Russian Oligarch Roman Abramovich Races to Outpace Western Sanctions
When they finally came this month, following Russia’s invasion of Ukraine, the penalties were on a scale that he hadn’t expected, according to people familiar with the matter. They have triggered a game of cat-and-mouse, with the 55-year-old rushing to move chunks of his wealth out of reach of a rapidly expanding dragnet for his assets.
The U.K., the European Union, Canada and Australia have subjected him to travel restrictions and have frozen his assets in those jurisdictions. U.S. officials, too, are readying sanctions against Mr. Abramovich, according to people familiar with the matter, but the timing remains uncertain, and Washington may ultimately decide not to target him.
London and Brussels accuse him of benefiting from close ties to Mr. Putin. By punishing Russia’s business elite, Western governments aim to apply further pressure on Moscow to alter course in Ukraine.
In recent weeks, Mr. Abramovich has tried to sell some U.S.-based funds. He put his trophy asset, London soccer club Chelsea FC, up for sale, and did the same with a 15-bedroom London mansion. An investment vehicle for technology startups and renewable-energy ventures, long controlled by Mr. Abramovich via a series of trusts, was moved into the ownership of a business associate hours after the invasion started, according to filings.
Mr. Abramovich made a fortune in the oil business during Russia’s lurch from communism to capitalism. His asset purchases and his philanthropy earned him warm welcomes in Western capitals. In the U.K., he pumped money into Chelsea, turning it into a championship club and earning him near-celebrity status in London.
“He tried to dissociate from Russia,” said Andrey Movchan, a former Russian banking executive and director of the Economic Policy Program at the think tank Carnegie Moscow Center, who had business dealings with Mr. Abramovich. “I don’t think he or anyone else expected what would come.”
In the immediate wake of the invasion, Mr. Abramovich’s representatives said, he was involved in trying to help peace efforts between Ukraine and Russia. As public opinion, especially in the U.K., turned against him, it became clear he couldn’t hang onto his most prized assets, said one person close to him.
He largely disappeared from public view until Monday, when he was photographed sitting in an airport lounge in Israel, masked, scrolling on his phone and waiting to board a private jet that eventually landed in Moscow.
Many of the houses and yachts acquired during his spending spree are now at risk of being caught up in a net in which governments can freeze assets indefinitely, without having to prove criminality or other wrongdoing. He can challenge those freezes in most cases, but that could prompt years of legal wrangling.
For now, Mr. Abramovich won’t be entitled to proceeds from any sale of the soccer team, the U.K. government has said. Some of his funds have been frozen in the U.S., pending guidance from the U.K. on its sanctions. British restrictions are so detailed that he is unable to pay ground rent he owes to the Crown Estate, which manages properties owned by the Queen, for his London mansion.
His two yachts recently set sail from waters that could have been subject to sanctions. Other oligarchs’ vessels were impounded in France and Italy. A leading Portuguese rabbi who helped Mr. Abramovich obtain Portuguese citizenship in 2021 was arrested as part of a wider investigation in Portugal involving alleged influence-peddling, forgery, money laundering and tax fraud, according to people familiar with the case.
Mr. Abramovich had paid $36.4 million in 2008 for a mansion near Aspen, Colo. Earlier this week, a commissioner for Pitkin County, Greg Poschman, said he wrote to state and federal officials urging action to avoid any liquidation or transfers of assets involving Mr. Abramovich’s homes there. “People in the community are concerned about this and asking what can be done,” Mr. Poschman said.
It took weeks for the U.K. and the EU to sanction Mr. Abramovich. The British government held off in part because it worried that he would contest the designation with a lawsuit, according to U.K. officials.
Even though the U.K. has sanctioned Mr. Abramovich, U.S. officials have been wary of doing so because of his minority stake in steel company Evraz PLC, according to one person familiar with the matter. Federal officials, the person said, worry that a clampdown on Mr. Abramovich could disrupt that business, possibly affecting global steel prices as well as workers at plants the company owns in Oregon and Colorado. In the U.K., Evraz hasn’t been sanctioned.
Officials across the West are trying to figure out what the tycoon owns and to ensure he doesn’t sell it. The British government estimates Mr. Abramovich’s wealth is around $12.3 billion. His known properties include a French château in Cap d’Antibes and numerous London properties, according to corporate and property filings. Notable art includes Francis Bacon’s “Triptych, 1976,” which he bought for $86.3 million, and Lucian Freud’s “Benefits Supervisor Sleeping,” purchased for $33.6 million. He owns a Boeing 787-8 Dreamliner, which is currently in Dubai.
Charles Delingpole, chief executive of ComplyAdvantage, a company that helps banks and companies screen for risks, said its platform currently lists about two dozen companies affiliated with Mr. Abramovich.
For years, Mr. Abramovich kept a relatively low profile in the West. When he arrived in London to purchase Chelsea in 2003, the club’s then-owners had to Google who he was, according to people who were present.
A 2012 ruling by a British court in a lawsuit filed against Mr. Abramovich summarized the major events of his life. The suit was brought by a former business partner, Boris Berezovsky.
His parents died when he was a small child, and he was brought up by relatives in a remote part of Russia. He quit college and took a job as a welder. When the fading Soviet Union began to allow private enterprise, he started a small business making plastic toys, including rubber ducks. By the early 1990s, as the old Soviet economy crumbled, he had become a successful oil trader.
His big break came in 1994, during a yachting holiday in the Caribbean, when he met Mr. Berezovsky, a Russian tycoon 20 years his senior. He successfully pitched Mr. Berezovsky on a plan to merge two oil businesses. Mr. Berezovsky, a businessman with ties to former President Boris Yeltsin, offered him the political cover to push such a deal through. The resulting oil company was called Sibneft.
In the U.K. lawsuit, Mr. Berezovsky, who fled Russia after falling out with Mr. Putin, accused Mr. Abramovich of later bullying him into selling a stake in Sibneft for much less than its true value.
The court concluded that the deal between Mr. Berezovsky and Mr. Abramovich was “inherently corrupt,” a description accepted by Mr. Abramovich’s lawyer during a court hearing in 2011. That lawyer argued that was how business was done in Russia at the time. After the London high court ruled against Mr. Berezovsky, he was found dead in a house in England in an apparent suicide.
Sibneft was later privatized in a deal that cemented Mr. Abramovich’s status as a billionaire. He went on to help found United Co. Rusal, one of the world’s biggest aluminum groups.
After Mr. Putin became president in 2000, he initially turned the screw on the oligarch class, jailing some of the country’s richest men. Mr. Abramovich was spared. Around that time, Mr. Abramovich became the governor of a frozen chunk of Arctic called Chukotka. He began pumping in millions of dollars to help transform the desolate region.
“I started business early, so maybe that’s why I’m bored with it,” Mr. Abramovich told The Wall Street Journal at the time. His enthusiasms included listening to Russian rock group Spleen and watching movies like “Straw Dogs” and “Pulp Fiction,” the Journal reported.
He started investing around the world, including in art. In 2005, he sold a 73% stake in Sibneft to state-owned gas titan Gazprom for more than $13 billion. In 2006, he bought a minority holding in the steel group Evraz. He also has a stake in Norilsk Nickel. A Moscow-based company called Millhouse LLC manages many of the assets of Mr. Abramovich and his associates.
In the early 2000s, he began spending more time in London. When he bought Chelsea, the BBC asked him why he decided to sink more than $100 million into a soccer team. “Yes, I know what people say,” he replied. “But there are lots of rich, young people in Russia. We don’t live that long, so we earn it and spend it.”
In 2018, U.K.-Russia relations deteriorated following the poisoning in England of a former Russian spy. The U.K. didn’t renew Mr. Abramovich’s visa. That led him to cancel plans to spend more than $1 billion building Chelsea a new stadium in the heart of London. From then on, he was hardly seen at Chelsea games.Russia’s Oligarchs: Lifestyles of the Rich and Sanctioned
That same year, he became a citizen of Israel. Before the invasion of Ukraine, several representatives of leading Israeli cultural, academic and medical institutions signed a letter to the U.S. ambassador in Israel warning of the financial consequences of sanctioning Mr. Abramovich, a major donor to Israel’s Yad Vashem holocaust memorial.
On the day Russia invaded Ukraine, some British lawmakers wanted to know why Mr. Abramovich wasn’t among the first Russians sanctioned by the U.K. That same day, control of British Virgin Islands-registered Norma Investments Ltd., an investment vehicle that corporate disclosures indicate Mr. Abramovich had previously controlled, shifted to David Davidovich, a close business associate.
Two days later, Mr. Abramovich said he was transferring “stewardship and care” of Chelsea to the trustees of the team’s charitable foundation. The club, however, wasn’t for sale, and he remained the owner.
As the clamor by British lawmakers grew louder, Mr. Abramovich put the club on the market and said the proceeds would go to charity. Around 20 entities have expressed early interest, and there is a Friday deadline for a first round of offers.
At Stamford Bridge, Chelsea’s home stadium, Mr. Abramovich still has supporters. At a recent match, Chelsea fans chanted his name during a minute of applause held in support of Ukraine.
”I hope that I will be able to visit Stamford Bridge one last time to say goodbye to all of you in person,” Mr. Abramovich wrote to Chelsea fans when he put the club up for sale. A few days later, he was banned from traveling to the U.K.
—Patricia Kowsmann, Dov Lieber, Vivian Salama and Justin Scheck contributed to this article.
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