‘I don’t see a single beneficiary of this crazy war’, wrote the self-made Russian billionaire Oleg Tinkov on his Instagram page on 19 April 2022, less than two months after Russia invaded Ukraine. ‘Innocent people and soldiers are dying every day. This is unacceptable’. His 634,000 followers were stunned to read his anti-war declaration: ‘The generals are waking up with a hangover and realise they have a shit army. Of course, there are morons who draw “Z” but 10 per cent of any country are morons. 90 per cent of Russians are against this war… Stop this massacre.’
The next day Putin’s officials contacted the outspoken tycoon’s executives and threatened to nationalise his bank unless he sold his shares for 3 per cent of their real value. Six months later the abrasive Tinkov renounced his Russian citizenship: ‘I cannot and will not be associated with a fascist country that started a war with their peaceful neighbour and is killing innocent people daily.’
Lawyers and anti-Putin activists are increasingly concerned at the arbitrary and capricious way people are being sanctioned
And yet the British government imposed sanctions on Tinkov and accused him of ‘receiving benefits from the Russian government’ because he owned enterprises of ‘strategic importance’ to the state. In fact, the outspoken entrepreneur is not an Oligarch. His wealth is from breweries, food production, technology and banking. But he is one of many wealthy and ordinary Russians wrongly caught up in the net of EU and UK sanctions.
The UK government has sanctioned 1,471 Russian individuals where it has ‘reasonable grounds for suspecting’ the person has been involved in destabilising Ukraine or threatening its independence or obtaining a financial benefit from its support for the Russian government.
But the imposition of sanctions has granted ministers – not parliament – unprecedented powers and precluded the courts from examining individual cases with little due process. The consequence is that the bank accounts of many normal Russian citizens have been frozen with no legal recourse. This includes a headteacher of a London school who just happened to be Russian and a former wife of a Russian businessman despite being divorced for 15 years. Russian tycoons with no state contracts are forced to live on monthly allowances while they wait for years until sanctions are lifted. ‘The sanctions against some Russians and some Oligarchs are discriminatory’, Steven Kaye KC told me. ‘I know of a case where the EU sanctioned an Oligarch on a Friday and the UK government sanctioned him on Monday. There is no way the government did their due diligence. They just accepted the EU decision at face value.’
The implications for the rule of law are chilling. The decision to sanction an individual is based on a ministerial decision not a court finding. And the quality of evidence required is staggeringly low. Many of the case files justifying sanctions by the EU contain comically minimal standards of proof – social media posts, online publications, recycled news articles and corporate websites. Terms like ‘connected to’, ‘close ties’ and ‘associates of’ Putin and the Kremlin are liberally used as criteria for imposing sanctions against an individual. I have been investigating and writing about Oligarchs for the past 20 years and I could not get away with this level of evidence.
As the specialist sanctions lawyer Robert Dalling told me: ‘The “reasonable grounds to suspect” test is much lower than the standard of proof in criminal trials (where a jury must be satisfied beyond a reasonable doubt of the defendant’s guilt). It is also lower than the civil standard of proof (where the court must be satisfied of the defendant’s guilt on a balance of probabilities).’
Lawyers and anti-Putin activists are increasingly concerned at the arbitrary and capricious way people are being sanctioned. ‘The UK is supposed to be upholding the rule of law by supporting Ukraine but in fact they are undermining it’, said Steven Kaye KC. ‘The situation is like world war two when ordinary Germans – not Nazis – were interned purely for being German. We are losing sight of why we are in Ukraine and a sense of balance. We should impose the sanctions more selectively. The government is sanctioning Russians who are anti-Putin. This is dangerous for these people because if they challenge the sanctions on the basis of being anti-Putin then they expose themselves to recriminations, especially in Russia. People also assume all those sanctioned are pro-Putin when this is not the case.’
The UK government has also expressed an interest in confiscating frozen assets and using them to increase financial and military support for Ukraine. So far there has been no change in the law to this effect. But Canada has amended its laws governing sanctions to include powers of confiscation. It can now apply to the court for an order to permanently confiscate an asset that has been frozen. The court is not required to adjudicate on whether any wrongdoing has occurred or even whether the assets in question have come from lawful sources. In reality the new law has granted the Canadian state the power to seize an asset purely on the basis of the government’s original decision to sanction that asset.
These measures would be highly punitive and are uncannily similar to the Russian state seizing the assets of Yukos Oil because its owner Mikhail Khodorkovsky funded opposition groups to Putin. Anti-corruption campaigners like Gretta Fenner, head of the Basel Institute on Governance, a foundation that investigates Oligarchs and financial crime, are strongly opposed to confiscation, even if the motive is to raise funds to rebuild Ukraine. ‘Confiscating assets without proof they are the proceeds of crime is akin to expropriation’, she told me. ‘This is done by dictators not by democracies that adhere to the rule of law and international human rights. Financial support for Ukraine is vital and urgent. But if western governments undermine their own commitments to the rule of law to obtain that money then they are violating the very principles that Ukraine is fighting to preserve.’
For sanctioned Russians – supporters and enemies of Putin – the freezing of their assets without being able to challenge the evidence in a court of law is akin to Stalin’s show trials of the 1930s. ‘It is a very dangerous situation’, a sanctioned Russian businessman told me. ‘We have been found guilty with no trial and no opportunity to challenge the veracity of the case against us.’
The Foreign Office claims that every sanctioned individual ‘has the right to challenge their designation (sanctioned) and there is a legal route to do so.’ At best, this is economical with the truth. ‘A sanctioned person can request a minister to amend or revoke their designation’, the leading sanctions lawyer Anna Bradshaw told me. ‘But the chances of success are slim… There is no recourse to the UK courts unless and until a ministerial review has first been exhausted. There are also constraints imposed on the court’s scrutiny which is not a full judicial review.’
For lawyers brave enough to represent sanctioned Russians, it is a perilous assignment. One received death threats after pointing out they are entitled to legal representation, given the evidence is so weak. ‘I received a lot of criticism – some from politicians – for acting for people who were threatened with sanctions because of their association with the vile Putin’, said David Pannick KC. ‘But they are entitled to have their legal rights defended as much as an alleged rapist or murderer and I will continue to act for people however objectionable’. Pannick cites the barrister in John Mortimer’s Rumpole of the Bailey who declared: ‘I defend murderers but that does not mean I approve of murder.’
Privately, High Court Judges are concerned at the lack of parliamentary and judicial scrutiny of the sanctioning of some Russians and how the separation of powers between parliament, the civil service and the judiciary is being undermined. But there is an even more serious consequence of the UK’s sanctions policy: it helps Putin. ‘The West has made a huge mistake in sanctioning so many Russians without clear evidence that they support Putin or finance the war’, an opposition activist told me. ‘It looks like they are punishing all Russians and so their anger has made them support the war. It has enabled Putin to accuse the west of punishing Russians, breaching international law and it enhances his agenda that the west is the aggressor’.
The premise of the sanctions against the Oligarchs is they will then persuade Putin to stop the war. This is a risible and ill-informed strategy. ‘A diplomat suggested that we sit down around the table with Putin and persuade him to call off the invasion’, a sanctioned businessman told me. ‘It just shows the ignorance of the West. I am more likely to end up in jail’. The reality is that power in Russia is exercised by a tiny group of officials appointed by Putin largely from the KGB and the FSB.
Of course, there are Oligarchs who are demonstrably close to Putin, support the war, benefit commercially, and finance his war machine. There is a case for them to be sanctioned. But the implementation of the policy has been legally dubious and politically counter-productive. As Oleg Tinkov said recently: ‘I support the UK government’s decision to sanction people who back Putin or facilitate the war. It’s sad they mistakenly thought I was one of those people. Lifting sanctions on me would be fair and send a signal that western sanctions are not aimed at all Russians but only people who prop up Putin.’
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