Sanctions On Pro-Iranian Russian Oligarchs Must Be Upheld

Photo Credit:

Alexsey Chalabyan aka Xelgen

Separate from the Ukraine War, many of the oligarchs are supporting one of the U.S.'s major geopolitical enemies.

The Trump administration is considering lifting sanctions on Russian oligarchs to placate Moscow and help facilitate a peace agreement with Ukraine. However, carte blanche sanctions relief is too extreme an approach and could damage U.S. national interests in several key regions, including the Middle East. This is because many of the oligarchs who were sanctioned are actively supporting Iranian and its machinations in Europe and the Middle East.

On February 5, 2025, Attorney General Pam Bondi disbanded the Klepto Capture task force targeting Russian oligarchs. However, the administration still must conduct a strategic assessment to pinpoint key figures who undermine U.S interests by supporting the war in Ukraine and assisting terrorist sponsors such as Iran. Oligarchs who actively support conflict must be the focus of U.S. and European law enforcement, and sanctions against them should be tightened.

The DOJ established the Klepto Capture inter-agency task force to target the financial networks that Russian oligarchs used to fund the war against Ukraine. It aimed to dismantle networks that smuggled military and dual-use technology to Russia by freezing and confiscating assets belonging to sanctioned individuals. Several oligarchs were caught in the net, including those who funded media and movements that sought confrontations with the West. This included people such as Yuri Kovalchuk, founder of Bank Rossiya and controller of significant media assets, and Konstantin Malofeev, consummate ideologues of the Russian far right and supporters of the war in Ukraine.

What matters moving forward is that scores of oligarchs also maintain close ties with Iran. These include Vladimir Potanin, Russia’s second wealthiest man, owner of Russia’s Rosbank and investment firm Interros, who possesses a large stake in Norilsk Nickel, one of Russia’s ten largest public companies. Potanin is a major investor in the Iranian leading e-commerce company Digikala. Potanin was sanctioned by the US in December 2022.

An even more egregious example is Ruben Vardanyan, a Russian-Armenian billionaire accused of money laundering and terrorist financing. He is also alleged to have been involved in the attempted removal of Nikol Pashinyan, the Western-leaning Prime Minister of Armenia, while furthering the interests of the Ayatollah regime in Iran. Vardanyan was the founder of the Russian offshore company Troika Dialog, which was involved in various corruption scandals, including illegal fund transfers to influential figures in Moscow.

Vardanyan also served as state minister of the separatist entity in Karabakh, the formerly occupied territory of Azerbaijan, from 2022 to 2023, when he was dismissed from office by then-Karabakh President, Arayik Harutyunyan. In January 2022, Vardanyan was one of those described in H.R. 6422 – The Putin Accountability Act for U.S. Anti-Russian Sanctions.

Vardanyan is not only implicated in destabilizing the South Caucasus, but is also one of the major players furthering Iran’s ambitions. In 2016, Vardanyan applauded President Obama’s decision to partially lift sanctions on Tehran calling it an opportunity to develop Iran’s links with Armenia and the outside world. His ties to Iran can be traced through the Russian Gorchakov Fund, which organizes events in various countries, including Armenia, featuring government-approved speakers from Tehran.

In February 2023, Vardanyan gave an interview to Iranian political analyst Ehsan Movahedian, one of the key ideologists of the Iranian regime, known for his antisemitic remarks. In the interview, Vardanyan praised the Tehran regime and its regional policy.

Azerbaijani security services detained Vardanyan in 2023 when Baku claimed its Karabakh region. Vardanyan was charged with terrorism, embezzlement, organizing and arming illegal militias, planning, preparing, and waging an aggressive war, and deporting or forcibly displacing the population. Prime Minister Pashinyan distanced himself from Vardanyan, questioning whether Moscow had sent him to Karabakh to undermine the Armenian government and work against the post-war peace process.

In the closing days of the Biden Administration, Armenia signed a Strategic Partnership Charter with the U.S. that includes provisions to enhance border security and prevent the smuggling of nuclear technology and radioactive materials, including uranium, to Iran. PM Pashinyan’s strategy has been to reduce Armenia’s dependence on Russia, open up the country to the outside world, and move closer to the U.S. and EU.

Iran opposes a stable South Caucasus that is increasingly linked with the West, as this will strengthen Turkey’s role and deepen Israeli-Azerbaijani relations. In the past, Tehran cooperated closely with Armenia. However, its influence is diminishing due to Armenia’s Western orientation and Azerbaijan’s increasing role in energy supplies and trade routes between Central Asia and Europe.

Oligarchs fueling the war in Ukraine and linked to Iran should remain firmly within the West’s law-enforcement focus by seizing all available assets and prosecuting them to the fullest extent of the law. Their corrupt wealth enables Iran to challenge U.S. interests by supporting terrorist proxies, destabilizing international trade by disrupting Red Sea shipping, attacking Israel, and promoting instability across the Caucasus, which endangers cooperation and trade with Central Asia.

The Trump Administration has rightly designated the Iranian-backed Houthis a foreign terrorist organization, reversing Biden’s earlier softening of America’s position. In seeking de-escalation in Ukraine and the Middle East, the White House needs to maintain the pressure on individual billionaires who fuel war in both regions.

Janusz Bugajski is a Senior Fellow at the Jamestown Foundation in Washington DC and author of two new books: Pivotal Poland: Europe’s Rising Power and Failed State: A Guide to Russia’s Rupture.

Image by Alexsey Chalabyan a.k.a Xelgen. CC BY-SA 4.0.