EU struggles to ‘freeze and seize’ the wealth of Russia’s oligarchs

Every week since war broke out on Feb. 24, the EU has introduced new sanctions on Russia, adding nearly 700 top politicians, businessmen and military staff to its blacklist.

Oligarchs’ wealth remains largely untouched in the European Union, weeks after Brussels approved measures to freeze the assets of dozens of billionaires and top officials linked to Russia following its invasion of Ukraine.

Every week since war broke out on Feb. 24, the EU has introduced new sanctions on Russia, adding nearly 700 top politicians, businessmen and military staff to its blacklist – including 42 super rich “oligarchs” such as Chelsea soccer club owner Roman Abramovich and banking tycoon Mikhail Fridman.

Listed individuals are meant to have their bank accounts and assets frozen, but so far only a small fraction of their funds have been affected amid legal constraints and enforcement challenges, according to EU officials and government data from a dozen EU countries.

Germany, the EU’s largest economy, has declined to give details of any assets frozen so far. It set up a taskforce last week to enforce sanctions, and the economy ministry told Reuters it expected to report progress in one to two weeks.

Austria and Ireland also declined to specify whether they had frozen any assets, as did Cyprus and Malta, which in recent years have both issued “golden passports” to wealthy individuals, including Russians.

Some countries that have reported freezing assets say they have only hit a small part of the wealth subject to sanctions.

The Dutch finance ministry, for example, said it had frozen about 390 million euros ($428 million) in transactions and financial deposits. That is only about 1% of the wealth of sanctioned individuals in bank accounts, trusts and other financial vehicles in the Netherlands and in offshore centers linked to the country, according to government estimates.

Italy, one of EU’s most active countries in seizing physical assets, having taken yachts and villas worth about 800 million euros so far, has yet to hit oligarchs’ liquid wealth because much of it is believed to be stored in the bank accounts of third parties or in trusts with no clear beneficial owner, said the head of the Italian tax police Giuseppe Zafarana.