Crimea crisis: US sanction list is who's who of Vladimir Putin's inner circle

http://www.theguardian.com/world/2014/mar/20/us-sanction-list-vladimir-putin-inner-circle

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Old KGB acquaintances, childhood judo sparring partners and friends from his former dacha compound. The new US sanctions list hits people that are the closest to Putin, and raises the stakes exponentially in the row over Russia's annexation of Crimea.

The previous US sanctions list, announced earlier this week, was intriguing but not exactly hard-hitting. It featured figures like Vladislav Surkov, an important Kremlin ideologue, and Elena Mizulina, a fringe ultra-conservative MP who was a major cheerleader for the law against "gay propaganda". It notably avoided anyone considered to be close to Putin.

The new list reads like a who's who of Putin's inner circle. Save for the notable absence of the heads of Gazprom and Rosneft, Alexei Miller and Igor Sechin, some of Putin's most trusted courtiers are blacklisted. Sergei Ivanov, Putin's hawkish chief of staff sits alongside more shadowy figures such as the Rotenberg brothers and Gennady Timchenko, who have known Putin for decades.

They are as close to "friends" as Putin has – they go back years and still play regular ice hockey games together. Given Timchenko's long-standing ties to Putin, and the extraordinary rise of Gunvor from obscurity to one of the world's leading oil trading companies, the company has long been subject to rumours of Putin's involvement as a beneficial owner.

Nobody has ever been able to prove this, however, and Gunvor has always denied it, which makes the US Treasury statement on the sanctions remarkably forthright. It reads: "Timchenko's activities in the energy sector have been directly linked to Putin. Putin has investments in Gunvor and may have access to Gunvor funds."

Putin's leading critic, Alexei Navalny, the anti-corruption campaigner who is currently under house arrest, wrote a remarkably prescient column in the New York Times that called for sanctions against Putin's money men, mentioning by name many of the figures that featured on the new expanded US list.

Michael McFaul, who was US ambassador to Russia until last month, said: "This is not just an episodic glitch in US-Russian relations, this is a profound turning point. I don't see any support for what Russia is doing now and it is going to be this way for a long time." After the announcement of the US sanctions, a message on Navalny's Twitter account read: "So there are no illusions, for this happiness about the introduction of sanctions against thieves, some of us will have to pay. I better get a bag ready for jail."

Indeed many feel that the effects of the sanctions could be felt as strongly inside Russia as outside. Some with knowledge of the Kremlin said that such strong measures were misguided and likely to backfire.

"The solution is not sanctions but intensified communication to avoid worsening of the crisis. Sanctions will only worsen it," said Gleb Pavlovsky, a spin doctor who formerly advised the Kremlin. "They will have no positive influence on Russian policy; instead they will be used in Russian propaganda, and be used for another reason of attack on liberal opposition."

Timchenko and Arkady Rotenberg saw US sanctions as "recognition of their service to the Russian state," an associate told Interfax on Thursday night, but such bluster is likely to mask great concern over the potential implications, especially if US bans are backed up by similar measures from the EU.

Fyodor Lukyanov, a top Russian foreign policy analyst, said that the sanctions were symbolic but important: "Of course these are very significant figures that belong to a small group that's pretty close to Putin. I don't think they have assets in the US, a year and a half ago Putin started to say that officials should return assets, these people in the inner circle probably listened to him. They probably anticipated such a development in this conflict. So there won't be any direct harm to them. But it's a huge gesture showing that the US administration is resolute on this and prepared to take things further."

The question now is what exactly the Kremlin can do to retaliate. Putin's spokesman Dmitry Peskov told RIA Novosti that Russia viewed the US sanctions with "bewilderment" and said that the US would "not have to wait long" for a retaliatory response.

This followed quickly, with a list of US politicians banned from entrance into Russia.

But the reciprocal sanctions that Moscow can issue against the likes of John McCain look weak at best. One senator on the list, Dan Coats, tweeted: "I am disappointed that I won't be able to go on vacation with my family in Siberia this summer," underscoring the discrepancy between banning Russian officials from the west, where many have property and family ties, and the reciprocal measure.

Lukyanov said that Russian sanctions against US officials are "totally symbolic" as the US officials will not suffer at all from such sanctions, but that the "real response" is likely to be something different.

"Everything is possible. It will probably not be connected with people but with concrete economic interests. Some large American corporation could find its interests in Russia under threat."