The U.S. devised sanctions to influence ordinary Russians
CIRCUMVENTION
If you haven’t yet read Politico’s oral history of the Western response to Vladimir Putin’s aggression against Ukraine, then you should do so ASAP. It is a remarkable piece of work that gives extraordinary insights into U.S. decision-making in the run-up to an unprecedented crisis. I think it works very well in conjunction with the BBC Series “Putin vs the West,” which has a longer x-axis but similarly excellent access. A key theme was an awareness that the Kremlin won the information war in 2014 and a determination to prevent that happening again. That informed far more of the West’s response than anybody (by which I mean, in the Trumpian sense, “me”) realized — up to, and including, who got sanctioned.
- “Look, in 2014, we didn’t win the narrative within Russia — so this time, let’s seize the physical assets of the kleptocracy, the yachts, the fancy cars and luxury apartments — not so much because we thought the owners of those assets would influence Putin, but it was intended to be a demonstration to the Russian people that they’d been getting ripped off for a very long time,” said Daleep Singh, the U.S. National Security Council’s deputy national security adviser for international economics.
A year ago, when I was talking about sanctions, it didn’t occur to me that policymakers were using them not just to influence the Kremlin or to degrade Russia’s abilities — which were the two dominant explanations at the time — but also as a tool in the global influence campaign aiming to paint Russia as a kleptocracy, not as a rival civilization. It’s clever. Although, having said that, it is perhaps cleverer for a country like the U.S., where courts don’t oversee sanctions, than it is for the European nations, where sanctioned individuals can challenge their designation. Certainly, if I was an oligarch’s lawyer, I’d now be arguing that my client had been targeted unfairly in a propaganda battle, rather than because of anything he’d done. And I do wonder if, perhaps, officials in the U.K. or EU aren’t now slightly cursing Singh for saying the silent bit out loud.
These days, however, the buzzword is “circumvention” and how to stop Russia from rerouting its trade and finances via countries like Turkey, the United Arab Emirates, Georgia and Kazakhstan, opposition to which is coordinated by the multilateral Russian Elites, Proxies and Oligarchs Task Force. Before I move on, and I appreciate they were in a hurry this time last year and perhaps couldn’t get quite as creative as they might have liked, but surely they could have come up with a better acronym than REPO? Not least because “repo” is already a thing in financial markets. It’s taken me about 90 seconds to come up with CORRUPT — Countering Oligarchs’ and Russian Rulers’ Unearned Property Taskforce — and I don’t have any experience at this. Considering the depth of acronym talent in U.S. institutions alone, REPO shows a disappointing lack of ambition, IMO.
Anyway, last week REPO (shudder) produced a report detailing various techniques being used by wealthy Russians, which is an interesting insight into the ingenuity of their various enablers, as well as a tribute to the work being put in to stymie them. Some of it is pretty unremarkable, in that it looks just like a continuation of the previous methods used by oligarchs to hide their financial transactions, only more so, but other bits are new because they are about the smuggling of physical objects rather than just about money.