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Putin Faces Sanctions, but his assets remain an Enigma

On paper, the Russian president appears to own very little. Yet estimates put his hidden wealth well over $100 billion.

By Mike McIntire and Michael Forsythe for the New York Times - Feb. 26, 2022

When Western governments announced on Friday their intention to freeze assets belonging to President Vladimir V. Putin of Russia as punishment for invading Ukraine, there was no indication they knew of significant holdings that could be tied to him.

In fact, very little is known about what Mr. Putin owns and where it could be. Despite years of speculation and rumor, the extent of his wealth remains maddeningly opaque, even as billions of dollars have sluiced through the accounts of his close friends and luxury properties have been connected to family members.

Officially, Mr. Putin earns about $140,000 a year and owns a small apartment, according to his public financial disclosures.

But that would not account for “Putin’s Palace,” a vast estate on the Black Sea estimated to have cost more than $1 billion, with a Byzantine ownership history that does not include the Russian president but has been linked to his government in various ways.

Nor would the disclosures account for “Putin’s Yacht,” a $100 million luxury vessel long tied to him in speculative news reports. (The yacht, Graceful, was tracked leaving Germany for Russia just weeks before the invasion of Ukraine.)

There is also the $4.1 million apartment in Monaco, purchased through an offshore company by a woman reported to be Mr. Putin’s lover. And there is the expensive villa in the South of France linked to his ex-wife.

The problem for the United States and its allies is that none of these assets can be directly connected to the Russian president.

Until now, Western governments have focused their sanctions on people suspected of serving as Mr. Putin’s proxies, hoping it will increase pressure on him. And most of the new penalties, like those that followed the Russian annexation of Crimea in 2014, continue to be aimed at oligarchs close to Mr. Putin.

These include Kirill Shamalov, his former son-in-law and a major shareholder in a Russian petrochemical firm; Boris Rotenberg, a construction magnate; and Gennady Timchenko, an investor said to be Russia’s sixth-richest person.

The sanctions would make it impossible for those targeted to access assets or conduct financial transactions in the United States, Britain and the European Union, where the penalties were announced this past week. They would essentially freeze in place money and property that could be traced to those on the list, putting cash and securities, or even the sale of real estate, out of reach.

But Russia’s elites, who have lived under Western sanctions for most of the last decade, have long favored complex mazes of corporate ownership to avoid scrutiny. Oftentimes, their wheeling and dealing only surfaces publicly with the leak of files from offshore law firms or secretive banks that cater to those wanting to hide their wealth.

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President Vladimir V. Putin of Russia at the G20 summit in Osaka, Japan, in 2019. He is facing sanctions from the United States and its European allies.Credit...Erin Schaff/The New York Times

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