Is Ukraine ready to impose sanctions against Russian oligarchs?

Author : Serhiy Fursa

Source : 112 Ukraine

President Petro Poroshenko stated that Ukraine would impose sanctions on Russian oligarchs, but this step is very doubtful - expert
09:40, 11 April 2018

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Daily Storm

April 10, President Petro Poroshenko stated that Ukraine would impose sanctions against Russian oligarchs.

I am not sure that Ukraine has many opportunities to impose sanctions on Russian business so that the Russian business would suffer more than Ukraine.

These are rather political statements, and in fact, Ukraine cannot significantly influence Russian business. Of course, Russian oligarchs have certain assets in Ukraine, for example, Deripaska possesses an alumina refinery in Mykolaiv. We can just take it away, that is nationalize it. But would it somehow help Ukraine or would it help the plant – this is a rhetorical question. In fact, we have problems with privatization, and not vice versa. The interests of the others are rather insignificant (I mean, for those who are on the sanctions list).

Related: Russia threatens US with "tough response" to introduction of sanctions

Speaking about Deripaska’s plant, it should be noted that he pays taxes in Ukraine. This means that here come Ukrainian national interests. In addition, no one could take anything from Deripaska, for there are some restrictions on the activities. If you simply impose restrictions on the activities of any asset of Russian business in Ukraine, first of all, it would blow back on the Ukrainian workers who work there, the Ukrainian budget, which receives taxes from there. We are not talking about this very Mykolaiv plant. To be frank, I am not that familiar with that situation, so I do not know whether it works at all. But if we are talking about any Russian business here, we understand that imposing such sanctions is not reasonable step. We will be the most adversely affected by its consequences.

At the same time, I do not think that Russia would harshly respond for our actions. For everything negative that could be done about the economy of Ukraine is already done. Currently, they do not have any levers; they have already brought maximum damage to us.

I do not think that Ukraine would impose any significant sanctions. I also do not believe that Russia would somehow respond to them (to Ukraine or to the whole world). They can do nothing to the world, they cannot say anything, and they have already brought their greatest damage to Ukraine.

Related: Skripal's case: U.S. introduces bill on sanctions against Russia

The only benefit for Ukraine, which I see now, is that in terms of the ongoing war with Russia, we are talking about the economic issue. So to say, we fight, whose economy is more sustainable. The more threats to the Russian economy, the better for Ukraine.

Why have the stock exchanges harshly reacted to these new sanctions? Because they are stronger than those sectoral ones. So, the sectoral sanctions were of a broader profile, but the level of sanctions itself increased much in the case of Rusal (world's second-largest aluminium company by primary production output as of 2016 – Ed.). Rusal’s business model is actually destroyed, and it needs to build a new business model. Its shares were affected. What the Americans have done now is very similar to what they did to Iran. The companies are simply thrown out of the world market. Rusal is now being thrown out of the world market. And it hurts. Nobody expected that such a strong level of sanctions would be imposed. This is all projected onto other Russian assets, which also became toxic. This might happen to everyone.

Related: U.S. imposes sanctions against Russian oligarchs close to Putin

Would this situation have a strong impact on the Russian economy? No. Sectoral sanctions are in force, they are influencing the Russian economy even now, but this influence is limited. Similarly, the situation with Deripaska would affect the Russian economy, but in a limited way.

As we reported the US imposed new sanctions against several Russian oligarchs and companies on April 6. It is noted that the new sanctions concern a possible Moscow’s intervention in the U.S. elections in 2016.

Russian businessmen and entrepreneurs, whose wealth is more than $1 billion are on the sanctions list. Alexey Miller, CEO of Gazprom, Nikolai Patrushev, Secretary of the Security Council of Russia, and Aleksandr Zharov, the Head of Roskomnadzor (Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications, - ed.) appeared in the sanctions list as well.

Related: Western sanctions against Russia not sufficient, - DW

This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.

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