Putin's shadowy wealth could be impossible to target with sanctions

• The US moved on Friday to impose direct sanctions on Russian President Vladimir Putin.
• The move is a strong condemnation, but may not have much of a tangible financial impact.

If there's one thing we know about Russian President Vladimir Putin's wealth, it's that we just don't know how much of it he has — or where it might be.

He might be the richest person in the world, according to financier Bill Browder, who testified in 2017 that he believes Putin "has accumulated $200 billion of ill-gotten gains." Investigations have variously linked him to a $1.4 billion palace on the Black Sea and a $4 million Monaco apartment linked a woman who was reportedly his mistress.

The Biden administration just announced that it will sanction Putin personally. The EU and UK have already directly sanctioned Putin and foreign minister Sergey Lavror, the BBC reports, which includes a freeze on their assets in those countries.

However, the unknowability of what, exactly, Putin owns makes it difficult to actually gauge what impact a direct sanction would have on his assets.

"Hitting the bank accounts of Kremlin officials and Putin cronies can only be marginally effective when these individuals treat Russia's resources as their own personal piggy bank," Edward Fishman, a nonresident senior fellow at the Atlantic Council, and Chris Miller, a visiting fellow at the American Enterprise Institute, wrote in a Politico op-ed. On Friday, Fishman wrote on Twitter that "sanctions will not impoverish Putin or change his life in any meaningful way."

That means that wider sanctions on the Russian economy, rather than a direct sanction on individuals, might have more of a tangible impact. For example, sanctions against Russian oligarchs who support Putin could be a meaningful way to target him, according to Fishman. The US has already sanctioned some Putin allies, freezing any assets they have in the country and blocking them from crossing US borders.

Following the invasion of Ukraine, MOEX — Russia's stock exchange — crashed and closed 33% lower, losing the 22 richest billionaires in Russia $39 billion in just one day, according to the Bloomberg Billionaires Index.

When it comes to directly hitting Putin's assets, his holdings are infamously shadowy and disperse, and his actual fortune may be entangled with a whole slew of associates and wealthy Russians. The International Consortium of Investigative Journalists 2016 report on the Panama Papers found that a shadowy network of people associated with the Russian president "has shuffled at least $2 billion through banks and offshore companies." A Guardian investigation into the Pandora Papers in 2021 found that other associates of Putin held valuable assets in Monaco.

Kremlin spokesman Dmitry Peskov said the leaks were a "set of largely unsubstantiated claims" at the time, according to Al Jazeera.

In January, imprisoned Russian activist Alexei Navalny, released a video that purportedly shows the $1.4 billion palace on Russia's Black Sea belonging to Putin. Navalny's allies released hundreds of images of what they claimed are the inside of Putin's secret palace. Russia's media regulator reportedly told at least 10 news outlet to remove articles on the alleged palace. Navalny, who was poisoned with a nerve agent in August 2020, is in a prison outside Moscow and faces more charges.

Peskov, the Kremlin spokesperson, said after the release of that report that "these are all absolutely unfounded statements. This is pure nonsense and a compilation, and there is nothing else there."

According to Forbes, the Kremlin's official financial disclosures have Putin's 2020 income coming in around $140,000; the only assets he reportedly claims are a handful of cars, a garage, an apartment, another apartment to use, a trailer, and two parking spots.

So, as the Guardian reports, sanctions from the EU and UK against Putin directly are "largely symbolic." It's still a rare and impactful condemnation against Putin. The sanctions also come after Ukraine's foreign minister, Dmytro Kuleba, had previously asked partners to impose more.

"Hit his economy and cronies. Hit more. Hit hard. Hit now," Kuleba tweeted on Wednesday.