U.S. to Sanction Putin, Joining U.K. and EU in a Symbolic Step

(Bloomberg) -- The U.S. joined the European Union and the U.K. in sanctioning Russian President Vladimir Putin and his foreign minister over the invasion of Ukraine, in a move that’s laden with symbolism but isn’t likely to hurt their wallets.

The asset freezes for Putin and Foreign Minister Sergei Lavrov were in an EU sanctions package adopted late Thursday by the bloc’s foreign affairs council, Latvian Foreign Minister Edgars Rinkevics wrote on Twitter. The U.K. and the U.S. followed later in the day. 

White House press secretary Jen Psaki said Friday that the U.S. move “sends a clear message about the strength of the opposition to the actions by President Putin and the direction in his leadership of the Russian military.” She said she wouldn’t go into details about the extent of the assets involved but indicated that the U.S. action includes a travel ban.

The punishments are charged with symbolism given that the U.S. tends to sanction only leaders of countries with whom it’s severed diplomatic relations or considers pariahs. Putin has essentially been put in the same company as Belarus’s Alexander Lukashenko, the deceased Robert Mugabe of Zimbabwe and North Korean leader Kim Jong Un.

Russian Foreign Ministry spokeswoman Maria Zakharova ridiculed the move on her Telegram account, saying neither Putin nor Lavrov has a bank account in the U.K. or anywhere else abroad.

In a briefing Thursday, President Joe Biden said sanctions against Putin were on the table. Still, officials have previously shied away from imposing such measures because sanctioning a head of state or foreign minister could complicate diplomacy and potentially subject anyone who interacts with them to sanctions as well.

In January, when U.S. senators floated the idea of sanctions against Putin, his spokesman Dmitry Peskov said that would be “tantamount to a breach in relations.”

Little-Known Finances

Little is known about Lavrov’s wealth and Putin officially owns few assets. His annual income is about 10 million rubles ($120,000), and he owns three cars and an apartment, according to his latest financial disclosure. But his wealth has long been the focus of intense speculation. 

In 2008, he denied reports that he has a $40 billion fortune and is the wealthiest man in Europe, saying at his annual news conference that journalists had picked the allegation “out of their noses and smeared it on their pieces of paper.” 

In 2016, a trove of documents known as the Panama Papers revealed how a Central American law firm allegedly set up shell companies to help heads of state and international criminals conceal their riches. Putin wasn’t named in the documents, but they showed how some of his closest friends and associates used the shell companies to move more than $2 billion from Russian banks to offshore accounts. The Kremlin rejected the investigation’s findings.

Sanctions against Putin could be more about demonstrating a unified position by the West than actually squeezing his finances, according to Daniel Tannebaum, head of sanctions at Oliver Wyman in New York. 

“It all depends on the underlying purpose,” Tannebaum said. “If you’re trying to have a unified position on how he would be viewed by the West, then a sanctions designation could serve that purpose. If the point is to try and seize his personal assets, I do think it’d be extremely challenging to be completely successful.”

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