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Yet, as Abramovich and other Russian oligarchs are finding, somebody always loves a billionaire. Luckily for Abramovich, those somebodies appear to include Turkish President Recep Tayyip Erdogan. Abramovich, who has attended the ongoing Russian and Ukrainian peace talks being hosted by Erdogan in Istanbul, has reportedly moved not one, but two superyachts to Turkish waters. Reports emerged that he’s flown his lavish private jet to Turkey, a country that has not sanctioned Russian oligarchs.
Even financial safe havens such as the Cayman Islands are implementing sanctions. But Erdogan last week seemed to make a point of rolling out a red carpet for the Russians. “Certain capital groups,” he said, could “park their facilities with us.” A day later, his foreign minister, Mevlut Cavusoglu, told CNBC that sanctioned Russian oligarchs were welcome in Turkey as tourists and investors, as long as their business dealings adhere to international law.
Despite a bevy of new Western sanctions on Russian oligarchs since the Kremlin’s invasion of Ukraine, the Turkish outreach to oligarchs suggests just how hard it could be for the United States, Britain and the European Union to punish a rogue’s gallery of Russian President Vladimir Putin’s richest friends.
When it comes to reining in sanctioned Russian wealth, the West faces a multitude of challenges. The assets of the super-rich are often professionally hidden, with legal ownership buried inside in a Matryoshka doll of shell companies within shell companies. So opaque is the world of asset ownership that the E.U. Tax Observatory, a Paris-based research lab, is proposing a new “European Asset Registry” to cut through the legal subterfuge and establish the owners of significant holdings.
“There are a lot of pieces of information on who owns what, but they are not linked, and they’re not routinely verified,” Theresa Neef, a research fellow at the E.U. Tax Observatory, told me. The asset registry would “gather all the information you have from land registries, from commercial registries, from central securities depositories [and other sources] and link them. This would make it possible to check for Russian oligarchs, but also cases of tax evasion, money laundering and more.”
But after decades that saw real estate markets in cities like London and Miami transformed by Russian wealth, other countries now appear to sense opportunity in the West’s crackdown. Even Russians who have not been blacklisted are getting skittish about holding assets in the West. Vagit Alekperov, CEO of Russian oil and gas company Lukoil, for instance, has not been sanctioned. But he has nevertheless reportedly relocated big-ticket assets like yachts from Western ports. Others, like Abramovich, have been slapped with sanctions in Britain and the European Union, but not in the United States.
That’s created something of a gray area for countries eager to court Russian cash. The Turks aren’t alone. My colleagues reported that a handful of luxury yachts owned by Russian billionaires had been moving toward the Maldives, an island nation in the Indian Ocean that does not have an extradition treaty with the United States, and Montenegro, a non-E.U. nation that for years has struggled with a reputation as a center for money laundering, organized crime and corruption.
Bloomberg News reports that Abramovich — estimated to be worth nearly $14 billion — is just among many wealthy Russians who have been house hunting in Dubai. Like Turkey, the United Arab Emirates has rejected sanctions against oligarchs linked to Putin and is increasingly being viewed as a sanctuary for Russian cash. The same teenage tracker who trolled Elon Musk by monitoring his private jet’s movements also tracked the March arrival in Dubai of a Boeing 787-8 Dreamliner belonging to Abramovich on March 4.
At least 38 business executives or officials linked to Putin own a multitude of properties in Dubai worth more than $314 million, the New York Times reported, citing data compiled by the nonprofit Center for Advanced Defense Studies. Some of those owners are under sanctions by the United States or the European Union.
“Sanctions are only as strong as the weakest link,” Adam M. Smith, a lawyer and former adviser to the U.S. Treasury Department, told the New York Times. “Any financial center that is willing to do business when others are not could provide a leak in the dike and undermine the overall measures.”
Sinan Ulgen, a visiting scholar at Carnegie Europe, told me Turkey has seen a rush of almost 30,000 Russian exiles since Putin’s invasion of Ukraine. Most, he says, are professionals — employees of multinationals, nongovernmental organizations, think tanks and others who have fled Moscow’s crackdown on dissent within Russia, where it is now illegal to even call the invasion a “war.” These are people seeking safe haven, and Istanbul — the city to which most are flocking — is almost sure to see a positive cultural and economic injection from their arrival.
Erdogan may also see the extreme wealth of Russian oligarchs as one way to plug a gaping hole in the Turkish economy, which has suffered a serious bout of inflation under his unorthodox economic policies. Though Turkish officials have sought to make clear they are not condoning transfers or investments that violate international law, they have been equally clear that Turkey is a sanctions-free zone for Russians worried about the security of their wealth in the West.
“This is a very slippery slope,” Ulgen said. Erdogan “is trying to mitigate the economic shock in Turkey, and one way to do this is to attract Russian money that is not under sanctions. That is Turkey’s argument. However, it remains to be seen if even this amount of flexibility will be condoned, particularly by the United States.”
“There is the legal argument that this can be done,” he continued. “But it’s the wrong optics. And there’s no real economic benefit from having a Russian megayacht in a Turkish port.”