G7 considers letting Russian oligarchs buy back sanctioned assets

G7 considers letting Russian oligarchs buy back sanctioned assets
/ Image: Wikimedia Commons.
By Theo Normanton May 28, 2022

Canadian Deputy Prime Minister and Minister of Finance Chrystia Freeland has suggested that Russian billionaires could pay to have sanctions against them lifted. Freeland raised the idea at a meeting of G7 finance ministers in Germany, adding that the funds raised could be put towards rebuilding war-damaged towns in Ukraine.

Since Russia invaded Ukraine on February 24, western nations have imposed successive rounds of sanctions against Russia. In addition to politicians, high-profile sanctions targets have included oligarchs who made billions in the sell-off of state assets after the collapse of the Soviet Union. Many have had their assets frozen and face bans on travelling and doing business in the West.

Some politicians have endorsed the idea of using frozen Russian assets to rebuild Ukraine. However, there is a risk that western courts could overrule governments if they attempted to divert Russian assets to Ukraine. The strategy proposed by Freeland could enable some sanctioned money to be given to Ukraine while reducing the risk of a legal challenge.

The proposed solution would also enable oligarchs to distance themselves from the Putin regime by voluntarily putting money towards the reconstruction of Ukraine. The European Commission alone estimates that it has frozen over $10bn from over 30 oligarchs.

Having worked at the Moscow bureau of the Financial Times, Freeland knows some Russian oligarchs. She reportedly raised the strategy after one oligarch suggested it to her. Freeland has Ukrainian heritage, so is well placed to raise the contentious proposal.

AP cites an official present at the G7 meeting who says that Ukraine does not oppose the idea.

Former Chelsea owner Roman Abramovich was allowed to sell the football club this week on the condition that net proceeds from the sale were donated to victims of the war in Ukraine. Sanctions imposed on Abramovich by the UK meant that his ownership of Chelsea was frozen, and the club was no longer able to sell tickets and merchandise.

The model proposed by Freeland would share many of the advantages of that employed for the enforced sale of Chelsea FC: in return for the ability to salvage some of their overseas assets, oligarchs voluntarily help to alleviate the humanitarian catastrophe in Ukraine while also distancing themselves from Putin.