Originally Syndicated on May 18, 2023 @ 8:41 am
The US-sanctioned Russian oligarch Vladimir Potanin, a nickel tycoon has mostly avoided Western repercussions during the Ukraine conflict, while other Russian billionaires have faced a torrent of sanctions.
Vladimir Olegovich Potanin, a Russian businessman, is worth $1 billion. Vladimir Potanin made his fortune in the early to mid-1990s as a result of Russia’s disputed loans-for-shares scheme.
According to the Bloomberg Billionaires Index, Vladimir Potanin was the 38th richest person in the world and the richest individual in Russia as of August 2022, with an estimated net worth of $24.4 billion. Mikhail Prokhorov was his longstanding business partner until they split up in 2007. They subsequently transferred their joint assets to Folletina Trading, a holding company, until an asset partition agreement was reached.
Vladimir Potanin was one of 210 people named on the US Treasury’s “Putin list” in January 2018 as having a close relationship with Russian President Vladimir Putin. Vladimir Potanin was sanctioned by the United Kingdom in June 2022 for being one of the top oligarchs in “President Vladimir Putin’s inner circle.
Sanctions
The United States sanctioned Russian tycoon Vladimir Potanin, a nickel mogul who has largely evaded Western repercussions during the Ukraine conflict while other Russian billionaires have faced a barrage of penalties.
- The UK government authorized it in connection with the Russo-Ukrainian War in 2022.
- Vladimir Potanin was added to the list of sanctioned countries on April 6, 2022, in response to Russia’s invasion of Ukraine.
- On December 15, 2022, the US Treasury placed Potanin on its list of prohibited substances, joining other countries.
- The actions, announced jointly by the US State and Treasury Departments, freeze all of Potanin’s US assets and prevent him from entering the country.
- According to our calculations, Potanin is the second-richest Russian, thanks to his roughly 33% share in Norilsk Nickel, one of Russia’s ten largest publicly traded corporations.
- The US also sanctioned Potanin’s investment firm Interros and Rosbank, which Interros purchased in April, while Norilsk Nickel avoided sanctions, possibly to avoid upsetting world nickel prices.
- Potanin’s $120 million boat Nirvana was also classified as prohibited property by Secretary of State Antony Blinken, potentially for another high-profile seizure of an oligarch’s yacht.
Key Background
Vladimir Potanin was sanctioned by the United Kingdom in June, but the European Union has yet to issue any sanctions against the billionaire. On Wednesday, the Wall Street Journal reported on the United States’ plans to penalize Potanin. In April, Interros purchased a 35% share in Tinkoff Bank, replacing Oleg Tinkov, one of the few oligarchs to denounce the invasion of Ukraine. Nickel prices reached all-time highs this spring as investors worried about the impact of sanctions on Norilsk Nickel, the world’s largest nickel miner.
Forbes Estimation
Vladimir Potanin is estimated to be worth $26.4 billion, making him the world’s 51st wealthiest person.
What the quote below said:
We see Vladimir Potanin not only as the dealmaker but also as the consummate political insider in Russia,” Stanislav Markus, a professor at the University of South Carolina with expertise on Russian oligarchs, told Forbes in April as Potanin, a long-time ally of Russian President Vladimir Putin, purchased assets impacted by international sanctions against Russia and its wealthiest individuals.
About Vladimir Potanin
Vladimir Potanin, one of Russia’s wealthiest businessmen, has been placed on a US sanctions list. Here are some key facts about the individual, his holdings, and his career.
Vladimir Potanin is the president and significant shareholder of Nornickel, the world’s largest producer of refined nickel and palladium. His holding firm Interros, which was also sanctioned, owns 36% of Nornickel and is a prominent player in the international industrial metals market. Nornickel was the top producer of refined nickel, which is used to make stainless steel and is essential for electric vehicle batteries, in 2021. It also recovered 40% of the palladium and 10% of the platinum utilized in automotive exhaust systems. The American action did not directly target Nornickel.
Vladimir Potanin, the son of a senior Soviet trade official, received his education at Moscow’s prestigious diplomatic institution. He belonged to a class of businesspeople known as “oligarchs” who gained vast fortunes by acquiring significant state properties during a botched privatization initiative in the 1990s. The names of his wife and daughter were also included in the Treasury Department’s notice of penalties.
Vladimir Potanin has been embroiled in a long-running battle with another metals oligarch, Oleg Deripaska. Although he indicated in September that this was on hold, in July he suggested a $60 billion merger of Nornickel and Rusal, both of which were previously owned by Deripaska.
Vladimir Potanin has worked hard to retain strong relations with President Vladimir Putin, as seen by his acceptance of a $2 billion fine after Nornickel infuriated him two years ago by causing the worst oil spill in Russian history in the Arctic.
Vladimir Potanin cautioned authorities not to take the assets of foreign firms leaving the country following Russia’s invasion of Ukraine and the imposition of Western sanctions against it. His warning was largely taken seriously. He warned that such a move would isolate the country, much like the 1917 Bolshevik Revolution, and undermine investor confidence for decades.
It did not, however, deter Vladimir Potanin from making aggressive acquisitions of established enterprises. Within 10 weeks of the war’s start, he had bought Societe Generale’s Rosbank, Global Payments’ Russian division, and 35% of TCS Group Holding, the owner of an online bank. The latter was obtained from the company’s founder, Oleg Tinkov, who had opposed the invasion and alleged that the Kremlin pushed him to make a “fire sale” to Potanin. Rosbank was also included in the fines imposed on Thursday.
About Norsnickel
Norilsk Nickel, or Nornickel, is a company that mines and smelts nickel and palladium. Its main operations are in northern Siberia’s Norilsk-Talnakh region, near the Yenisei River. It also has holdings in South Africa, Harjavalta in western Finland, and Nikel, Zapolyarny, and Monchegorsk on the Kola Peninsula.
Norilsk Nickel, headquartered in Moscow, is the world’s 11th-largest copper producer and the world’s largest producer of refined nickel.
The company is a MICEX-RTS listed company. As of March 2021, the company’s major shareholders were Oleg Deripaska’s Rusal (27.82%) and Vladimir Potanin’s Olderfrey Holdings Ltd (34.59%).
Norilsk Nickel made a $12 billion share repurchase offer for Rusal’s 25% stake in the firm in December 2010, however, the offer was rejected. Potanin’s Interros holding, Rusal, and Roman Abramovich reached a shareholder agreement on dividend payout amounts in 2012 to settle a disagreement over the topic as well as issues with the organization’s general strategy and management.
The chances of the agreement being extended or suspended before its June 1, 2023 expiration date is unknown. In March 2019, Abramovich sold a 1.7% stake in the company for $551 million, largely to Russian and British investors. Potanin and Deripaska’s Rusal were barred from purchasing shares.
A little about President of Russia Vladimir Putin
Vladimir Vladimirovich Putin (born 7 October 1952) is a Russian politician and former intelligence officer who currently serves as Russia’s president. Putin has been president or prime minister continuously since 1999 as prime minister from 1999 to 2000 and again from 2008 to 2012 and as president from 2000 to 2008 and again since 2012.
Russia has experienced democratic backsliding and a turn to authoritarianism under Putin’s leadership. His tenure has been marked by massive corruption and human rights breaches, including the arrest and harassment of political opponents, the intimidation and suppression of Russia’s independent media, and a lack of free and fair elections.
Transparency International’s Corruption Perceptions ranking, the Economist Intelligence Unit’s Democracy Index, Freedom House’s Freedom in the World ranking, and Reporters Without Borders Press Freedom Index all gave Putin’s Russia low marks. Putin is the second-longest-serving European president, after Belarus’ Alexander Lukashenko.
The U.S. Sanctions imposed on Russian Businessman Vladimir Potanin
According to the Wall Street Journal, which cited American sources, the US is attempting to impose sanctions on Vladimir Potanin, one of Russia’s wealthiest individuals, but would not sanction Nornickel, the company in which he owns a majority stake.
According to the publication, sanctions against Vladimir Potanin, his wife Ekaterina Potanina, a yacht he owns, and many of his financial firms are expected as part of the action, which may take place as soon as Thursday.
Nornickel, the world’s largest manufacturer of refined nickel and palladium, was one of the biggest victors in the post-Soviet partition of Russian industry in the 1990s.
The company decided not to reply to the report.
According to the publication, Vladimir Potanin’s investment holding firm, Interros, and Rosbank (ROSB.MM), which Interros purchased earlier this year from Societe Generale SA (SOGN.PA), will also be listed on the list of sanctioned parties.
Vladimir Potanin, 61, is the largest shareholder in MMC Norilsk Nickel PJSC (GMKN.MM) or Nornickel. Interros owns 36% of Nornickel. Interros did not respond immediately to a Reuters request for comment.
Since Russia’s invasion of Ukraine on February 24, the US and its allies have imposed a slew of sanctions on Moscow.
According to the Wall Street Journal, some Russian government officials will face fines in the most recent round.
The United States Treasury Department declined to comment.
Investigations
The FBI reported in July 2018 that Vladimir Potanin, a private equity investor, owned ByteGrid, a company employed by the Maryland State Board of Elections to store data. According to a retroactive investigative report provided by the US Department of Homeland Security’s National Cybersecurity and Communications Integration Center, there was no evidence that MDSBE’s corporate network had been compromised. The contract was then transferred to Intelishift as a precaution.
The United States has added Russian oligarch Vladimir Potanin and Rosbank to its sanctions list.
The US has placed financial penalties on one of Russia’s wealthiest men, Vladimir Potanin, and the Russian commercial bank Rosbank, as part of its ongoing efforts to limit Moscow’s ability to fund its war in Ukraine.
The Treasury Department said in a statement on December 15 that the designation of Rosbank, which was purchased earlier this year by an investment holding company Potanin Controls, and other entities related to Russia’s financial sector are taken together with the State Department’s designation of Potanin.
Rosbank is regarded by the Central Bank of Russia as a systemically important credit institution to the Russian government. Rosbank was named by the United Kingdom and Canada earlier this year.
In addition to Rosbank, the Treasury Department’s Office of Foreign Assets Control has blacklisted 17 Russian financial-services businesses. All of these are subsidiaries of VTB Bank, Russia’s second-largest bank, which was sanctioned in February.
The designations “are part of the [U.S. government’s] efforts to further limit the [Russian government’s] ability to fund its unconscionable war of choice against Ukraine,” according to the Treasury.
As per the statement- “Since the start of Russia’s brutal full-scale invasion in February, Treasury has taken unprecedented action to isolate Russia from the global financial system, with severe short- and long-term effects on its economy.”
According to the department, Russia’s economy will decrease this year and continue to contract in 2023.
“Additionally, lost investment, export controls, and constraints on Russia’s real economy will stymie Russia’s growth prospects for years to come,” the statement continued.
The designations, according to Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson, “continue to deepen Russia’s isolation from global markets,” and “will further inhibit the [Russian President Vladimir] Putin regime’s ability to fund its horrific war against Ukraine.”
Vladimir Potanin, his network, and more than 40 other Russian government associates were also named by the State Department. According to the State Department, Vladimir Potanin formerly served as a deputy prime minister and has close links to Putin.
Members of the government, some family members, and an entity are among those sanctioned by the State Department. According to the department, governors “oversee and enforce the conscription of citizens in response to Russia’s recent mobilization order.”
The sanctions freeze any assets held by individuals or entities that are subject to US jurisdiction, restrict their access to global financial markets, and prevent people based in the US from engaging with them.
The UK government announced further sanctions against Putin’s inner circle today.
- Vladimir Potanin, Russia’s second richest man and a prominent Kremlin backer, sanctioned
- Anna Tsivileva, Putin’s first cousin once removed and president of a big Russian corporation also approved.
- New procedures to prevent oligarchs from using UK trust services.
The UK government imposed new sanctions against Putin’s inner circle today.
Vladimir Potanin, Russia’s second richest man and owner of big conglomerate Interros, is among those sanctioned. Vladimir Potanin has continued to gain money while supporting Putin’s administration, accumulating Rosbank and Tinkoff Bank shares in the years following Russia’s invasion of Ukraine.
Anna Tsivileva, Putin’s first cousin once removed and President of JSC Kolmar Group, a large Russian coal mining corporation, has also been sanctioned. Sergey Tsivilev, Tsivileva’s husband, is the Governor of the coal-rich Kemerovo region, and the couple has benefited greatly from their ties with Putin. JSC Kolmar Group was also approved today.
According to a government spokesperson:
We will employ sanctions to degrade Russia’s military machine as long as Putin continues his heinous assault on Ukraine. The penalties imposed today demonstrate that nothing and no one is off-limits, including Putin’s inner circle.
The UK government is also penalizing a number of Russian individuals and businesses for their roles in oppressing civilians and assisting the Assad regime in Syria, exposing Russia’s malign actions around the world.
In addition, the UK government is working with foreign allies to implement additional restrictions that will prevent Russia from accessing UK trust services. These services, which enable one person or business to manage the assets of another, are just another important component of the UK’s world-class financial services sector that Russia will no longer be able to access.
Throughout Putin’s war of choice, international partners have stood by Ukraine and utilized sanctions to punish his heinous invasion, while governments and corporations alike have turned their backs on Russia. Since Putin’s invasion of Ukraine, the UK has sanctioned almost 1,000 persons and over 100 corporations, and three-quarters of foreign companies have decreased or terminated their operations in Russia, with roughly a quarter totally withdrawing.
Russian imports have decreased by more than 40% since the invasion, and critical imported manufacturing components are expected to be depleted within the next 3 to 6 months.
Car production is also down by 60%, and Russia’s Transport Minister has stated that sanctions have “broken” Russia’s logistics system.
Background
Asset Seizure
An asset freeze prohibits any UK citizen or UK-based business from engaging with funds or economic resources owned, possessed, or controlled by the designated individual. UK financial sanctions apply to all persons within the UK’s territory and territorial seas and to all UK citizens everywhere in the globe. It also prohibits the provision of financial or economic resources to or for the benefit of the designated individual.
Travel restrictions
A travel ban indicates that the designated person must be denied entry or stay in the United Kingdom if they are an excluded person under section 8B of the Immigration Act 1971.
Transportation sanctions
It is now a criminal offense for any Russian aircraft to fly or land in the United Kingdom, and the government has the authority to remove aircraft belonging to designated Russian individuals and businesses from the UK aircraft register, even if the sanctioned individual is not on board. Russian ships are also barred from entering UK ports.
Wrapping Up with the Russian Invasion of Ukraine
Russia attacked and annexed areas of Ukraine on February 24, 2022, in a dramatic escalation of the Russo-Ukrainian War, which began in 2014. Tens of thousands of people were killed on all sides of the conflict, and Europe saw its worst refugee crisis since World War II. By June, approximately 8 million Ukrainians had been internally displaced, and more than 8.2 million had departed the nation by May 2023.
Russian troops had been accumulating around Ukraine’s borders for months prior to the invasion, but Russian officials denied any preparations to attack Ukraine. Russian President Vladimir Putin announced a “special military operation” on February 24, 2022, to support the Russian-controlled breakaway republics of Donetsk and Luhansk, whose military forces had been fighting Ukraine in the Donbas conflict. The purpose, he stated, was to “demilitarise” and “denazify” Ukraine.
Putin advocated irredentism, questioned Ukraine’s right to self-determination, and erroneously claimed that Ukraine was governed by neo-Nazis who persecuted the ethnic Russian minority. Russian air raids and a ground invasion were begun minutes later along a northern front from Belarus to Kyiv, a north-eastern front to Kharkiv, a southern front from Crimea, and a south-eastern front from the Donbas. Ukraine’s president, Volodymyr Zelenskyy, responded by declaring martial law and ordering a mass mobilization.
By April, Russian troops had withdrawn from the northern front. Russia took Kherson in March and Mariupol in May after a destructive siege on the southern and south-eastern fronts. Russia launched a fresh battle in Donbas on April 18. Throughout the winter, Russian forces continued to bomb both military and civilian targets far from the front lines, including Ukraine’s electricity grid. Ukraine launched counteroffensives in the south and east in late 2022. Soon after, Russia announced the unlawful annexation of four oblasts that were partially occupied. Ukraine retook Kherson in November. On February 7, 2023, Russia mobilized approximately 200,000 troops for a new onslaught against Bakhmut.
The invasion has been widely condemned around the world. The United Nations General Assembly passed Resolution ES-11/1, condemning the invasion and demanding that Russian soldiers withdraw completely. The International Court of Justice ordered Russia to halt military operations, and Russia was ejected from the Council of Europe. Many countries put sanctions on Russia and its ally Belarus, as well as humanitarian and military assistance to Ukraine.
Protests took place all around the world, with Russia responding with huge arrests and intensified media restrictions. In response to the invasion, almost 1,000 enterprises fled Russia and Belarus. During the invasion, the International Criminal Court (ICC) started an investigation into alleged crimes against humanity, war crimes, child abduction, and genocide, issuing an arrest warrant for Putin in March 2023.
The invasion killed tens of thousands of people on both sides and triggered Europe’s worst refugee crisis since World War II. By June, approximately 8 million Ukrainians had been internally displaced, and more than 8.2 million had departed the nation by May 2023.
