About forty billionaires and big industrialists are waiting nervously in one of the halls of the Kremlin. White as a sheet, puzzled, they don't dare to touch the sausage rolls or meat pasties that have been offered to them as a snack. At dawn, on that same 24 February, the Russian army entered Ukraine to "denazify" and "demilitarise" its Slavic neighbour. In the evening, Vladimir Putin summoned them for a meeting behind closed doors, which had been scheduled for several weeks.

They take a seat in the majestic Ekaterina marble room. About fifteen metres from them, the Russian president, at his large white table, is staring at them. The Kommersant daily paper, which reports the event, remarks that he is the only one who does not look tired. A few days earlier it was in this setting that he had received President Macron and then led, with a very firm hand, a televised meeting of the Security Council, which led to the recognition of the independence of the separatist regions of eastern Ukraine. 

Loyalty and sanctions 

This time, almost nothing has been leaked of the meeting. Vladimir Putin opened by arguing that "unfortunately", the meeting was taking place in "unusual circumstances", while the president of the Union of Industrialists and Entrepreneurs explained that "Russian business will have to learn to work in difficult conditions, due to all kinds of constraints". A euphemism, to prepare for the sanctions to come and to ensure the loyalty of the oligarchs, who are the main sponsors of Putin's warmongering regime.  

For sure, the small caste of billionaires has seen it all before. In the 1990s, under the rule of Boris Yeltsin, some of the guests at the Kremlin had already built a fortune in strategic sectors, such as hydrocarbons, metals, fertilisers and banking. They had survived the savage privatisations, alongside the recurrent expropriations and mob hits. The ever-present Vladimir Potanin, main shareholder of the giant Norilsk Nickel (Nornickel) (whose trading subsidiary is based in Zug) was already in the picture, as was Piotr Aven, founder of Alfa Bank, Russia's largest private bank. Both belonged to a small clique called the "seven bankers", who ruled the roost at the Kremlin. In exchange for providing cash to a state on the verge of bankruptcy, they were getting discounted shares in the country's most attractive companies.  

They also led the operation "successor", i.e., finding a replacement for vodka-soaked President Yeltsin. However, once on the throne, Vladimir Putin, the KGB officer believed to be docile, proved more independent and revanchist than expected. Little by little, his message to the oligarchs became clear: stay away from politics and abide by the "power vertical", and make your wealth available to the men in charge, through charitable funds, in order to finance various programmes. In return, the regime was providing access to state contracts and permission to continue with their questionable methods to enrich themselves...  

Warnings to the unwilling 

The oligarchs were forced to witness without flinching the exile in London of oligarch Boris Berezovsky, the expert of palace intrigue, who was found after taking his own life in his bathroom a few years later; then the arrest, in 2003, of oil tycoon Mikhail Khodorkovsky and the dismemberment of his oil empire Yukos, which ended up enriching new oligarchs.  

Indeed, Vladimir Putin's former comrades and associates from St. Petersburg began their own rise. Many of them coming from the security services, lovers of judo and of patriotic views on the superiority of Christian values and the greatness of Russia, they became billionaires in just a few years.  

Among them, Gennady Timchenko is the most emblematic. A former trader in an oil refinery in St. Petersburg, the Russian was completely unknown to the general public when, in the early 2000s, he moved to Cologny, on the shores of Lake Geneva, with his wife and two daughters. The first article written about him appeared in 2003 in L'Hebdo magazine. At the time, no picture of him could be found on the internet. Five years later, his oil trading company Gunvor, based in Geneva, was world-renowned and exported nearly a quarter of Russia's crude oil.  

A world collapses 

The war in Ukraine is undermining this oligarchic system, causing Russia to be among the most unequal countries in the world, as 1% of the population is in control of more than 58.2% (Credit Suisse Global Wealth Report 2021) of the national wealth. Whether veterans from the Yeltsin era, or more recent supporters of the president, they all are now identified as feeding Putin's war effort. "It's almost as if you just have to shake Putin's hand to be caught up", explains an expert of these circles in Geneva. Since the first round of sanctions, they have been constantly extended, affecting entire families: children, wives, sons-in-law, etc. 

After the annexation of Crimea by Russia in 2014, the United States and, to a lesser extent, the European Union (EU), had sanctioned the oligarchs closest to Vladimir Putin. Switzerland, lurking in its neutrality and its tradition of "good offices", had not followed, refusing to attack these billionaires, lovers of alpine landscapes, luxury properties, private schools as well as quality and confidential banking services.  

However, this culpable wait-and-see attitude has been shattered when rockets started to hit the Ukrainian population. On 28 February, the Federal Council announced the application of all EU sanctions, targeting to date (29 March 2022) 62 legal entities and more than 874 individuals, including Vladimir Putin, his ministers, almost all the Duma deputies, pro-Russian officials from the separatist regions of Donetsk and Luhansk as well as a list of wealthy businessmen.  

The Eldorado of oligarchs 

The decision of the Federal Council was widely welcomed at the international level. In Switzerland, Christoph Blocher, the bedrock of the Swiss People's Party, once again showed off all his subtlety: "Switzerland is at war!". 

However, beyond this political posturing in the name of Swiss neutrality, the tragedy taking place in Europe today highlights another war that Switzerland does not truly intend to wage: the fight against white-collar criminality. Along with London, for three decades now Switzerland has been serving as a haven to several generations of oligarchs close to the Kremlin, who were able to take advantage of legal loopholes favouring dubious practices. For the squadrons of lawyers, bankers, tax consultants, real estate agents, jewellers, watchmakers and notaries who were at the service of these billionaires, a world is about to collapse.  

According to estimates by the Swiss Bankers Association (SBA), Swiss banks hold between 150 and 200 billion francs of Russian assets. Indeed, this is this is a more credible figure than the 10.4 billion dollars suggested in 2020 by the Swiss National Bank (SNB). "Rich oligarchs often have dual nationality. Only considering Russian-denominated assets means that only a small part of their fortune can be targeted", explains a Russian lawyer based in Geneva. On Thursday, 24 March, the SECO announced that it had frozen 5.75 billion francs of Russian assets, including real estate.  

A web of technicalities 

The tracing is difficult. For this reason, the United States and the EU have set up a special investigation task force. Indeed, wealthy Russians use several tricks to hide their assets: nominees, complex structures via shell companies registered in tax havens, trusts and foundations. These techniques, sold ready-made by Swiss lawyers, no doubt will allow some to avoid sanctions.  

Even more so as the smoke and mirrors continue. Several targeted billionaires claim that they have given up their stakes. Andrey Melnichenko, a St. Moritz resident for several years, says he no longer holds shares in coal giant SUEK and fertiliser manufacturer Eurochem. No information on the new owners is available for now. Somehow, it's like going back to the 1990s when the savage privatisations happened and it was difficult, if not impossible, to know who the owners of the largest companies in the country were.  

Three weeks after Putin's disciplinary meeting with his oligarchs, a wind of solidarity was blowing on Bern's federal square on 19 March, when Volodymyr Zelensky spoke to the Swiss people via live video link. Switzerland, an example of direct democracy, is a model for Ukraine.

However, it is also a refuge for "the money of all those who started this war", denounced, rightly, the Ukrainian president.

Putin's oligarchs are the most striking example of an economic model based on granting privileges to extremely wealthy individuals from countries where corruption is endemic. But in the face of this war, it is high time that reforms come to Switzerland.