An oligarch is defined in the Oxford English Dictionary as a “very rich business leader with a great deal of political influence”. The word comes from Greek origin, and loosely translates to “the rule of the few”. In Russia, these few ruling elites have long dominated the financial and political spectrum, with enormous wealth often hidden in foreign investments making it harder to trace.
In fact, these oligarchs held so much wealth before sanctioning began, that their combined fortunes eclipsed the Russian economy.
Before oligarchs began facing strict sanctions and frantically sold off assets, billionaire wealth stood at almost 21 percent of Russian GDP, an extraordinarily high figure, and one that shows just how much power these people held.
This number has shrunk since the Ukraine invasion began, but as of March 10, billionaire wealth compared to GDP in Russia was still the highest in the world.
The data, published by Statista, proves how pivotal the wealth of a few key individuals has been in Russian politics in recent years.
According to The Economist, the biggest chunk of this wealth comes from so-called ‘crony-capitalism’, whereby businessmen and politicians work together to share profits and favours.
The crony sector is believed to constitute about 85 percent of all Russian billionaires’ wealth.
The report said: “This money can be exploited and steered by the Kremlin for espionage, terrorism, industrial espionage, bribery, political manipulation, disinformation, and many other nefarious purposes.”
Since the Ukraine crisis began, the US, EU and UK have together sanctioned over 1,000 Russian individuals and businesses who are considered close to the Kremlin.
These include high-profile oligarchs like Chelsea FC owner Roman Abramovich and ex-Arsenal shareholder Alisher Usmanov.
But a lot of the money and assets of these oligarchs is hidden in foreign investments and shrouded in secrecy, making the money – and its ties – hard to trace.
Oligarchs tend to hide their money through shell companies, the Atlantic Council report said, hiring “the best lawyers, auditors, bankers, and lobbyists in the world to develop legal means to conceal and launder their funds”.
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And in the UK, the Government has taken steps to increase its use of Unexplained Wealth Orders (UWOs), which oblige people to prove where they got the cash to buy assets in the UK.
The UK has also scrapped its “golden visa scheme”, which gave residency rights to wealthy foreigners if they invested large amounts of money in the country.
And Malta, a favourite haven for Russian money, has also scrapped its “golden passport” scheme which allowed oligarchs to buy citizenship.
Cyprus and Bulgaria scrapped their golden passport schemes in 2020.