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  • By The Financial District

Expert Doubts Effectivity Of Sanctions vs Russian Oligarchs

“From the outset of Russia’s war on Ukraine, Western nations, led by the United States, have used sanctions as the primary way of punishing Vladimir Putin. This effort has targeted Russia’s central bank reserves, its defense industry, and many individuals in Putin’s inner circle: The oligarchs,” New York Times world and national security editor Yara Bayoumy wrote.

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One rationale for going after these prominent individuals is that the more they’re feeling the squeeze, the more likely they are to put pressure on Putin to end this war. That thinking is flawed, argues Eileen O’Connor, a former journalist, and attorney who worked in Russia and Ukraine, in an essay for the New York Times.

“In Western capitalist democracies, wealth often equates to access and influence. So it’s not surprising that many believe that sanctioning oligarchs can move them to pressure Putin to change course. That is a miscalculation. These oligarchs may hold wealth that connects them to power and can be used by Putin, but in Russia, that does not mean that they wield any power over him or those in the Kremlin,” O’Connor writes.

O’Connor describes how, in the 1990s, she witnessed former Communist Party officials amass wealth through the privatization of state assets. Those who then showed loyalty and supported Boris Yeltsin’s political campaign became even richer. “Today they remain the richest men in Russia. But the lack of properly defined property rights and a legal and institutional framework to protect them meant these oligarchs still depended on the Kremlin,” O’Connor added.

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"Putin has also demonstrated what happens to those oligarchs who do dare oppose him. Mikhail Khodorkovsky, who was once the wealthiest man in Russia, was stripped of his assets by Putin and imprisoned for a decade; he now lives in exile. That explains why so few oligarchs are criticizing Putin now. And if they’re doing so, they’re doing it from outside Russia. The only people who can truly sway Putin are ideologues who share his views, the so-called siloviki. The word literally means people with force,” O’Connor writes. “To influence them, the West must prioritize the things that they believe give Russia its superpower status: its oil and its military.”

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