What the Treasury Russian Oligarch list means


Russian President Vladimir Putin toasts with attendees after a state awards ceremony for military personnel who served in Syria, at the Kremlin in Moscow, Russia December 28, 2017. REUTERS/Kirill Kudryavtsev/Pool
President Vladimir Putin toasts with attendees after a state
awards ceremony for military personnel who served in Syria, at
the Kremlin in Moscow


  • As mandated, the US Treasury released a list of
    individuals with financial ties to the Kremlin. It did not
    place more sanctions on them.
  • This may seem limp, but in the world of international
    finance and security, lists like this give players
  • It’s also important to remember that all sanctions
    should come with a plan. If not, they can do more harm than
    good. It’s clear the Trump administration has no plan for
    countering Russian aggression.

Yes, it seems the
US Treasury cribbed
its list of individuals with financial
ties to the Kremlin from Forbes Magazine’s list of richest

And yes, the White House and the State Department have said that
there will be no additional sanctions on Russia, despite the fact
that hours before this Treasury list was released, CIA chief Mike
Pompeo said Russia would doubtless meddle in our elections again.

So yes, it appears the Trump administration released this list
kicking and screaming. It was, after all, mandated
by a law
— the Countering America’s Adversaries Through
Sanctions Act (CAATSA) —
meant to punish Russia
for its meddling in the 2016
presidential election — meddling President Donald Trump still
refuses to fully and unreservedly acknowledge. It is a law he
signed because he had no choice.

In the shadowy world where global finance intersects with
national security, lists are signals to be taken seriously. The
preamble to this list’s release saw the emergence of the DC swamp
things one tends to see when powerful people are under serious
duress. In this case, it was lobbyists
articulating the interests of the Russian elite.

Then after the list was released, Russian President
Vladimir Putin
at once shrugged it off as a joke
while also calling it an
act of aggression. He spun the well-oiled Kremlin wheels of
projection and victimization, its classic defense mechanisms, and
accused the US of using the list to meddle in Russia’s upcoming

But which is it? Is this list mean or meaningless?

Bring it on home

While Treasury made clear these are not sanctions,
financial institutions will be hard pressed to not take note of
this list and evaluate their exposure to those listed,” Boris
Zilberman, a deputy director at the Foundation for Defense of
Democracies told Business Insider in an email.

“Any future sanctions on Putin’s inner circle will very
likely be derived from such a report and as such both financial
institutions, those listed, and the Russian government are likely
be to evaluating defensive measures. [Treasury Secretary Steve]
Mnuchin just actually said that he expects sanctions to come out
of this report, [to be determined], but that’s good signaling for
the financial institutions.”

There is also a classified report included with the list
that should contain more detail that’s for the world of spooks
and politicians. The world of finance will take something
different from this list — a warning to beware of certain

“[The list] will cut off front channels, not back channels,” one
international financier told me after the list was released,
requesting to remain unnamed. 

“Back channels,” the financier said, means that people like him
will be looking more askance at structured investments coming
from Cyprus (a Russian tax haven since the fall of the USSR)
through Geneva, Switzerland. They will see more family office
investments from Zug and Zurich in Switzerland, or from the
Cayman Islands and the Bahamas. There will be investments going
into London through Africa from Geneva-based accounts. Russian
Foreign Direct investment will increase. And there will be more
money flowing toward Singapore, where the only problem is that
the government makes it difficult to take that money out.

This is all to say that the mere creation of a list means that
this particular Russian money making its way around the world
will be longer and more winding.

“One of the counter moves by the Russian Ministry of Finance has
already been [to] put in place mechanisms for Russia’s elite to
repatriate their fortunes through the issuance of Eurobonds,”
Zilberman said. “While Putin has for a while now been seeking for
Russia’s elite to bring home their billions, doing so would
ultimately lessen Russian financial influence in Europe and
beyond. Ultimately a win for the US and EU.”

Doing the least

Now, I’m not saying that the Trump administration did the right
thing with this list here. For one thing, it just so happens
that, because of how the privatization of the USSR went down and
how the country’s economy was reconstructed afterwards, Russia’s
richest people are often inextricably linked to its state.

So the Forbes list was likely somewhat useful by accident of

What I am saying is that it’s possible that the CAATSA was
written by lawmakers who understood the unique challenge of the
Trump presidency — a presidency that has given clue after clue
that it is operating under the influence of Russia, in some

This law was written with the understanding that the Trump
administration will only move against Russia if it has to, and
that (by its very nature) it is an administration that often
tries to look as if it it’s doing the most, while it’s really
doing the least. (See:
Steve Mnuchin’s one-sheet tax plan.

What’s more, it’s also important to remember that sanctions
aren’t something to be thrown around hastily. Last year, Eric
Lorber, now senior adviser to the Under Secretary for Terrorism
and Financial Intelligence at the Treasury, testified about
Russian sanctions before Congress. This was before he took his
post at Treasury, and though hawkish on the need for action
against Russia, he also warned that when sanctions are placed,
they should be with a specific purpose in mind.

“Sanctions are a means to an end, and Congress and the
administration must be clear as to what the end is and how to
achieve it,” he said. “Ramping up economic pressure on Moscow
without clear objectives, the employment of other coercive tools,
or the buy-in from the administration — is unlikely to get Moscow
to change its behavior.”

In short, when it comes to sanctions, there needs to be a plan.
And you can be certain the Trump administration does not have

This is an opinion column. The thoughts expressed are those of the author.

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