Sanctions

These Sanctions Against Russia Will Hurt, and It's the Russian Liberals Who Will Suffer

BY JULIA IOFFE

Today, the Obama administration imposed sanctions on sixteen high-ranking Russian officials as well as four of Putin's best friends who, magically, have become multi-billionaires in the last decade. This, with a few notable people missing from the list, is the most inner of inner circles. These sanctions are going to sting, because these people aren't just multi-billionaires, but men who, because of their closeness to Putin, control much of the Russian economy: railroads, banks, construction, media. One of the men, Yury Kovalchuk, even had his bank, Rossiya, sanctioned.

These sanctions will not just ban travel to the U.S. or freeze assets (most of which these guys keep in Europe and in various tax shelters around the world), but will effectively bar them from participation in the world financial system. That is going to sting and it's going to hurt, and it's going to hurt in the exact right places.
Sources inside the administration say that Europe's list of sanctions, which is forthcoming, overlaps very significantly with the American one. The administration is also discussing whether to distribute the sanctions to family members, given that these men officially may own very little themselves, but have stashed their wealth in shell companies, and wives and children who function as shell companies. But just having a last name that's on the U.S. Treasury sanctions list may be hurt enough. And, as the White House has emphasized repeatedly, this is only the beginning.

But there are people who are not on the list who are already cringing at the anticipation of the blow: Russian liberals. They were largely horrified by their country's invasion of Ukraine and are happy to see Putin's cronies punished by the West, but they know that the Kremlin, unable to lash out at Washington, will take its fury out on them. There's precedent for this: when Congress passed the Magnitsky Act, punishing those Russians involved in the gruesome death of lawyer Sergei Magnitsky, Russia retaliated by...lashing out at its orphans and banning American adoptions of Russian children.

The Russian opposition has been withering since Putin returned to the presidency in May 2012, and Putin has already singled them out for punishment for their protests against him in 2011-2012. He has used the chaos in Crimea to clean house in Moscow, cracking down on independent media and locking up opposition leader Alexey Navalny under house arrest. In his big speech on Tuesday, Putin finally gave voice to what we knew he'd been thinking all along, calling them "a fifth column" and "traitors." After today's sanctions were announced, and the euphoria that followed, Navalny tweeted through his wife (the terms of his house arrest ban him from using the Internet): "Just so that there are no illusions: Somebody will have to pay for this happiness that the crooks are being sanctioned. Need to pack my bag for jail." Navalny was sentenced to five years in jail last summer on trumped up charges and his sentence was commuted, but the authorities took care to have a couple criminal cases open against him, just in case.

It's not that the crackdown is coming. The crackdown is already here, and the opposition—or what's left of it—has been grunting under its weight for the last two years. But now, it's about to get really, really bad. At least that's the fear. There's talk of closed borders and exit visas, arrests, unemployment because of political beliefs: You know, the kinds of things you do with traitors in Russia.

There's also talk of emigration. Those with Jewish ancestry are knocking on the door of the Israeli consulate in Moscow. Others are discussing green card lotteries, grasping at any possibility, however unlikely, to get out, and the possibilities are few and hard to get. After all, Russians aren't the only people in the world who want to emigrate to the West. Not everyone who opposes Putin wants to get out, of course, and someone needs to stay behind to help catch pieces of this strange edifice when it inevitably falls. But if Washington and Brussels are serious about human rights and democracy, they should offer a helping hand to those who will inevitably be the whipping boys when the sanctions really start to hurt.