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Trump just hit Russian oligarchs with the most aggressive sanctions yet

The mega-wealthy oligarchs are seen as close to the Kremlin but not actually members of President Vladimir Putin’s government.

by Greg Walters
Apr 6 2018, 2:47pm

The U.S. just slapped sanctions on a new Russian target: mega-wealthy oligarchs seen as close to the Kremlin but not actually members of President Vladimir Putin’s government.

The Trump administration’s move, announced on Friday, affects 38 Russian individuals and businesses, including at least one oligarch with a prominent spot in the investigation into Russian meddling in the U.S. election: Oleg Deripaska. U.S. officials called the sanctions a blanket punishment for Russia’s aggressive international posture, including interfering in the U.S. 2016 election.

For Putin, these new sanctions are even getting personal: One of the targets is a man reported to have married, then separated from, Putin’s daughter.

The sanctions target seven oligarchs and 12 companies under their ownership or control, 17 senior Russian government officials, and a state-owned Russian weapons trading company and its subsidiary, a Russian bank. While the move is aimed, in part, at Russia’s role in the U.S. 2016 election, senior U.S. government officials also stressed that the new measures seek to penalize Russia’s recent bout of international troublemaking more broadly, including its support for Syrian President Bashar Assad and military activity in eastern Ukraine.

“This set of designations is not in response to any single event or issue,” a U.S. senior administration official told VICE News. “Rather, the United States is taking these actions in response to the totality of the Russian government’s ongoing and increasingly brazen pattern of malign activities across the world.”

Some of the list’s biggest names are prominent billionaires who control vast international business empires, like Deripaska, the founder of conglomerate Basic Element, who’s worth an estimated $6 billion; and Viktor Vekselberg, an industrial tycoon worth an estimated $15 billion. Also on the list is Alexei Miller, the longtime head of Russia’s biggest state-owned natural gas company, Gazprom.

The U.S. has also previously sanctioned Yevgeny Prigozhin, the man known as “Putin’s Cook” thanks to his background in catering, after accusing him of helping run an online operation aimed at meddling in the U.S. 2016 presidential election, known as Russia’s “troll factory.”

At the time, Putin’s cook laughed it off. “It doesn’t bother me. Except now I’ll stop going to McDonald’s,” he said.

READ: The U.S. just sanctioned Russia's infamous "Troll Factory" and "Putin's chef"

“We’re designating Oleg Deripaska, who operates on behalf of the Russian government,” the senior official told VICE News.

“Deripaska has said that he does not separate himself from the Russian state,” the Treasury Department said in a statement. “He has also acknowledged possessing a Russian diplomatic passport, and claims to have represented the Russian government in other countries.”

The sanctions also specifically name Deripaska’s companies, aluminum giant Rusal and energy concern EN+.

“Basic Element is aware of its inclusion in the OFAC's SDN List,” a spokesperson for Deripaska’s holding company wrote in an email to VICE News, referring to the Treasury Department’s Office of Foreign Assets Control’s Specially Designated Nationals list. “The Company regrets this development and is currently analysing the situation with its legal advisors.”

A representative of Vekselberg in Moscow did not immediately respond to a request for comment.

In late March, two people familiar with the matter told VICE News that Congressional investigators are probing the relationship between Deripaska, Trump’s former campaign chairman Paul Manafort, and Manafort’s longtime associate during his years of work in Ukraine, Konstantin Kilimnik.

READ: Paul Manafort, a mysterious Russian jet, and a secret meeting

A "strong move"

Friday’s sanctions are a “strong move,” Ambassador Daniel Fried, a former State Department official who served as Coordinator for Sanctions Policy wrote in an email to VICE News. “The pros are on the case.”

Yet the move still isn’t backed by a broader, consistent approach to Russia from the U.S. government, Fried said. In a call in late March, Trump and Putin discussed holding a summit in the near future. On Monday, the Trump administration confirmed the meeting may even be held in the White House itself.

“Still missing is a comprehensive Russia policy from this administration which the President supports,” Fried wrote. “But one step at a time, and this is a good step.”

The document also names Kirill Shamalov — who, according to reports by Bloomberg, married and then separated from Putin’s daughter. Shamalov’s marital status and relationship to Putin have long been difficult for reporters to independently confirm, thanks to Putin’s famous penchant for secrecy about his family. But in discussing the sanctions on Friday, a senior U.S. government official told VICE News that Kirillov, indeed, had married Putin’s daughter.

“Russian oligarchs and elites who profit from a corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities,” U.S. Treasury Secretary Steven Mnuchin said in a statement.

Konstantin Kosachev, chairman of the international affairs committee in Russia’s upper house of parliament, called the sanctions unfriendly and baseless, the state-run Interfax agency reported.

The additions Friday bring the total number of Russian individuals and entities sanctioned by the U.S. up to 189.

Cover image: Russia's President Vladimir Putin, left, and Russian metals magnate Oleg Deripaska, right, walk to attend the APEC Business Advisory Council dialogue in Danang, Vietnam, Friday, Nov. 10, 2017. (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo via AP)