Billionaire who wants off Canada’s Russia sanctions list denounces Putin

A billionaire trying to get off Canada’s Russia sanctions list denounced Vladimir Putin and the Ukraine war in a private statement to the government, but it didn’t work, Global News has learned.

Igor Makarov, an oil and gas magnate whose assets were frozen by Ottawa in 2022 in response to the invasion of Ukraine, condemned the Russian president to Canada’s foreign affairs department.

The three-page statement, signed in Cyprus, where Makarov holds citizenship, called Putin’s attack on Ukraine “outrageous,” “illegal,” and “designed to undermine the entire world order.”

“I want it to be made clear that I strongly oppose the Russian regime and its invasion of Ukraine,” wrote Makarov, who Canada alleges has benefited from Russia’s “oligarchy system.”

Worth an estimated $2-billion, Makarov noted that he was writing “on a confidential basis.” The statement was part of an attempt to convince Canada to drop the sanctions he said had caused him “substantial financial harm.”

But a copy of his remarks was obtained by Global News from the Federal Court, where his lawyers filed it. They asked a judge to seal the key parts of it, arguing that challenging Putin could put Makarov in danger.

The court ruled last month against sealing the letter.

Denunciations of Putin are rare from those labelled oligarchs, whose considerable wealth is said to have flowed from their allegiance to the Kremlin.

The Canadian government, however, was skeptical of Makarov and rejected his application for de-listing, arguing he had not sufficiently distanced himself from Putin.

“While you claim to be opposed to Russia’s illegal invasion of Ukraine, you have not issued any public statements denouncing the war in Ukraine or President Putin’s regime,” Foreign Affairs Minister Mélanie Joly told Makarov in a letter last October.

Makarov has asked the Federal Court to overturn the decision, and his Vienna law firm said he refutes the “false allegations” and “fabricated facts” used to justify the sanctions.

“The file has been compiled and commented on in a way that lacks any objectivity,” lawyer Susanne Heger said in a statement to Global News.

“Moreover, the file paints a picture of Mr. Makarov which contradicts the real facts.”

His court appeal claims he was sanctioned only because he is a wealthy former Russian citizen. It also argues there is no requirement to publicly denounce Putin before being removed from Canada’s sanctions list.

Global Affairs Canada declined to comment on Makarov.

As Canada leans increasingly on sanctions as a foreign policy tool, the case is a glimpse at the backroom disputes unfolding between the government and those whose assets have been tied up.

It also sheds light on a critical question: what does it take to get off Canada’s sanctions list?

The president of Areti International Group and once a major shareholder in Calgary-based Spartan Delta Corp., Makarov, 62, became one of Russia’s wealthiest people following the collapse of the Soviet Union.

He insists he is not an oligarch, and denies being close to the Russian regime or having any role in Kremlin politics or the invasion of Ukraine.

But Canadian government documents obtained by Global News describe him as “surrounded by Putin’s cronies.”

A former member of the USSR cycling team, Makarov owes his “enormous wealth” to his ties to Russian officials and Central Asian autocrats, notably Saparmurat Niyazov, who ruled the former Soviet republic Turkmenistan “with an iron fist,” the documents allege.

“Mr. Makarov benefited from obscure deals made possible only by the peculiarities of post-Soviet ‘politics’ based on nepotism, patronage, non-transparency, family connections and remaining beyond any public control,” Canada’s foreign ministry wrote.

“Given his background and the well-known context in which he made his fortune, Mr. Makarov has long been widely perceived, both in the former USSR and in the West, as a typical Russian oligarch.”

Moreover, the natural gas deals Makarov brokered between Russia and Turkmenistan “helped generate significant revenues that the Kremlin has relied on to finance its aggression in the near abroad, including but not limited to Ukraine,” the Canadian documents allege.

He was placed on Canada’s sanctions list shortly after Russia’s 2022 attack on Ukraine, as Canada and its allies attempted to isolate and pressure Putin, and cut off the sources of revenue funding his militarism.

But in his subsequent letter to Canadian officials, Makarov claimed he was a “victim of Mr. Putin’s political tactics.”

He wrote that he had refused to allow Russia to use his oil and gas company Itera “as a mechanism to exert political influence and pressure.”

Russia responded by forcing the sale of the company “at below market price” to state-owned Rosneft in 2013, he wrote.

“Since then, I have left Russia, renounced my Russian tax residency, and have submitted an application to renounce my Russian citizenship.”

In 2023, Makarov gave up his Russian citizenship and instead used a Cypriot nationality he acquired more than a decade ago through an investment-for-passports program, the government report said.

Doing so exposed what the Canadian documents called a loophole in federal sanctions law: it applied only to Russian citizens and residents. Oligarchs could therefore evade sanctions simply by giving up their Russian passports and falling back onto a second citizenship, which many already possessed.

Canada changed the law last year so that it now includes former Russian nationals. Makarov was then re-listed under the amended law.

“I strongly condemn Russia’s invasion on the territorial integrity, sovereignty, and independence of Ukraine by means of the illegal annexation of Crimea in 2014, the support of separatists in Luhansk and Donestk regions, and the subsequent armed invasion which violated all know principles of international law,” he wrote in the statement that accompanies his application for de-listing.

In addition to complicating his business transactions, the sanctions have caused “reputation harm and stigmatization stemming from incorrectly being labeled as a supporter of the Russian regime and its invasion of Ukraine,” he added.

The assets freeze also made it more difficult to support humanitarian projects for Ukrainians, such as tents, evacuation missions, and medical care, including for soldiers.

“Unfortunately, my ability to continue to provide emergency financial assistance to Ukrainian refugees has been blocked and/or unnecessarily delayed because of the Canadian sanctions imposed against me.”

A Global Affairs Canada memo said officials were unable to find any public record of Makarov’s support for Ukrainians. His lawyer said the evidence included letters and details of 16 Ukrainian refugees he has hosted at his residence.

But foreign affairs officials in Ottawa recommended he remain under sanction as “an associate of senior officials of the Russian regime.”

“In the department’s view, Mr. Makarov’s claims that he has distanced himself from the Russian regime by renouncing his citizenship are not credible or sufficiently supported,” according to a Memorandum for Action to Minister Joly.

“The department’s position is that, for a close associate such as Mr. Makarov, unequivocal and public denouncements of the Russian regime and of President Putin specifically are an important step in demonstrating a distancing from the regime.”

“The decision to maintain Mr. Makarov’s listing aligns with the decision of Canada’s allies and will not be made public,” the memo added.

But if it did become known, the memo added, the decision to keep him on the list was “expected to receive positive media and public attention.”

Joly signed off on the recommendation on Oct. 20, 2023, keeping Makarov under sanction.

Australia and New Zealand have also sanctioned Makarov, according to the Canadian government report on his case.

His lawyer said Makarov was not sanctioned by the United States or the European Union, and that the United Kingdom had lifted its sanctions in March.

Two months after Makarov’s request to be taken off Canada’s sanctions list was denied, he was quoted by the Associated Press saying he had nothing to do with the “Ukrainian tragedy.”

But he said it would be pointless to denounce Putin publicly because of his popularity in Russia.

When Makarov later applied to seal his “confidential” statement on Putin, the government cited the article, saying he had “expressed his opposition to the war in Ukraine and his fallout with the Russian government.”

Makarov’s lawyer called that a contradiction to Joly’s allegation that he had not publicly renounced Putin.

Stewart.Bell@globalnews.ca