russia-sanctions-putin-ovechkin

[Editor's note: We're not writing about this topic to invite a debate on Barack Obama's presidency or the politics of Crimea. This article is about hockey. Kind of. It's also about Miley Cyrus.]

In March, Vladimir Putin sent troops into the Crimea. His stated motive was to protect the mostly Russian population there from unrest. A few days later, the Crimean parliament declared independence from Ukraine and asked to join the Russian Federation. Putin then claimed Crimea as part of Russia on moral and material grounds, citing the principle of self-determination and Crimea’s strategic importance for Russia or some ish like that.

Lots of world leaders were pretty pissed about this, judging by the non-binding UN resolution (100 of 193 in favor) that declared Crimea’s Moscow-backed referendum invalid a few days later. Then the United States decided to show just how pissed they were by sanctioning Vladimir Putin and all his boyz.

Those of us who watch the news every night and consider ourselves informed knew all of this already. What we didn’t know is who exactly got sanctioned, why they got sanctioned, and why those sanctions matter to us. Thanks to Jennifer M. Smith (whom we had the pleasure of meeting at RMNB Party 6) and her co-workers at the Stewart & Stewart law firm, we have learned that some of the people sanctioned are deeply involved in the Russian hockey league, the KHL. Russian billionaire Arkady Rotenberg, president of Alex Ovechkin’s former KHL team Dynamo Moscow, has been sanctioned by the United States for being Putin’s former judo partner and a member of his inner circle.

You can’t make this stuff up.

Gennady Timchenko, chairman of the board for the Kontinental Hockey League (KHL) and president of Ilya Kovalchuk’s SKA St. Petersburg, has also been sanctioned, as well as Arkady Rotenberg’s brother, Boris, president of Dynamo’s soccer team. Timchenko and the Rotenberg brothers also own a joint stake in the Finnish hockey team Jokerit, which is slated to join the KHL in the 2014-15 season.

The sanctions prohibit anyone from the United States from engaging in any transactions with people on that list. The economic sanctions also block any transactions with their property, including the entities they own.

Jennifer explains the sanctions further:

The U.S. sanctions freeze assets of Timchenko and the Rotenbergs, block their property and property interests, and ban them from travelling to the United States. Under U.S. law, the sanctions also automatically block the property and property interests of any entity in which a blocked person such as Timchenko and the Rotenbergs owns, directly or indirectly, a 50% or more interest.

This means that any person in the United States and all U.S. citizens, permanent residents, and entities (including foreign branches) are prohibited from engaging in any transactions with Timchenko, the Rotenbergs, and any organization in which they have a 50% or more ownership interest.

Canada has also blocked Timchenko and his property, but not the Rotenbergs.

The question becomes: do any of the three billionaires named in the sanctions own 50% or more of their KHL teams?

Fedor did some research. The majority of Jokerit’s stock is owned by Finnish businessman Hjallis Harkimo. At SKA, though Timchenko is acting president, the organization is majority owned by gas giant Gazprom, which is in possession of the Russian Federation. The only club that seems to be in danger of doing business with the United States or its people is Dynamo Moscow. There’s not much information on who or which entities own the club legally, but it’s most likely Arkady Rotenberg who owns over the majority of the team’s stock.

Washington Capitals captain Alex Ovechkin was named advisor to Dynamo Moscow in 2010. It was a paid position.

“Because Alex is on our staff, he has to earn a salary,” former Dynamo president Mikhail Tyurkin was translated as saying by Yahoo’s Dmitry Chesnokov back then. “Although in order to earn it, it is enough for him just to say three words.”

We do not know if Ovechkin is still employed or paid by Dynamo.

Regardless of a hockey player’s nationality, any permanent resident of the U.S. (i.e. anyone with a “green card”) is treated as a “U.S. person” who must comply with U.S. economic sanctions. That would seem to indicate that Ovechkin must be careful in his dealings with Dynamo now and until the sanctions are lifted.

Jennifer explains the punishment:

The U.S. Government takes violations of the sanctions laws very seriously — a single violation can result in up to 20 years in prison, criminal fines of up to $1 million, and civil penalties of up to $250,000 or twice the amount of the relevant transaction.

According to Reuters, professional twerker/part-time terrible musical artist Miley Cyrus and Justin Timberlake have been the first Americans to test the sanctions. They’ve been given the green light to perform concerts in venues owned by sanctioned people this summer.

More from Reuters:

American pop stars Miley Cyrus and Justin Timberlake can go ahead with shows in Finland despite U.S. sanctions against the Helsinki venue’s Russian owners, the concerts’ promoter said on Monday.

The concerts were at risk last week as the Hartwall Arena venue is owned by Gennady Timchenko and Boris and Arkady Rotenberg, all of whom feature in a list of visa bans and asset freezes imposed by the United States following Russia’s annexation of the Crimean peninsula from Ukraine.

The concert promoter said U.S. officials had indicated at the weekend that the sanctions would not prevent the concerts going ahead.

“The sanctions will not have an impact on Hartwall Arena nor our business there,” Nina Castren, the chief executive of Live Nation Finland, told Reuters.

This is really complicated.

Any North American player who wishes to play in the KHL next season should get educated on the sanctions and whom they affect. And they should be careful. Considering the rulings for Miley Cyrus and Justin Timberlake, these sanctions seem mostly toothless when involving entertainers. And while we have no idea what Alex Ovechkin’s role with Dynamo is right now, he should be careful too.

Additional reporting by Fedor Fedin.

  • Owen Johnson

    Is it bad that my first thought with all of this Crimea shit was “OMG! Are we going to be able to keep Ovi?”

  • JH

    You were not alone in that thought.

  • Igor Kleyner

    Toothless sanctions, feckless foreign policy, and a well-meaning but hopelessly naive populace “who watch the news every night and consider ourselves informed”. There, I summarized it all for you in less than 140 characters!

  • HooHah

    Ovie could still bolt the KHL and play with Kovalchuk, as long as it’s not owned by anyone under the U.S. governments radar (I’m guessing). Then the Caps could get some players who actually give a damn.

  • http://www.russianmachineneverbreaks.com Ian Oland

    I’m surprised Slava isn’t here arguing yet.

  • Owen Johnson

    Trolling troller is trolling.
    https://www.youtube.com/watch?v=1Hf0DXE8SdE

  • yv

    And how about playing for team Russia at the upcoming World Championship in Grabovski’s Minsk, Belorussia. The whole Dynamo Moscow management is now steering Team Russia, including GM Safronov. And they are very much want to invite Ovi-Kuzya and possibly Orlov, who all would be available within a week. I don’t think these sanctions related to national teams but no harm in checking..

  • Igor Kleyner

    I’m surprised you consider yourself informed!

  • Eric Schulz

    Ovie would first have to play in the KHL in order to bolt the KHL.

  • Dominic Kreiner

    Seems Harsh

  • Igor Kleyner

    Nah! You should see the insults we throw at each other behind the mighty curtain of privacy of Facebook Messenger!

  • http://www.russianmachineneverbreaks.com Ian Oland

    Yes. Note to self: never say anything incriminating to Igor in a private chat because he WILL screenshot it and post it on Twitter.

  • Dominic Kreiner

    LOL careful, or the NSA is gonna have to read an interesting collection of euphemisms at the security hearings

  • Igor Kleyner

    Next thing I know my badge no longer works at the gate!

  • bdf

    I’m confused by this because you seem to assume that Ovi has a green card. Is that based upon anything or just a complete assumption of yours? Otherwise it seems likely that he is here on an athlete’s visa and doesn’t qualify as a US person.

  • Lawrence

    Hopefully this all just blows over and nothing becomes of it for Ovi or anyone else.

    Good job detectives, RMNB.

  • http://www.russianmachineneverbreaks.com Ian Oland

    “would seem” “this is really complicated” “we do not know” “no idea”

    I’m just quoting from my own story here. I thought I was pretty careful with my wording here and made no assumptions based off anything. I do not know Ovechkin’s situation in that regard nor will I pretend to because it is all private. All I know is that he owns a house and has a permanent residence here. I’m pretty sure he would be eligible for a green card and I’m pretty sure it would be silly for him not to have one, right Igor?

  • http://www.russianmachineneverbreaks.com Ian Oland

    I look good with a cane! Damn.

  • Igor Kleyner

    Yes, he is definitely eligible for green card. No, we have no clue if he ever got it or even applied. Yes, life in the US is easier if you have one – even if you are a millionaire many times over.

  • Fedor

    National teams aren’t owned by people.

  • Daniel Walker

    I always envisioned Ovie bowing out for Russia in a Kovalchukesque manor sometime near the end of his prime. So many league pundits (Milbury, Cherry, Roenick, etc.) already seem to have an anti-Ovie, anti-Russian agenda and international tensions will most likely only increase the sentiment. At some point (especially if his production declines as he ages) he will probably get sick of the ever increasing criticism of his game and his country and head home. It might be a blessing in disguise though. I foresee a not so distant future where that huge contract attached to an ageing Ovie becomes a bit burdensome.

  • yv

    That’s not entirely true. Many national coaches and teams are sponsored by individuals. Like Abramovich, who could also be under the possible sanctions in UK, has paid salary of the national soccer team coach quite recently.

  • Fedor

    Yeah, not directly though, through a foundation called “National Academy of Football”, managed by Sergei Kapkov who then went on to work in Moscow City government.

  • Jennifer Smith

    Jennifer here. It’s likely he has an athlete’s visa, but as long as he is actually physically IN the United States, he would also be considered a U.S. person. (But note is for informational purposes only, and not to be construed as legal advice.)

  • Fedor

    And anyway, more importantly, the talk here is about the stake in a company. National teams don’t have stocks that can be bought or sold, therefore they’re not business entities that can be owned by people (they’re not business entities at all) and aren’t subject to these sanctions..