Trade

Putin ‘crony’ evades Obama sanctions with quick sell-off

by Erik Wasson - 03/20/14 4:04 PM ET

One of the wealthy Russian businessmen targeted by President Obama for sanctions appears to have outmaneuvered the White House.

Gennady Timchenko, whom the United States has designated as a “crony” of Russian President Vladimir Putin, sold all of his shares in the commodity trading firm Gunvor to his business partner the day before Obama announced sanctions against him.

{mosads}”Anticipating potential economic sanctions so to ensure with certainty the continued and uninterrupted operations of Gunvor Group Ltd’s activities, the shares of the company held by Mr. Gennady Timchenko were sold on March 19 from his personal holding vehicle to Mr. Torbjorn Törnqvist personally,” a statement on Gunvor’s website reads.

“As a result, Mr. Törnqvist has become the majority owner of Gunvor Group Ltd, with an 87 percent stake, and Mr. Timchenko has fully divested his entire holdings in the company. The remaining 13 percent of shares are held by senior employees of Gunvor. There are no outside shareholders,” the statement says.

Given the international oil trading business, Timchenko’s firm is highly exposed to trades in the dollar and interactions with the U.S. financial system, making it vulnerable to sanctions.

Obama announced sanctions on 19 other Russians and Bank Rossiya on Thursday, as well as an executive order that would allow wider sanctions on entire sectors of the Russian economy if Putin takes more aggressive steps, like invading more of Ukraine.

Andrew Kuchins of the Center for Strategic and International Studies said the Obama administration should have moved quicker on sanctioning Timchenko and other Putin allies.

“This is the list the administration should have announced on Monday. Waiting four more days only gave the real ‘cronies’ the opportunity to move any assets they might still have had in the USA, which is unlikely they did have anyway. So certainly this move was expected by Putin and Co; the only surprise is that it came so late,” he told The Hill.

Tags Crimea Economic sanctions Gennady Timchenko Russia Ukraine Vladimir Putin