Russia's billionaires 'horrified' at sanctions threat that could push economy into recession but too terrified of Putin to speak out

• Billionaire oligarchs 'scared of sanctions but more scared of Putin'
• Dare not speak out over measures which could cripple Russian economy
• Putin allies are already suffering from existing U.S. measures
• Britain pushing for EU sanctions against Mr Putin’s 'crony group'
• Foreign secretary Philip Hammond said Russia risks becoming 'pariah state'
• Additional U.S. measures may be imposed in the next few weeks

By Daily Mail Reporter

Russian businessmen dare not speak out about the threat of sanctions because they are so terrified of Vladimir Putin, it has been claimed

Russia's billionaire businessmen are 'horrified' at the prospect of crippling economic sanctions in response to Moscow's involvement in Ukraine, but are too terrified of president Vladimir Putin to say so openly, it has been claimed.

The U.S. has already imposed a raft of sanctions against Russian companies and individuals with Britain and the Netherlands pushing for the EU to impose even tougher measures following the shooting down of Malaysian Airlines flight MH17.

Additional U.S. measures may be imposed in the next few weeks and financial experts believe Russia's $2 trillion economy could be pushed into recession.

According to Igor Bunin, who heads the Center for Political Technology in Moscow, Russia's businessmen may be scared of the sanctions but they are even more scared of Putin.

Mr Bunin told Bloomberg.com: 'The economic and business elite is just in horror.

'Nobody will speak out because of the implicit threat of retribution... Any sign of rebellion and they’ll be brought to their knees.'

U.S. sanctions, introduced before the MH17 atrocity, have already hit Russian state-run companies as well as several billionaire businessmen close to Putin.

OAO Novatek (NVTK), a gas producer partly owned by Putin ally Gennady Timchenko, saw its market value cut by almost $3billion after it was barred from using U.S. debt markets for new financing with maturities longer than 90 days.

The owners of SMP Bank and InvestCapitalBank, brothers Arkady and Boris Rotenburg, who are long-time friends and former judo sparring partners of Putin's, have also been blacklisted by the U.S.

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And last week President Obama banned gunmaker Kalashnikov, which makes the AK-47, from exporting to the U.S. prompting a rush to buy up the remaining supplies.

Yesterday British foreign secretary Philip Hammond said Russia risked becoming a 'pariah state', over its alleged involvement in and reaction to the MH17 atrocity. 

Final indignity: Rescue workers, pictured above, loaded the corpses onto trucks at the crash site in eastern Ukraine, which were then taken to refrigerated train carriages nine miles away

British Prime Minister David Cameron, left, and his Dutch counterpart Mark Rutte, right, are said to be considering a tough raft of sanctions that could cripple Russia's $2 trillion economy

He acknowledged that London could be affected by any restrictions on the flow of Russian money, and insisted other European countries would also have to take some of the pain of a more punitive sanctions regime - which could potentially include EU-wide restrictions on arms exports, a step the UK has already taken.

Mr Hammond said: 'We have tools in our toolbox, we have levers which we can apply to Russia. We can inflict damage on the Russian economy.'

He acknowledged that 'financial sanctions will have some impact on London' and insisted that as part of the package of sanctions 'the pain has got to be shared across the European Union'.

Britain's Foreign Secretary Philip Hammond said Russia risks becoming a 'pariah state'

French arms sales and German dependence on Russian fossil fuels have been seen as possible barriers to tougher sanctions.

Mr Hammond said one option that would be discussed was 'broadening the number of individuals who are subject to sanctions to include the so-called crony group around President Putin'.

Britain is now pushing for EU sanctions against Mr Putin’s ‘crony group’ of wealthy supporters, some of whom use London as their playground.

Downing Street refused to comment on exactly which individuals would be targeted, but there is speculation it could eventually include well-known figures such as Roman Abramovich, who is worth an estimated £5.5 billion and has close links to the Putin regime, as well as Arsenal FC major shareholder Alisher Usmanov, 60, who is worth £11billion.

No10 played down suggestions Mr Putin, who is thought to have spirited away billions, could be personally targeted at this stage.

Sanctions could also include an EU-wide ban on arms sales to Russia and curbs on the ability of Russian energy firms to raise money in Europe.

Mr Cameron, who will make a statement to the Commons on the crisis today, told Mr Putin that Russia’s stance so far was ‘completely unacceptable’.

He urged him to intervene immediately to ensure the victims, whose bodies have been removed by local militias, could have proper funerals.

A source said he told the Russian President: ‘Ten of my citizens have just been killed in a plane brought down by a missile fired by Russian separatists.

A No 10 source said the UK would expect additional names to be added to the list of Russian subject to travel bans and asset freezes under the existing criteria for EU sanctions.

These could include “entities” - firms or organisations - as well as individuals involved in supporting efforts to destabilise Ukraine.

Rich: Wealthy Russian businessmen, including Roman Abramovich (left, with girlfriend Dasha Zhukova) and Alisher Usmanov (right, with wife Irina) could be hit by sanctions

But there will also be a push to extend the scope of the sanctions, to allow those who are influencing or supporting the “Russian regime” to be targeted for sanctions, meaning oligarchs within Mr Putin’s inner circle could be named.

The source said: 'Our approach to Putin will be guided by how best do we think we will persuade him to engage with us and with the separatists to turn this around and find a more peaceful, different outcome.'

One billionaire, speaking on condition of anonymity, added that Putin risks becoming a pariah figure as wealthy and powerful Russians seek to distance themselves from him to keep hold of their money.

A No 10 source said the UK wanted additional names to be added to the list of Russians subject to travel bans and asset freezes under the existing criteria for EU sanctions.

RUSH TO BUY AK-47S AFTER BAN

Sales of Kalashnikov automatic rifles have rocketed in the U.S. after an import ban was slapped on the company as part of sanctions against Russia's involvement in Ukraine

Gun retailers said that since the ban came into effect last week there has been a sharp rise in demand as buyers raced to snap up remaining stocks.
The US Department of The Treasury posted a statement on its website saying US citizens are allowed to buy, own, and use Kalashnikovs providing they were imported prior to when the sanctions came into force.
Robert Keller, manager of K-Var Corp., a Las Vegas-based online gun distributor, told CNN: 'We sell some of the Kalashnikov Concern stuff and that has been selling fast.'

Among the weapons produced by the company are the AK-47, the world's most popular gun, and the more advanced AK-74.
A spokesman for Kalashinkov said US consumers were being punished as a result of the ban.

A statement published on Russian newsite Pravda read: 'The products of Kalashnikov enjoy great demand in the United States.

'Preorders on civilian products are three times the annual volume of deliveries. Thus, the sanctions taken against Kalashnikov go against the interests of American consumers.'

These could include 'entities' - firms or organisations - as well as individuals involved in supporting efforts to destabilise Ukraine.

But there will also be an effort to extend the scope of the sanctions, to allow those who are influencing or supporting the 'Russian regime' to be targeted for sanctions, meaning oligarchs within Mr Putin's inner circle could be named.

In a round of broadcast interviews this morning, Mr Osborne accepted that Britain could not escape unscathed from taking such action against Moscow.

'This is about living in a world where international borders are respected, where commercial airliners are not shot down," he told BBC Radio 4's Today programme.

'It is absolutely in Britain's national economic interest that that is the case.

'Of course any sanctions will have an economic impact, and we are prepared to undertake further sanctions.

'But think of the economic hit... of allowing international borders to be ignored, of allowing airliners to be shot down. That is a much greater economic hit for Britain. We are not prepared to just allow that to happen.'

The separatists placed bodies from the downed Boeing 777 in refrigerated train carriages in the rebel-held town of Torez, nine miles from the crash site, and said they would remain there until the arrival of an international aviation delegation.

They also claimed the plane's black boxes had been recovered and would be handed over to the International Civil Aviation Organisation.

The UK is supporting an Australian attempt to secure a UN Security Council (UNSC) resolution, which would demand 'safe, full and unfettered access to the site" and for the bodies to be handled with respect and dignity.'

A Downing Street source said Russia had blocked an attempt to agree a press statement by the UNSC and the Government was 'realistic' about the prospect of success in getting a resolution through without it being vetoed.

Meanwhile, the US set out the evidence it claimed it had for Russian separatists being behind the atrocity.

Secretary of State John Kerry said it was 'pretty clear' that an SA-11 missile system had been transferred by Russia into the hands of the separatists.