U.S., U.K. Sanction Firms tied to Russian Oligarch Alisher Usmanov
WASHINGTON—The U.S. and the U.K. on Wednesday expanded the West’s net of economic sanctions encircling Russia, targeting a major metals firm and scores of other companies in an effort to cut off more of the international assets and finance channels still connecting Moscow’s economy to global trade and finance.
Notable among the additions to the U.K. and U.S. Treasury, State and Commerce Department sanction and export control lists are a global network of firms and associates of
Alisher Usmanov,
one of Russia’s wealthiest oligarchs, including metals and mining conglomerate USM Holdings Co.
Mr. Usmanov was sanctioned in March 2022 when Ukraine’s European allies launched a major economic pressure campaign against Russia in response to the invasion of Ukraine. But many of his most important assets weren’t. Western officials were concerned that sanctioning all of the oligarch’s companies could create turmoil in global markets, some officials said.
The U.S. also added dozens of other firms based around the globe, including in China, Turkey and the United Arab Emirates, that officials say are helping supply Russia’s military and industrial base. The U.K.’s foreign secretary said it had also sanctioned what he called financial fixers for Russian oligarchs previously cut off from international markets.
“As the Kremlin seeks ways around the expansive multilateral sanctions and export controls imposed on Russia for its war against Ukraine, the United States and our allies and partners will continue to disrupt evasion schemes that support Putin on the battlefield,” said Brian Nelson, undersecretary of the Treasury for terrorism and financial intelligence.
Neither USM or Mr. Usmanov, contacted through the company, immediately responded to requests for comment.
After putting Mr. Usmanov on the sanctions list, U.S. authorities waited more than a year to list the firms separately. In addition to concerns the sanctions could cause collateral damage in Western markets, investigators needed time to comb through the thicket of corporate holdings obscuring the assets, current and former U.S. officials said.
German authorities, for example, late last year searched the offices of an international bank as part of a money-laundering investigation into Mr. Usmanov. And some of Mr. Usmanov’s dealings were run through the offshore financial haven, the Isle of Man, whose corporate and banking secrecy laws have attracted investors seeking to keep their operations under the radar of international authorities, say some British lawmakers and financial-transparency analysts.
Top U.S. officials are also prodding global finance ministers and industry leaders meeting in Washington this week to tighten enforcement of the Russia sanctions, said senior Treasury officials.
The U.S. seeks to spur greater compliance by sharing intelligence on evasion with counterparts from around the globe, as well as warning some countries that their banks and companies risk being targeted with sanctions if authorities fail to effectively curb illicit activity, the officials said.
“We’re increasing pressure on the companies and jurisdictions we know are allowing, facilitating evasion,” said a senior Treasury Department official. Current and former officials point to Turkey, the U.A.E. and China as countries where Russia has been able to channel banned goods and finance, as well as several of Russia’s neighbors, where the Kremlin has deepened its financial ties and trade flows as other markets have been closed off. Those countries’ governments have said they aren’t allowing sanctioned activities through their markets.
While Russia’s government recorded a budget deficit in the first quarter of this year and the economy is still faltering from the sanctions campaign, the country’s economic prospects are better than originally forecast and Moscow’s war machine is still running.
“The fact is even some of the countries who have publicly opposed Russia’s unconscionable war are falling short on action to ensure that Russia can’t exploit their companies and banks to equip its military,” the senior Treasury official said.
Write to Ian Talley at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
WASHINGTON—The U.S. and the U.K. on Wednesday expanded the West’s net of economic sanctions encircling Russia, targeting a major metals firm and scores of other companies in an effort to cut off more of the international assets and finance channels still connecting Moscow’s economy to global trade and finance.
Notable among the additions to the U.K. and U.S. Treasury, State and Commerce Department sanction and export control lists are a global network of firms and associates of
Alisher Usmanov,
one of Russia’s wealthiest oligarchs, including metals and mining conglomerate USM Holdings Co.
Mr. Usmanov was sanctioned in March 2022 when Ukraine’s European allies launched a major economic pressure campaign against Russia in response to the invasion of Ukraine. But many of his most important assets weren’t. Western officials were concerned that sanctioning all of the oligarch’s companies could create turmoil in global markets, some officials said.
The U.S. also added dozens of other firms based around the globe, including in China, Turkey and the United Arab Emirates, that officials say are helping supply Russia’s military and industrial base. The U.K.’s foreign secretary said it had also sanctioned what he called financial fixers for Russian oligarchs previously cut off from international markets.
“As the Kremlin seeks ways around the expansive multilateral sanctions and export controls imposed on Russia for its war against Ukraine, the United States and our allies and partners will continue to disrupt evasion schemes that support Putin on the battlefield,” said Brian Nelson, undersecretary of the Treasury for terrorism and financial intelligence.
Neither USM or Mr. Usmanov, contacted through the company, immediately responded to requests for comment.
After putting Mr. Usmanov on the sanctions list, U.S. authorities waited more than a year to list the firms separately. In addition to concerns the sanctions could cause collateral damage in Western markets, investigators needed time to comb through the thicket of corporate holdings obscuring the assets, current and former U.S. officials said.
German authorities, for example, late last year searched the offices of an international bank as part of a money-laundering investigation into Mr. Usmanov. And some of Mr. Usmanov’s dealings were run through the offshore financial haven, the Isle of Man, whose corporate and banking secrecy laws have attracted investors seeking to keep their operations under the radar of international authorities, say some British lawmakers and financial-transparency analysts.
Top U.S. officials are also prodding global finance ministers and industry leaders meeting in Washington this week to tighten enforcement of the Russia sanctions, said senior Treasury officials.
The U.S. seeks to spur greater compliance by sharing intelligence on evasion with counterparts from around the globe, as well as warning some countries that their banks and companies risk being targeted with sanctions if authorities fail to effectively curb illicit activity, the officials said.
“We’re increasing pressure on the companies and jurisdictions we know are allowing, facilitating evasion,” said a senior Treasury Department official. Current and former officials point to Turkey, the U.A.E. and China as countries where Russia has been able to channel banned goods and finance, as well as several of Russia’s neighbors, where the Kremlin has deepened its financial ties and trade flows as other markets have been closed off. Those countries’ governments have said they aren’t allowing sanctioned activities through their markets.
While Russia’s government recorded a budget deficit in the first quarter of this year and the economy is still faltering from the sanctions campaign, the country’s economic prospects are better than originally forecast and Moscow’s war machine is still running.
“The fact is even some of the countries who have publicly opposed Russia’s unconscionable war are falling short on action to ensure that Russia can’t exploit their companies and banks to equip its military,” the senior Treasury official said.
Write to Ian Talley at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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