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Biden is threatening Putin with personal sanctions over Ukraine. What to know about this pressure tactic

The extent of Russian President Vladimir Putin’s personal wealth is shrouded in mystery. (Sputnik/Reuters)
As concerns grow that Moscow will again invade Ukraine, President Biden has threatened the use of financial sanctions and export controls that could wreak havoc on the Russian economy.

The United States said the measures would be the most punishing Russia has faced, and Biden said in late January that he could envision personal sanctions against Russian President Vladimir Putin, in what would be an unprecedented move against the leader of a major power. (Moscow, which annexed Crimea in 2014, has denied plans to invade, though it has massed more than 100,000 troops around Ukraine’s borders.)

Here’s what you need to know about personal sanctions that could be deployed against Putin.

Why is Biden threatening Putin with personal sanctions?

Putin has long wanted to reestablish a sphere of influence over former Soviet states such as Ukraine, which occupies an important place in Russian history. But Ukrainian voters have repeatedly chosen pro-Western governments and policies in recent years, and while Kyiv is not a member of NATO, it has established strong security ties with the Western military alliance.

Biden has ruled out deploying U.S. ground troops to Ukraine, but he has sent a significant amount of weapons to Kyiv in recent weeks in an effort to deter Russian aggression. The threat of sanctions is another signal that Washington can impose “massive consequences that were not considered in 2014,” a senior administration official, who spoke on the condition of anonymity on terms set by the White House, told reporters in late January.

Between 2014 and 2021, the United States and Europe imposed sanctions on more than 800 Russian individuals and entities for alleged “malign” activities, including the annexation of Crimea. The measures have not prompted the Kremlin to relinquish control of the region, but experts say they contributed to a significant slowdown in Russian economic growth over the years.

“The Russian economy is not likely to grow significantly again until the Kremlin has persuaded the West to ease the sanctions,” the Atlantic Council wrote in a 2021 report.

What are personal sanctions?

Biden did not explicitly say what kind of measures he could take against Putin. But the Specially Designated Nationals and Blocked Persons List, or SDN List, maintained by Treasury’s Office of Foreign Assets Control, is one potential sanction.

Inclusion on the list essentially bars any businesses with significant U.S. links from working with the individual and blocks access to all property or other assets that the individual has within U.S. jurisdiction. Washington has “tremendous power” because of the global dominance of the U.S. dollar and the critical role American banks play in the international financial system, said Jordan Tama, an American University professor specializing in security policy.

Other targeted measures could also involve travel restrictions, which would complicate life for high-level foreign leaders by limiting access to the United Nations, which is headquartered in New York City.

The United States is required to issue visas expeditiously to all foreign diplomats traveling to New York for U.N. events, but Washington can strictly constrain their movements. Even as the Donald Trump administration was considering the use of sanctions against then-Iranian Foreign Minister Javad Sharif in 2019, it still granted him a visato attend a U.N. meeting. But his access was largely restricted to U.N. headquarters, the Iranian mission six blocks away, and the nearby residence of Iran’s U.N. ambassador.

Which world leaders have been personally sanctioned by the United States?

It is rare for heads of state to be personally sanctioned, particularly when Washington still maintains diplomatic relations with their governments, Tama said.

It is even more unusual for the leader of a major power to be targeted. Those who have faced such penalties are usually global pariahs who have been accused of gross human rights violations, such as former Libyan dictator Moammar Gaddafi, Tama said.

Hong Kong leader Carrie Lam was placed on the SDN list after pushing through a draconian national security law and cracking down on pro-democracy activists in the Chinese territory. She said in 2020 that she keeps “piles of cash” at home and is unable to open a bank account after being targeted by U.S. sanctions.

Some U.S. lawmakers unsuccessfully called for personal sanctions to be imposed on Saudi Arabian Crown Prince Mohammed bin Salman after U.S. intelligence concluded that the kingdom’s de facto leader “approved” the operation that led to the 2018 slaying of Washington Post contributing columnist Jamal Khashoggi.

“The relationship with Saudi Arabia is bigger than any one individual,” Secretary of State Antony Blinken said last year.

How could personal sanctions affect Putin?

Placing sanctions on Putin would put him among “select, ignominious categories of leaders who are truly beyond the pale,” Tama said.

But while such measures send a message, they may have only “marginal utility,” said Brian O’Toole, a sanctions specialist and former U.S. Treasury Department official.

Locating assets linked to Putin may be a challenge for Washington. Over the years, many have tried to gauge the true extent of his personal wealth, with some pegging it at as high as $200 billion. The detained Russian opposition leader Alexei Navalny has accused Putin of building himself a gigantic palace by the Black Sea using a complex “slush fund.” (A government spokesman denied that the property is connected to Putin.)

But on paper, he is hardly among the ultra-rich, with personal disclosures suggesting an annual salary of just over $120,000. The Pandora Papers investigation, which was conducted by The Washington Post and other news organizations, showed that Putin’s finances are obscured. Current and former U.S. officials suspect that Putin uses “wallets,” or trusted associates enlisted to secretly hold money and property in their names on his behalf.

The Treasury Department has previously targeted Russian billionaires with close ties to the Kremlin. Many Russian oligarchs have significant assets in London, and British Foreign Secretary Liz Truss on Monday pledged to expand the U.K. sanction regime to reach those who “support Russia’s aggressive actions against Ukraine” or are of “wider significance” to Moscow.

Sanctions on Kremlin associates have dented the fortunes of Russian elites: oligarch Oleg Deripaska sued the U.S. government in 2019 after he and his companies were sanctioned for allegedly furthering Russia’s “malign activity” around the world.

According Deripaska’s lawsuit, the aluminum magnate saw his net worth shrink by more than $7.5 billion, or 81 percent. The sanctions on his companies were lifted, but he is still fighting the ones placed on him personally.

Despite this, Mark Galeotti, a British expert on the Russian security services, said there was no evidence that targeting oligarchs in London would positively influence Russian foreign policy in the near future.

“Putin has been trying for years to ‘de-offshorize’ Russian money and bring it back within his grasp. I suspect that in the main, his view would be that if rich Russians have been keeping their money in London and lose some or all of it, then that’s their tough luck,” Galeotti wrote in an email.

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