SuperMatt
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All those “Panama Papers” that were greeted with a shrug by Congress gave us a hint of who sanctions really hurt. Putin and the other billionaires in the world have illicitly moved money to safe havens all over the globe.Putin counted on the west's uncertainty if he crossed the line. So, he crossed it.
And, no one really knows what we should do next. Putin counts on that too.
Both situations are temporary, but the damage is done already. We just sat around and watched a country in Europe partition another one, even as the UN Security Council was meeting to confirm its impotence.
China is being a little more cautious this time about what it says about Russia v Ukrainian turf, but it will print money for Vladimir for awhile the same as China did after Crimea annexation, until ways around the sanctions are found, like they were before. They have a lot of business together now anyway with their pipelines under construction.
Anyway every time we see the tip of some iceberg regarding laundered money or questionable tax havens, it's good to remember we've only seen the tip of an iceberg. All those not-really-regular banks around the globe in places like Kazakhstan and elsewhere in Central Asia and the Middle East are also just tips of icebergs.
Do we imagine those who have been sanctioned for years now have just sighed and said wow we can hardly even buy a loaf of bread these days... What do we think they were doing while sanctions were being debated, sitting around waiting for them to hit?
Make no mistake, money talks last and sometimes at lightning speed before sanctions do hit. And there's always the high dollar version of hawala when it comes to implementation. What's a few hundred million or a couple billion in a network of friends when a large asset transfer is desired without visibly "moving money". It's not different from the far more ordinary amounts and users of hawala around the world. Maybe it would take more trust to move a couple billion that way, but then anyone with a huge amount of dough to move has access to ways to ensure that trust is the better part of misplaced valor in thievery.
The whole thing about the EU being wary of banning Russia from using the Swift exchange, what do we think that wariness is about anyway? Banning any country from using regular wire transfer would get in the way of some big (if ordinary) and not necessarily very public conduct of "business as usual". All those rules for banks about knowing your customers don't preclude banks from deciding yeah I know this guy and I know how to have his back while protecting my own a^^ as well. Meanwhile the money flows in plain view so to speak over Swift because there's always some low man on the totem pole to take the hit if fraud or money laundering or sanctions violations are later discovered.
It's a mess. It was always going to be a mess. I was hoping Putin would die peacefully in bed sometime after a big dinner and a few glasses of whatever, with his big dreams for lost empire still unrealized.
The hope for sanctions will have to be that they cause enough pain to either the general public in Russia or the businessmen who didn’t have enough hidden away to recover. Then they will be able to put pressure on Putin. As for him, he’s set for life regardless of any sanctions.