukraine and actively denies Ukraine's sovereignty."

The EU also said in the report that Kulikov, a film producer and radio host, had "made public comments on state-owned TV channels in line with the Kremlin's narrative on the situation in Donbas region."

It also said Kulikov "justified the actions of Russian authorities threatening the integrity and territorial sovereignty of Ukraine."

The report said Ernst, who is CEO of Channel One, was responsible for "organising and disseminating anti-Ukrainian propaganda of the Russian authorities."

He has also received various prizes from the state, such as a medal awarded to participants in Russia's military operation in Syria, the "Order of Friendship," and an award "For Services to the Fatherland," the report said.

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