WSJ: Russian billionaire seeks sanctions relief by donating $1 billion to Ukraine

Russian businessman Mikhail Fridman has proposed to transfer $1 billion from his personal wealth into a Ukrainian bank he co-founded. He is reportedly persuading the UK to lift sanctions against him. Since March 2022, Mr Fridman’s assets have been frozen in the UK. Companies and investors have been severing ties with him to avoid being sanctioned themselves.

As per a report in The Wall Street Journal, the 58-year-old billionaire Mr Fridman’s proposal is among a number of attempts that the blacklisted business executives, banks and companies are quietly making to Western authorities as those nations prosecute a campaign to economically cripple Russia in response to its war in Ukraine, according to US officials.

“The UK does not condone any sanctions avoidance,” the British Foreign Office said.

In March 2022, in the wake of Russia’s invasion of Ukraine, Western allies sanctioned Russian oligarchs and political allies of Russian President Vladimir Putin. Mr Fridman, who owns controlling shares in Alfa Bank, was among those targeted by the European Union and the UK, along with his business partners Petr Aven and German Khan.

None of the men has been reportedly sanctioned by the US, and they insist they have no influence on the government in Moscow or its execution of the war in Ukraine. However, Alfa Bank, which is one of Russia’s largest private financial institutions, is blacklisted by the U.S. Treasury Department.

The war in Ukraine has upset the balance that Mr Fridman, who was born in Soviet-era Ukraine, has maintained skilfully for decades, between his Western and Russian business interests.

As per the report, Alfa Bank-Ukraine has proposed to officials in Kyiv that Mr Fridman be permitted to transfer $1 billion of his personal wealth into the bank, said Roman Shpek, the financial institution’s supervisory board chairman. That money would be used to finance critical projects in Ukraine related to infrastructure, healthcare, and food and energy security, he said.

“The bank would like, as one of the biggest private banks in Ukraine, to be an active player in recovering the Ukrainian economy after the war,” said Mr Shpek, a former Ukrainian economy minister.

Mr Shpek also reportedly said that Alfa-Bank Ukraine sent its proposal to the National Bank of Ukraine in June. The transfer needs to be approved by the National Bank of Ukraine, which oversees the financial sector.

“For us, it’s a really important economic project, and we would like to avoid any speculation that Fridman and his partners would like to invest $1 billion to Ukraine to receive something in another country,” Mr Shpek said. “I don’t see this as some speculation or game that in the future can help to avoid or lift sanctions. It’s a completely different issue.”