If Russia's elite weren't already rocking in their custom Italian-leather boots, they probably are now.
In his first State of the Union address on Tuesday night, President Joe Biden, in a direct address to Russian President Vladimir Putin's peers, said that the United States and its allies "seize your yachts, your luxury apartments, your private jets". Coming to.
The message underscores the fact that Russia's oligarchs, a class of businessmen who had amassed billions of their personal wealth in the 1990s by taking advantage of their ties with the Kremlin to carve out wealth from the former Soviet Union, were at their feet. How much is the ground moving under?
Since Putin's invasion of Ukraine, Western governments have sought to freeze foreign assets of Putin as well as oligarchs, as well as prevent them from traveling. The goal is two-pronged: the sanctions serve as both a punishment for Russia's ruling class and a punishment for trying to force Putin to back down.
It's safe to say that sanctions have successfully caught the attention of oligarchs, at least for now.
Roman Abramovich, a 55-year-old who is estimated to be worth $13.5 billion, announced on Wednesday that he is selling his beloved Chelsea football club, which he acquired in 2003. Even though Abramovich's name is not yet on the sanctions list, UK lawmakers are putting pressure on the leaders. to do this. The tycoon is reportedly selling some of his London properties in anticipation of sanctions.
According to Bloomberg, British MP Kris Bryant said, "He is afraid of being approved, which is why he is going to sell his house tomorrow and also sell another flat."
The oligarchs are on the move, and we know that partly because of a 19-year-old from Florida who built a Twitter bot that tracks the movements of about 40 planes and helicopters linked to Russian oligarchs. (This is the same 19-year-old who made headlines earlier this year for turning down Elon Musk's request to take down a bot dedicated to the Tesla CEO's jet.)
CNBC reported that earlier this week, at least four superyachts owned by Russian billionaires were seen heading to Montenegro and the Maldives, along with Putin. The Maldives, an island nation in the Indian Ocean, does not have an extradition treaty with the United States, which may fuel its appeal as an elite haven.
Unfortunately for the Russian elite, other former safe harbors are increasingly closing them in. Monaco, the tiny principality in the French Riviera that has become a playground for Russia's wealthy, on Tuesday adopted sanctions similar to those of the European Union. And famously neutral Switzerland also sided with the European Union this week, announcing that it would close its airspace to flights from Russia and impose entry restrictions against several Putin cronies.
Of course, experts say that enforcing a ban on Tycoon will not be fast or easy. Wise billionaires who build their wealth under an authoritarian government are adept at hiding their wealth through layers of mask companies and cronies.
"If you're a Russian oligarch floating on your yacht in the Indian Ocean, most of your money won't already be in your name," said Alison Jimenez, president of litigation consulting firm Dynamic Securities Analytics. "You'll have an opaque layer of shell corporations with fake people standing up for you."
It may take some of the punitive bite out of Western sanctions. “You can confiscate the boat, you can confiscate the plane, but they have money all over the world,” Jimenez says. "If you manage to capture 75% of that, they're still going to be richer than everyone else in the world."
But the pressure appears to be having a psychological effect, if not an immediate monetary effect.
This week two prominent tycoons, Mikhail Fridman and Oleg Deripaska, broke ranks with the Kremlin and called for an end to Russia's war in Ukraine.
Friedman, who was born in western Ukraine and is closely linked to Putin's inner circle, wrote in a letter to his employees that he wanted "the bloodshed to end." Friedman is the chairman of the Alpha Group, a private conglomerate that expands into banking, insurance, retail and mineral water production.
His call for peace was echoed by Deripaska, who made his fortune in the aluminum business. "Peace is very important! Negotiations need to start as soon as possible!" Deripaska said in a post on Telegram on Sunday.