POLITICS

Obama Announces Sanctions On Those Close To Putin

03/20/2014 12:40 pm ET | Updated Mar 20, 2014

WASHINGTON -- President Barack Obama announced a new round of sanctions against 20 Russians on Thursday, including a number close to Russian President Vladimir Putin.

The move signals a much stronger approach toward Russia just three days after earlier sanctions were met with bemusement and relief from the Russian officials who were sanctioned, as well as from the Russian markets.

The latest list includes top government leaders, such as Sergey Ivanov, Putin's chief of staff, and Vladimir Kozhin, the head of the presidential administrative directorate.

But perhaps more surprising is the inclusion of a number of super-wealthy oligarchs who are personally close to Putin. Brothers Arkady and Boris Rotenberg, Putin's childhood friends and former judo partners, are named. Arkady has a net worth of $4 billion, and Boris is worth $1.7 billion, according to Forbes. Bloomberg reported that Arkady's companies got $7 billion in contracts for the Sochi Olympics. Vladimir Yakunin, head of the lucrative Russian Railways, was also listed. Yakunin got to know Putin in St. Petersburg, where the Russian president launched his political career.

Yury Kovalchuk, a banker and financier with a net worth of $1.4 billion, was included as well. Kovalchuk is believed to bank for Putin, and is the largest shareholder of Bank Rossiya, also targeted by the sanctions. Gennady Timchenko, the 12th richest man in Russia and another person with close ties to Putin, also made the list.

Senior administration officials told reporters on a conference call that the individuals would be banned from conducting business with Americans and barred from using U.S. dollars, and would be blocked from even participating in the world financial system. That could hurt many of the oligarchs, who are believed to hold some or most of their money abroad.

On Wednesday evening, Putin's most prominent opponent, Alexei Navalny, named a list of officials that the U.S. should sanction in a New York Times op-ed. Many of them showed up on the list.

Notable absences were Igor Sechin, chairman of Rosneft, and Alexey Miller, chairman of Gazprom.

A press secretary for Ivanov, Putin's chief of staff, told Interfax that he reacted to the news "with humor."

But at least one oligarch initially responded with caution. Gunvor, a company 44 percent owned by Timchenko, said it was evaluating the prospective costs of the sanctions. "At this time, we are evaluating the potential impact to our business of the inclusion of Mr. Timchenko on this list," the company said in a statement. Putin has investments in Gunvor and may have access to its funds, according to the Treasury Department.

The company reported later Thursday in a statement on its website that Timchenko had sold his 44 percent stake in Gunvor to a fellow co-founder.

"Anticipating potential economic sanctions so to ensure with certainty the continued and uninterrupted operations of Gunvor Group Ltd’s activities, the shares of the company held by Mr. Gennady Timchenko were sold on March 19 from his personal holding vehicle to Mr. Torbjorn Törnqvist personally," the company wrote on its website. "As a result, Mr. Törnqvist has become the majority owner of Gunvor Group Ltd, with an 87 percent stake, and Mr. Timchenko has fully divested his entire holdings in the company. The remaining 13 percent of shares are held by senior employees of Gunvor. There are no outside shareholders."

The company said the date of the sale was Wednesday, before the sanctions announcement, but further sanctions were widely expected. Gunvor had revenues of $93.1 billion in 2012.

This is a developing story and has been updated to include response to the latest round of U.S. sanctions on a number of Russians.

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