Western allies are toying with the idea of letting Russian oligarchs buy their way out of sanctions and using that money to help put Ukraine back together, according to government officials familiar with the matter.
Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland proposed the idea at a G-7 finance ministers' meeting in Germany last week.
Freeland raised the issue after oligarchs spoke to her about it, one official said. The Canadian minister knows some Russian oligarchs from her time as a journalist in Moscow.
The official said the Ukrainians were aware of the discussions and have not rejected the idea since the country needs additional liquidity. The official said it's also in the West’s interests to have prominent oligarchs dissociate themselves with Russian President Vladimir Putin while at the same time providing funding for Ukraine.
The officials spoke on condition of anonymity as they were not authorized to speak publicly about internal G-7 discussions.
The proposal was raised in the context of providing additional money to Ukraine and how the frozen funds and assets of oligarchs could be a source of funds.
At this point, it is just an idea, the official said, but Western allies have expressed interest. European Union officials have talked about the need to look at different and new avenues of confiscating assets and providing money to Ukraine.
Western countries have imposed a raft of sanctions on oligarchs in response to Russia’s invasion of Ukraine. Many of their multibillion-dollar fortunes are intertwined with the West, from investments in Silicon Valley startups to British Premier League soccer teams.
Former Chelsea owner Roman Abramovich, who was sanctioned over his links to Putin has said that net proceeds from the sale of the soccer team would be donated to victims of the war in Ukraine. A deal to sell the football club has dragged out as the British government makes sure that Abramovich does not profit from the enforced sale of the club.
The British government this week approved the sale to a consortium fronted by a part-owner of the Los Angeles Dodgers. Chelsea has been operating under a government license that expires on May 31 since Abramovich’s assets were frozen in March.
A 2017 study of Russian oligarchs published by the U.S.-based National Economic Bureau estimated that as much as $800 billion is held by wealthy Russians in the United Kingdom, Switzerland and other offshore banking centers.
That vast fortune, held by a few hundred ultra-rich individuals, is roughly equal to the wealth of the rest of Russia's 144 million people.
Some oligarchs have also obtained dual citizenship in Britain and other Western countries.
The family fortunes of many of Russia’s billionaires date back to the 1990s, the turbulent decade after the fall of the Soviet Union. Under the notoriously corrupt presidency of Boris Yeltsin, state-controlled assets such as oil refineries, steel mills, aluminum smelters and tractor factories were gobbled up by the politically influential, often purchased with the aid of government-backed loans.
Freeland, Canada's finance minister, is of Ukrainian heritage and wrote a book about it.