Notorious Russian oligarchs continue to profit from trade with Europe – media

A report by The Insider has revealed that Russian oligarchs close to Vladimir Putin continue to profit from exports to the West, circumventing sanctions through a loophole that allows companies to operate in EU markets provided that the share owned by the sanctioned individuals is less than 50%. Source: The Insider Details: The report highlights how some of Russia's most controversial oligarchs, including Gennady Timchenko, Alisher Usmanov and Oleg Deripaska, are earning billions from trade with Europe.

If an oligarch is sanctioned, that restriction does not automatically apply to his assets.

Sanctions are triggered when an individual's combined stake reaches 50%. Alternatively, if there are several sanctioned co-owners, they must hold half of the shares in total. Some oligarchs therefore evade sanctions by reducing their stakes. Oleg Deripaska, for example, has decreased his stake in En+ and Rusal.

Currently, Deripaska controls 35% of En+, which itself owns nearly 57% of aluminium giant Rusal. According to The Insider, Deripaska uses earnings from the West to maintain his own private military company, which is fighting in Ukraine. Deripaska's fortune increased by more than 50% between 2022 and 2024 and, according to Forbes, now stands at US£2.8 billion.

Viktor Vekselberg, the second-largest shareholder in Rusal, has avoided EU sanctions and continues doing business in Europe.

Despite meeting Putin during the war as a member of the group of businessmen closest to him, Vekselberg remains untouched by sanctions. His companies are involved in the production of missiles used to bomb Ukrainian territory. Another way that oligarchs bypass sanctions is by transferring shares to company managers (with a buy-back option), family members, or other individuals under their control.

This is the strategy used by Alisher Usmanov, an oligarch who is close to United Russia party chairman Dmitry Medvedev. Usmanov reduced his stake in USM Holdings to 49%, which allowed the group's companies to continue operations. After Usmanov was sanctioned by the EU, USM was able to announce that these sanctions would not affect companies within the group.

USM includes Metalloinvest, the largest iron ore company in Russia and the CIS. Metalloinvest enterprises export their products to European countries. Usmanov's business partner in Metalloinvest, Andrey Skoch, a State Duma deputy from the United Russia party, has been sanctioned, but the business is registered in the names of his father Vladimir and daughter Varvara, who are not subject to EU restrictions.

Since the beginning of the full-scale war, the fortunes of Usmanov and the Skoch family have grown to US£13.4 billion and US£6.7 billion respectively. Taken together, they have become nearly US£4 billion richer in two years. Other beneficiaries of European trade include Andrey Guryev, another United Russia party member, and his partner Vladimir Litvinenko, who is believed to have written Putin's dissertation when he was his university supervisor.

The Guryev family owns 48.5% of PhosAgro, Russia's largest producer of phosphate fertilisers. Litvinenko transferred over 20% of PhosAgro shares to his wife Tatyana in 2022. Neither Tatyana nor Litvinenko is subject to EU sanctions, which means PhosAgro can freely export products to Europe.

Litvinenko's fortune has doubled since 2022, reaching US£3 billion. Andrey Melnichenko's company EuroChem also exports fertilisers to Europe. Melnichenko reduced his stake in the company after he was sanctioned.

Roman Abramovich continues to profit from trade with Europe through his 28.64% stake in Evraz, a major metals and mining company which exports to France and Czechia.  Abramovich is also a minority shareholder in Norilsk Nickel. Its principal owner, Vladimir Potanin, is not sanctioned, allowing Norilsk Nickel not only to continue exporting its products, but also to own production facilities in Europe.

Gennady Timchenko, aka "Putin's wallet", holds stakes in Novatek (23.49%) and Sibur (17%) as a junior partner to billionaire Leonid Mikhelson.

Mikhelson, the primary owner of these companies, is not subject to EU sanctions, which means that the companies Timchenko is profiting from remain unaffected.

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