The U.S., the U.K., and the EU all slapped severe sanctions on Russian individuals and companies in the wake of Russia’s invasion of Ukraine.
Yet the person most responsible for the decision to invade—Russian President Vladimir Putin, who U.S. President Joe Biden said “chose this war” in a Thursday press conference—is not a target of sanctions.
Putin is reportedly one of the world’s richest leaders, though there is no firm evidence of his actual wealth, and sanctions would put the president’s assets at risk.
Western countries have imposed asset freezes and travel bans on members of Russia’s elite, including relatives of those in Putin’s inner circle. Sanctions also bar individuals and companies from doing business with those who have been targeted. For example, private schools in the U.K. would not be able to accept tuition payments from a sanctioned individual.
Sanctions against Russian companies are also severe. The U.S. has barred some of Russia’s largest banks, like PJSC Sberbank and VTB Bank, from working with the U.S. financial system. The EU is also planning to bar several Russian banks from buying and selling European securities and blacklist several state-owned companies in shipbuilding and construction. The U.K. has also passed wide-ranging sanctions, freezing all assets from Russian-owned banks, barring major Russian companies from raising money in U.K. markets, and even going as far as to bar Russian airline Aeroflot from landing in the country.
So why have punitive measures against Russia excluded Putin so far?
Some countries may want to spare Putin from personal sanctions to preserve the possibility of a diplomatic solution. The New York Times reported that some European states led by Germany wanted sanctions to exclude Putin and Russian Foreign Minister Sergey Lavrov to keep communication channels open with Russia’s top leadership.
Kremlin spokesperson Dmitry Peskov previously called the possibility of personal sanctions against Putin “politically destructive” and akin to severing diplomatic relations.
Western governments may also want to impose sanctions incrementally rather than all at once to better respond if the Ukraine situation changes.
Those involved in crafting the 2014 U.S. sanctions against Russia—imposed in the wake of the country’s annexation of Crimea—have previously discussed the importance of preserving some room to maneuver. Daleep Singh, now Biden’s deputy national security adviser for international economics and a key architect of the current sanctions program, said in a 2018 Senate hearing that sanctions “against a large, complex, and integrated market economy such as Russia should be…staged to preserve scope for escalation or de-escalation.”
Personal sanctions against Putin are not the only policy option being set aside for now. Cutting Russia off from the SWIFT international payments system—often called a “nuclear option”—was “not the position that the rest of Europe wishes to take,” said Biden during his Thursday remarks.
Current sanctions also exclude the energy sector, in part due to concerns about disrupting global energy markets. The White House is also worried that energy sanctions might backfire, with one administration official telling Politico that “given high oil and gas prices, cutting off Russian oil and gas will drive prices up to Putin’s benefit.” The U.S. is also avoiding sanctions on Russia’s aluminum industry so as to not worsen a global shortage of the metal.
If world leaders decide to sanction Putin, the consequences of such an action would be difficult to measure since the net worth of the Russian president is a matter of debate.
According to official disclosures from the Kremlin, the Russian president earns an income of $140,000 and owns three cars, a trailer, and an 800-square-foot apartment. He also uses a 1,600-square-foot apartment in Moscow.
However, Putin’s inner circle is extremely wealthy, suggesting the president is wealthier than the Kremlin lets on. Leaks like the Panama Papers and Pandora Papers, which contained information about those hiding money in offshore tax havens, revealed that Russian individuals with close ties to Putin have amassed fortunes stretching into the hundreds of millions of dollars.
When asked about the effects of personal sanctions on Putin, Peskov, the Kremlin spokesperson, noted that state officials in Russia are barred from holding foreign bank accounts.
There are few estimates of Putin’s actual wealth, but those that exist place the Russian president among the world’s richest people.
Stanislav Belkovsky, a Russian political analyst and Putin critic, estimated that Putin had a net worth of $70 billion in 2012 for The Bureau of Investigative Journalism, based on claims that the Russian president has stakes in Russian oil and gas companies like Gazprom and Surgutneftegas.
Anders Aslund, Swedish economist and author of Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy, gives a higher estimate, arguing that Putin has somewhere between $100 billion and $150 billion in assets. Aslund based his calculation on the wealth of Putin’s confidants. The economist estimates Putin’s friends hold between $500 million and $2 billion each on behalf of the Russian president.
Perhaps the most extreme estimate of Putin’s wealth came from financier Bill Browder—a fierce critic of the Russian president and one of the main proponents of the Magnitsky Act—who testified to the U.S. Senate in 2017 that he believed the Russian president to be “one of the wealthiest men in the world,” with assets totaling up to $200 billion. That sum would make Putin richer than Jeff Bezos, Bill Gates, and Elon Musk. Browder based his calculation on his belief that Putin ordered Russia’s richest oligarchs to offer him half of their wealth in the wake of the 2003 arrest of Mikhail Khodorkovsky, the founder of oil company Yukos and once Russia’s wealthiest person, who was jailed for fraud.
Others argue that trying to calculate Putin’s wealth misses the point. They say that the Russian president controls so much of the Russian economy that the exercise is meaningless. As exiled Russian billionaire Sergei Pugachev argued in the Guardian in 2015, “Everything that belongs to the territory of the Russian Federation Putin considers to be his…Any attempt to calculate [his net worth] won’t succeed.”
Regardless, the opaque nature of the Russian president’s net worth—and how it may be spread among his inner circle—means that all estimates are based on a great deal of speculation. For its part, Forbes chooses not to include Putin on its list of billionaires, noting in 2015 that it was not “able to verify his ownership of assets worth $1 billion or more.”
In announcing the expanded sanctions on Thursday, Biden called the targeted individuals “people who personally gain from the Kremlin’s policies [who] should share in the pain.”
Yet it is not clear how effective personal sanctions are in freezing the finances of individuals or changing their behavior. Targeted sanctions may “only be marginally effective when these individuals treat Russia’s resources as their own personal piggy bank,” argue the Atlantic Council’s Edward Fishman and Tufts University’s Chris Miller in an op-ed for Politico. By leading Russia’s major enterprises, the country’s elite could continue to benefit from economic activity even if they are barred from accessing their personal accounts in the West.
If targeted, Putin would not be the only world leader to be hit by sanctions. Myanmar’s commander-in-chief Min Aung Hlaing, who took over the country after a 2021 coup, has been subject to U.S. sanctions since 2017 due to his role in the campaign against the country’s Rohingya minority. Venezuelan President Nicolás Maduro has also been subject to U.S. sanctions since 2019.
More recently, the U.S. government in August 2020 imposed sanctions on Hong Kong chief executive Carrie Lam in the wake of the city’s National Security Law—a measure that Lam says has forced her to keep “piles of cash” at her home.
Whether or not personal sanctions are coming, Putin may already be acting in ways to preserve his assets. On Feb. 7, German outlets reported that the Graceful—a superyacht reportedly owned by the Russian president—quickly sailed out of Hamburg before completing scheduled repairs.
Never miss a story: Follow your favorite topics and authors to get a personalized email with the journalism that matters most to you.