The Russian members of the Forbes list are worried about the Countering America’s Adversaries Through Sanctions Act that U.S. President Donald Trump signed into law on Aug. 2, 2017. By “adversaries” it means Iran, Russia, and North Korea.
The Act stipulates that the U.S. Treasury Department, Director of National Intelligence, and the Secretary of State have 180 days — that is, until approximately February 2018 — to present a detailed report on Russian “oligarchs” and senior officials involved in Russia’s foreign policy to a special committee of the U.S. Congress.
The document indicates that anyone whose name appears on the list could be targeted with personal sanctions. Such sanctions typically prohibit individuals from entering U.S. territory, freeze their assets, and ban them from doing business with U.S. citizens and companies.
Who’s at Risk?
We spoke with dozens of Russians on the Forbes list. Almost all of them were aware of this provision of the law and admitted that they were doing everything possible to keep their names off the list.
One individual said that it had been necessary to fly to Washington to get a clearer picture of the situation. But, the person said, the journey had not been fruitful.
“Nothing is clear: no one is working on these sanctions and no one is drawing up the list of who will be included,” he said, adding that even local lobbyists were unable to uncover anything more about the process.
“The sanctions will not be based on any particular criteria or sources of information.”
Although the Act does not mention any specific names, Russia’s business community agrees that metals tycoon Oleg Deripaska is most at risk.
His name has come up repeatedly with the U.S. authorities, especially concerning his communications with former Trump campaign manager Paul Manafort. Deripaska’s representatives did not respond to inquiries from journalists.
The Alfa Group headed by Mikhail Fridman is also at risk. That business is mentioned in the scandalous dossier of former British intelligence officer Christopher Steele that was published in BuzzFeed last year.
It states that the Alfa Group allegedly carried out Putin’s orders and helped interfere in U.S. elections. Alfa Group is currently suing BuzzFeed and the parties that ordered the dossier, demanding that they refute the inaccuracies it contains.
The media have often pointed to Alisher Usmanov and Roman Abramovich as the two businessmen with the closest ties to Vladimir Putin. Their representatives declined to comment.
An assistant to one Russian businessman explained that not only are the people on the Forbes Top Ten are at risk, even those whose names have appeared only a single time in medias rankings of major government contractors will have trouble sleeping easily.
During the Obama administration, Russian businesspeople could obtain answers to their sanctions-related questions from State Department sanctions policy coordinator and Atlantic Council expert Daniel Fried. However, he resigned immediately after the elections and, as of July, his post remained vacant.
“It’s unclear who to consult now,” said one Russian businessperson on the Forbes list.
Another added: “I see it this way: the Americans are telling us to take our problems to Putin and to leave them alone.”
The Russian authorities are well aware that large businesses could have problems. Approximately two years ago, President Putin gathered Russia’s major businesspeople for a meeting at which he warned them of the risk of personal sanctions, one participant of that meeting said.
Another participant said that, even then, Putin saw what was coming and issued instructions on what precautions they could take. Presidential spokesman Dmitry Peskov did not respond to journalist’s questions on the subject.
What might be in store for the oligarchs and their businesses?
According to the text of the Act that President Trump signed, by February 2018 the U.S. authorities must accomplish the following:
— Identify the circle of senior officials involved in foreign policy and oligarchs with close ties to the Russian authorities;
— Determine their relationship to Vladimir Putin and members of the Russian ruling elite;
— Determine whether those individuals are involved in corrupt actions;
— Estimate the amount of wealth and the sources of income of those individuals and their family members – spouses, children, parents, and brothers and sisters, including their assets, investments, and any other business interests and significant share holdings they have in any companies anywhere;
— Determine whether they have business relations and assets outside of Russia;
— Assess the potential impact imposing sanctions against these “oligarchs,” state-owned and partially state-owned companies would have on those entities themselves, and on the economies of Russia, the U.S., and U.S. allies.
— Determine the potential impact of imposing secondary sanctions against Russian oligarchs. (Secondary sanctions are especially odious because they carry force beyond U.S. territory. Anyone winding up on that “blacklist” would find themselves unable to obtain financing not only from U.S. banks, but also from European financial institutions.)
What are the consequences?
The imposition of sanctions against a particular businessperson does not necessarily mean that his or her entire business would be affected automatically, explained Moscow State University International Law Professor Ilya Rachkov.
However, sanctions targeting individuals and those against businesses usually go hand in hand.
In any case, any major businessperson placed on such a “blacklist” faces enormous risks. First, the U.S. and European authorities try to keep up with each other on the issue of sanctions. Second, the U.S. authorities strictly monitor compliance with secondary sanctions worldwide, and those found in violation of the rules can face heavy fines.