Sanctions related to the Crimea crisis so far have been levied on individuals the EU said were responsible for the “misappropriation of state funds” and “human rights violations,” according to the regulation passed by the Council of the European Union on March 5. President Obama echoed the language in a briefing with journalists at the White House the next day.
Lisin’s Steel
“Russians who are making bank transactions and opening new accounts will now be confronted with increased suspicion,” Valery Tutykhin, an attorney with John Tiner & Partners, a Geneva-based law firm that specializes in wealth management, said in an e-mail.
The crisis also threatens to derail the relationship between the West and the Russian businesses the billionaires control. Among the companies potentially affected is OAO Novolipetsk Steel, the country’s most-valuable steelmaker, which is controlled by Vladimir Lisin, Russia’s 13th-richest person. The company derived 21 percent of its $12.1 billion in 2012 revenue from Europe, according to data compiled by Bloomberg. Sergey Babichenko, a spokesman for NLMK, declined to comment.
“In the event of a European and U.S. ban on exports of the metal, NLMK’s position would be weakest among Russian steelmakers, because it ships steel slabs to its own mills in Europe,” Kirill Chuyko, head of equity research at BCS Financial Group said. “We see such actions as unlikely for the time being.”
Amicable End
With its stock market falling and interest rates rising, Russia has suffered most of the financial pain the crisis has inflicted.
“To the extent that they can, the businessmen in Moscow will be making their sentiments and voices heard,” said Credit Suisse’s O’Sullivan. “I’m not sure the Kremlin will listen to them.”
Billionaire Naguib Sawiris, Egypt’s second-richest person, who’s done business with North Korea, Russia and Pakistan through his telecommunications companies, said he’s concerned about potential sanctions.
“Putin has proven that toward the end of any crisis, he always goes back to reason and finds compromises,” Sawiris, 59, said in a March 14 e-mail. “Therefore, I bet this crisis will end amicably.”