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Alexandra Wrage is the founder and president of TRACE, an anti-bribery business association. Peter Klein is founder and executive director of the Global Reporting Centre.

Without a single foreign soldier on their soil, Russians are under fire – lining up for cash at ATMs, seeing the ruble massively devalued, and watching powerlessly as the fragile Russian stock market refuses to open for fear of collapse. American President Joe Biden opened his State of the Union address this week pledging sanctions targeting Russia’s kleptocratic ruling class, saying the U.S. will “seize your yachts, your luxury apartments, your private jets. We are coming for your ill-begotten gains.” In Vladimir Putin’s war of bullets and bluster, it is money, not missiles, that may prove to be his undoing.

Part of Mr. Putin’s motivation for this war, formed in “consultation” with yes-men seated at the far end of absurdly long tables, was to hold off anti-corruption and pro-transparency efforts that have taken hold in the West and are creeping eastward. Days before invading, Mr. Putin gave a rambling hour-long speech to justify his war, railing against the Ukrainian High Anti-Corruption Court, the National Agency on Corruption Prevention, and NGOs that sought to clean up Ukraine’s state-owned enterprises.

Here in Monaco, where we have been filming a documentary about global corruption, the impact of the Russian kleptocracy is palpable. Menus are offered in Russian for the wealthy who vacation here, and those who establish businesses in the haven to hide their wealth. The recent Pandora Papers exposé revealed that Mr. Putin’s alleged mistress mysteriously bought a multimillion dollar home in the Mediterranean principality, and used a Monaco financial services firm that also worked for one of Mr. Putin’s billionaire friends. Our driver said he fears the new sanctions against Russia will dry up his business, since wealthy Russians are his best clients.

Mr. Putin’s grip on power may look absolute, but he depends on the coterie of thieving billionaires that he allows to dip into the state’s resources. Lose their fealty and he is finished. With the invasion of Ukraine, he may have overplayed his hand.

Putin is increasingly a cornered rat. This could make him even more dangerous

Will Putin’s war threaten his hold on the Kremlin?Will Putin’s war threaten his hold on the Kremlin?

He underestimated the speed and severity of sanctions that a co-ordinated financial system could impose. Even traditionally neutral countries such as Switzerland have joined the European Union, Canada, the United States, Japan, Taiwan and New Zealand in their plans to block Russian banks from the SWIFT international network. Key Russian imports and exports have been halted. Russian assets of Putin allies have been frozen. Airspace has been closed to Russian aircraft worldwide. Travel bans targeting Russian airlines have trapped travellers in the country. Western companies and investors are exiting the Russian economy. Switzerland has taken the unprecedented step of freezing the “secret” bank accounts of Russia’s oligarchs. In direct response to the invasion, the U.K. is introducing legislation to require foreign owners of property to reveal their identity. This step has been promoted by anti-corruption activists for years, but was finally triggered by Mr. Putin’s own folly.

While strongmen such as Mr. Putin have continued amassing wealth by taking advantage of lax corruption enforcement, the ground has quietly been shifting under their feet. New laws in several countries that prohibit anonymous shell companies will constrain the ability of oligarchs to park their wealth overseas. Increased scrutiny of “golden passports,” which allow the wealthy to buy citizenship or visas, will make it harder for Russian billionaires to move their mistresses into London mansions or their children into Swiss boarding schools. Pressure is mounting to rein in bank secrecy. In response to a changing world, Mr. Putin clearly felt cornered.

Only days into the war, Mr. Putin’s billionaires have begun to publicly revolt, one going so far as to predict that the war would be “catastrophic” for Russia. Ordinary citizens are protesting too, risking arrest to speak out against the invasion.

It would be a major error to suggest that Mr. Putin is weak, but he does have a weakness. Mr. Putin needs the support of the Russian oligarchs, and their support depends on access to their cash. Unfortunately for Mr. Putin, most of that cash is parked overseas, deliberately taken out of Russia and invested in places such as London, Paris and New York. Some estimates indicate that 85 per cent of Russia’s national income may be stashed overseas. All the West has to do is scoop up those mansions, seize those overseas bank accounts, and lock down visas and foreign travel by Russia’s elite. Do that, and Mr. Putin will find himself utterly alone at home and abroad.

As Russian forces continue to march through Ukraine, they’ve surrounded the ancient city of Kharkiv, known as the Kharkiv fortress, and prepared for a classic military manoeuvre of the 14th-century: the siege. But times and tactics have changed, and Mr. Putin and his cronies find themselves under economic siege. Huddled behind the isolated walls of their national border and cut off from the previously friendly fields of the global financial system, Russia’s economy will be strangled – a move that may force Mr. Putin to withdraw in a way no bombs ever could.

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