After Russia launched a military invasion of Ukraine, Canada and its allies slapped sanctions on dozens of oligarchs and government officials this week alleged to be close to Russian President Vladimir Putin.
But many associates remain untouched.
For instance, only six individuals on a list of 35 people drawn up by allies of jailed Kremlin critic Alexey Navalny have so far been subject to sanctions by Western countries – in some cases, only by one or two. This list of proposed targets names wealthy Russians, government officials and business leaders who Mr. Navalny’s supporters say should face sanctions to put pressure on Mr. Putin.
No. 1 on the list prepared by Mr. Navalny’s allies is Russian-Israeli billionaire Roman Abramovich, owner of England’s Chelsea soccer club and a significant shareholder in steelmaker Evraz PLC, which through a subsidiary has steel-production facilities in Canada.
Sandra McCardell, a senior official at the department of Global Affairs, confirmed Mr. Abramovich was not hit by sanctions this week.
Mr. Abramovich owns more than 28 per cent of the shares of Evraz, according to the company’s website. Its wholly owned subsidiary Evraz North America operates steel-production sites in the United States and Canada, including locations in Regina and the Alberta cities of Calgary, Camrose and Red Deer.
Evraz North America, a subsidiary of Evraz, supplies 58 per cent of the steel being used to build the $21.4-billion Trans Mountain Expansion Project, which is twinning the 1,150-kilometre Trans Mountain pipeline carrying petroleum to British Columbia from Alberta. The project also includes expanding the Burnaby, B.C.-based Westridge Marine Terminal through which crude oil is shipped abroad.
The federal government did not explain why Mr. Abramovich or Evraz were not targeted. Canada’s allies have not sanctioned him either.
Evraz and other Russian steelmakers, including Severstal have escaped Western sanctions, which mainly hit the Russian financial and banking sectors.
The targets of Canada’s sanctions this week included 27 Russian banks and financial institutions, as well as 31 individuals that the federal government said in a statement are “key members of President Putin’s inner circle,” close contacts or family members of some individuals already sanctioned by Canada.
On Saturday, Mr. Abramovich handed over stewardship of the Chelsea team to the club’s charitable foundation amid calls in Britain that he be sanctioned over Moscow’s invasion of Ukraine.
Last week, British Prime Minister Boris Johnson mistakenly identified Mr. Abramovich as someone who was “already facing sanctions.” The BBC reported a spokesman for the Prime Minster later said Mr. Johnson misspoke.
The billionaire last year sued publishing house HarperCollins over a book that said he bought Chelsea at the direction of Mr. Putin and to raise Russia’s profile and increase its influence. Last December, as part of a settlement, the publisher agreed to amend certain passages relating to the reasons for buying the Chelsea club.
It’s uncertain whether Evraz would be a candidate for sanctions even if Mr. Abramovich were ever subject to sanctions given that Canada or other governments would have to determine Mr. Abramovich controls it even though he holds less than 30 per cent. The United States deems someone as having a controlling interest in a company when they own 50 per cent or more. In 2019, Evraz said publicly that a decision by Mr. Abramovich and his partners to sell some of their shares in the group would reduce the risks of the company itself being subject to sanctions.
Neither Evraz North America nor Evraz immediately responded to requests for comment Friday.
Lawyer John Boscariol, head of McCarthy Tétrault’s trade and investment group, said Canada still has many sanction measures unused in its toolbox. Canada could bar financial institutions from providing any financial services to Russians or enact sectoral bans on dealing with Russian industries such as mining or technology. It could further restrict exports of oil and gas equipment to Russia, which depends heavily on petroleum revenue.
The Toronto lawyer rejected the notion that the list of sanctions, mostly against individuals, was merely “for show.” He said Canada’s decision to cancel all export permits – for restricted technology valued at $700-million – will mean hardship for Canadian companies.
Sanctions prohibit Canadian financial institutions from providing services to targeted individuals, officials or companies and freeze any assets they hold in Canada. When applied in concert with allies, they can hamper efforts by those sanctioned to move funds to safe countries.
Evraz said on Friday it had no plans to delist from the London Stock Exchange despite heightened geopolitical risks after Russia’s invasion of Ukraine.
The company is still considering a secondary listing on the Moscow Exchange and does not rule out that it could take place in 2022, Nikolay Ivanov, the company’s chief financial officer, told reporters.
But Evraz acknowledged the situation over Ukraine created additional uncertainties for the business.
“We are conscious of the current geopolitical circumstances. We continue to monitor the situation and will keep you updated regarding any material developments that can influence our business,” Evraz chief executive Alexey Ivanov said in a statement accompanying the company’s 2021 earnings report.
Several Ukrainian MPs held a virtual phone call with Canadian media Friday, urging Canada to work to cut off Russia from the SWIFT payments system, which supports most international money and security transfers, and block shipments of oil from Russia. The Canadian Association of Petroleum Producers says Canada imports roughly $550-million worth of crude oil a year from Russia.
Ukrainian MPs also urged allies to send defensive weapons and to open its borders to Ukrainian women and children fleeing the violence.
“You have to understand if Ukraine falls then crazy people will move on to Poland and the Baltics and you will not stop it,” MP Yulia Klymenko said.
“Western action is urgently needed because Ukraine has only a few days before Russian overruns the country,” added Maria Ionova, an MP for the Petro Poroshenko Bloc. “Putin has changed the world order like never before.”
With reports from Reuters
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