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Russia's World Cup Is a Windfall in Spite of US Sanctions

June 08,2018 13:40

The World Cup is expected to draw millions of fans to matches over the course of the 2018 tournament. To get ready, Russia has spent more than $11 billion on infrastructure, including money that went toward construction, renovation and preparations at ...



By Andre Tartar, Sam Dodge and Jeremy Scott Diamond
June 8, 2018

The World Cup is expected to draw millions of fans to matches over the course of the 2018 tournament. To get ready, Russia has spent more than $11 billion on infrastructure, including money that went toward construction, renovation and preparations at 12 stadiums and 13 major airports.
Among those 25 critical facilities, at least 12 are tied to people or companies who are now under U.S. sanctions. Such infrastructure improvements are often key to successful tournament bids, and long outlive any short-term spending and tourism boost tied to the games themselves.
Fans and teams won’t be violating any sanctions by coming to the championship, but the map below shows how inextricably linked the now-sanctioned entities have been to the production of this World Cup.

When Soccer Meets Sanctions ?

Facility

Airport

Stadium

Connection
■ Under most stringent sanctions
■ Subject to sectoral sanctions
■ On the “Kremlin List”

RUSSIA

Nizhny Novgorod
..............

Saint Petersburg
..............

Yekaterinburg
..............

Kazan
..............

Kaliningrad
..............

Moscow
..............
..............
..............
.......

Saransk
..............

Samara
..............

Rostov-on-Don
..............

Volgograd
..............

Sochi
..............

Facility

Connection

Under most stringent sanctions

Airport

Subject to sectoral sanctions

Stadium

On the “Kremlin List”

Saint Petersburg
.............

Yekaterinburg
.............

Nizhny Novgorod
.............

Kazan
.............

Kaliningrad
.............

Moscow
.............
.............
.............
........

Saransk
.............

Samara
.............

Volgograd
.............

Rostov-on-Don
.............

Sochi
.............

Facility

Connection

Airport

Under most stringent sanctions

Stadium

Subject to sectoral sanctions

On the “Kremlin List”

Saint Petersburg
.............

Yekaterinburg
.............

Nizhny Novgorod
.............

Kazan
.............

Moscow
.............
.............
.............
.............

Kaliningrad
.............

Saransk
.............

Samara
.............

Volgograd
.............

Rostov-on-Don
.............

Sochi
.............

Facility

Airport

Stadium

Connection
■ Under most stringent sanctions
■ Subject to sectoral sanctions
■ On the “Kremlin List”

RUSSIA

Nizhny Novgorod
..............

Saint Petersburg
..............

Kazan
..............

Yekaterinburg
..............

Kaliningrad
..............

Moscow
..............
..............
..............
.......

Saransk

Samara
..............

Rostov-on-Don
..............

Volgograd
..............

Sochi
..............

Most stringent sanctions refers to individuals or companies included on the U.S. Treasury Office of Foreign Asset Control’s SDN list. The “Kremlin List” refers to the group of heads of government-run companies and oligarchs identified in January 2018 as potential targets for sanctions.

Thirteen Russian individuals and firms with World Cup ties have been included on the U.S. Treasury’s Specially Designated Nationals and Blocked Persons List (normally abbreviated as SDN) over the past four years, related to Russia’s military intervention in Ukraine or its alleged meddling in the U.S. presidential election. Under the sanctions, their assets are blocked and U.S.-based parties generally can’t do business with them. The most notable are Russia’s sixth-richest man, Viktor Vekselberg, who controls airports in four World Cup-match cities through his Renova group plus Gennady Timchenko, the country’s 11th-richest man, who owns a contractor that helped build the Nizhny Novgorod and Volgograd stadiums. Moscow’s Sheremetyevo and Vnukovo airports and Spartak Stadium are also linked to SDN-listed persons and entities.
Of the companies tagged with more limited Ukraine-related sectoral sanctions, the most prominent is state-run Gazprom, the world’s biggest natural-gas exporter and the only Russian World Cup FIFA partner. The Saint Petersburg Stadium was transferred to the FC Zenit soccer team, backed by Gazprom, as part of a concession agreement.
Lastly, there are the eight powerful Russian oligarchs who, while not sanctioned to date, were included on a list that the U.S. Treasury released in January 2018 of potential targets for restrictions under a 2017 law. (Reporting later revealed that much of this list had been lifted from the Forbes magazine’s rich list.) One particularly eye-catching name was developer Aras Agalarov, whose Crocus Group helped build two World Cup stadiums and who in 2013 hosted Donald Trump and his Miss Universe pageant in Moscow.

Source: Data compiled by Bloomberg
Editors: Torrey Clark, Janet Paskin and Gregory White
Assists: Alexander Sazonov, Elena Mazneva, Jake Rudnitsky and Yuliya Fedorinova

World Cup,FIFA,Russia,Sanctions,U.S.,United States,Kremlin,Putin,Oligarchs,Stadium,Airport

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