UK imposes sanctions on Russian oligarch Vladimir Potanin

The UK has imposed sanctions on Vladimir Potanin, one of Russia’s richest oligarchs, along with several other individuals close to President Vladimir Putin’s inner circle.

The Foreign, Commonwealth and Development Office announced on Wednesday that Potanin, owner of the Interros conglomerate and with an estimated net worth of £13bn, would face an asset freeze, travel ban, transport sanctions and a block on technical advice relating to aircraft.

Potanin is the chief executive and main shareholder of Siberian mining company Norilsk Nickel, which dominates the world’s supply of nickel and palladium.

The company’s central role in global metals production meant Potanin had been one of the few Russian oligarchs not targeted for sanctions by western countries except Canada.

Norilsk is a crucial supplier to the automotive industry, supplying nickel for electric vehicle batteries, as well as palladium for the catalytic converters that limit harmful emissions in petrol-fuelled cars. Europe’s stainless steel industry is also a big buyer of its nickel.

After the sanctions were announced, the price of nickel rose as much as 9.2 per cent to $25,295 a tonne on the London Metal Exchange before paring gains, while palladium climbed more than 7 per cent to above $2,000 an ounce. It later fell back to $1,974, still up 5 per cent.

Rhona O’Connell, analyst at StoneX, said it was not clear whether the sanctions imposed on Potanin, who owns 36 per cent of Norilsk, would extend to the company but “under common practice, it usually does”.

“UK auto production is 1.1 per cent of the global total,” she added. “So disruption would be more a question of logistics than market disarray.”

However, the UK is the base of the LME, the world’s leading venue for trading of industrial metals such as nickel. The exchange said it was looking at what the sanctions on Potanin would mean for its market and participants.

Speaking at a conference on Wednesday, a senior Norilsk executive said the company was not under sanctions but its lawyers were studying the impact of “personal sanctions on our president and major shareholder”.

Shares in Norilsk fell 3.3 per cent in Moscow on Wednesday.

While rival oligarchs’ empires have crumbled under sanctions, Potanin’s eye for a bargain and fealty to the Kremlin have enabled him to snap up banking assets from owners fleeing Russia at knockdown prices.

He recently acquired Société Générale subsidiary Rosbank after the French group left the country, then purchased Oleg Tinkov’s stake in online bank Tinkoff after the founder said he had come under Kremlin pressure for criticising Putin and the war in Ukraine.

The UK government said: “Potanin is obtaining a benefit from or supporting the government of Russia by owning or controlling Rosbank” because financial services are a “sector of strategic significance”.

The US and EU have yet to sanction Potanin, who spent much of his time in France before this year and has been fighting a huge divorce claim in England.

US officials are wary of repeating mistakes such as when they imposed sanctions on aluminium magnate Oleg Deripaska in 2018, which sparked turmoil in global metals markets.

The chaos forced the US into an embarrassing climbdown. Sanctions against Deripaska’s companies Rusal and En+, which own the second-largest stake in Norilsk, were removed in exchange for the oligarch surrendering control.

The UK has also imposed sanctions on Anna Tsivileva, president of the Russian coal mining company JSC Kolmar Group, who is Putin’s first cousin once removed. Tsivileva took over the company, which has operations in Siberia’s coal-rich Kemerovo region, where her husband Sergei Tsivilev became governor in 2018.

Other names added to the UK’s sanctions list included several less prominent figures and companies in sectors including financial services, technology, oil pipeline construction and transport.

The UK government said the latest measures “show that nothing and no one is off the table, including Putin’s inner circle”. The UK has placed more than 1,000 individuals and 120 businesses under sanctions since Russia’s invasion of Ukraine.