VERONA, Italy >> Sitting on a terrace in Verona as the bells toll at a nearby medieval church, Igor Makarov sips coffee as he describes his life as a billionaire under Western sanctions.

Most of his fortune earned doing business in Russia and the former Soviet Union is frozen, and his plans to develop his energy businesses are currently shelved. His yacht is seized and his two private jets are grounded, so he flew commercial from Cyprus to Italy on budget carrier EasyJet.

“I ask the question, what is the meaning of these sanctions against me? What do they achieve? They don’t help Ukraine,” Makarov said in a rare interview, blinking in the Italian sunshine.

Western governments have sanctioned scores of billionaires in order to isolate Russian President Vladimir Putin, choke off financial support for his war and turn them against him. They wanted the tycoons to “feel the consequences” of doing business with Putin unless they show “a change in behavior,” said Peter Stano, the European Commission’s Foreign Affairs spokesperson.

In April 2022, the White House also announced a proposal to seize the targeted tycoons’ assets in some circumstances and “enable the proceeds to flow to Ukraine.”

In the 21 months since then, however, few of the sanctioned businessmen have criticized Putin and just $5.4 million of an estimated $58 billion in frozen private assets has gone to Kyiv. Some of the wealthy businessmen are now fighting back in court, calling the sanctions process opaque, illegal and unfair.

While sanctions have made life difficult for the tycoons, “it’s not in the short term benefiting Ukraine,” said Nigel Gould-Davies, a former British ambassador to Belarus and senior fellow for Russia & Eurasia at the International Institute for Strategic Studies in London.

Amid growing concerns about the future of Western funding for Ukraine, former diplomats and experts are asking what can be done to make the sanctions more effective and help Kyiv financially.

They say a different approach is needed that could include offering tycoons a more clearly defined route off sanctions lists in exchange for cash and condemning Putin. It’s a controversial idea among Western governments, not least because they don’t want to suggest tycoons can buy their way off lists. Sanctions relief also doesn’t have the backing of Ukraine.

PUTIN AND THE RICH

While in power, Putin has tapped Russia’s elites to fund his pet projects or fill gaps in government funding. On the day of the invasion, he summoned some of them to the Kremlin to shore up their support. Later, he railed against wealthy Russian “traitors” with pro-Western views who take assets abroad.

The West has long viewed much of the Russians’ wealth as the “proceeds of corruption” and saw the invasion as a “golden opportunity” to crack down, said Tom Keatinge, director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute in London.

Lawmakers wanted to punish Putin for the invasion and engaged in “emotional sanctioning,” said Fiona Hill, a former senior official at the U.S. National Security Council. But, punishment alone, with no intended outcome, is ineffective, Hill suggested.

A ‘POINTLESS’ EXERCISE

The personal asset freezes target a wide range of people: top officials like Putin and so-called oligarchs, regional officials with few assets abroad, and tycoons like the 61-year-old Makarov.

Makarov was born in Turkmenistan when the Central Asian country was part of the Soviet Union and founded a natural gas company in the early 1990s.

He is accused by the U.K. of involvement in the Russian energy sector and by Canada of benefiting from close associations with top Russian government officials to broker energy deals that helped generate revenues the Kremlin used to “lay the groundwork” for its invasion of Ukraine.

Makarov denies any wrongdoing and says he has not done business in Russia since 2013, when he was forced by government officials to sell his company at a bargain price to Russian energy giant Rosneft.

About 90% of his assets — more than $1.6 billion — are frozen by Canada, the U.K., Australia and New Zealand.

Most tycoons are not sanctioned in every Western country because each government decides that based on its own legal, economic and geopolitical reasons.

Because he is not sanctioned in the European Union or the United States, Makarov is still able to fund a lifestyle in Cyprus, Italy and Dubai.

He said the biggest impact of sanctions has been on his family — some of his daughter’s bank accounts have been closed and he can no longer access funds in a family trust.

Makarov renounced his Russian citizenship this year, saying he thought it would get the sanctions lifted, but hasn’t explicitly denounced Putin. He called that a “pointless” exercise because of the president’s domestic popularity.

“I have nothing to do with this Ukrainian tragedy, which I am deeply concerned about,” he said. “I am against war all over the world.”

Few tycoons have spoken out publicly and only a handful have unequivocally denounced the war, partly because they know it carries risk. Some still have relatives inside Russia, and they know the Kremlin is able to retaliate against opponents, both at home and abroad.

Banker and entrepreneur Oleg Tinkov had sanctions lifted by the U.K. in July after renouncing his Russian citizenship, condemning the invasion and calling Putin a “fascist.” Arkady Volozh, the head of Yandex — Russia’s equivalent of Google — called the war “barbaric” — but stayed on the EU sanctions list.

A DRAWN-OUT PROCESS

The piecemeal application of sanctions has led some critics to suggest they are a PR tool that does little to force any change in Russia. Current and former Western officials disagree, with experts like Hill calling them part of a “toolbox.”

Sanctions are not “decisive” on their own but do put “pressure on Putin and the whole system,” said Ambassador Daniel Fried, who led the U.S. State Department’s sanctions response to Russia after it illegally annexed Crimea in 2014.

“You don’t expect Russia to be defeated and driven out of Ukrainian territory in a year and a half,” added Gould-Davies. “Why should we expect sanctions to cause the disintegration of the Russian regime in a year and a half?”

As for sending money to Ukraine, the difficulty for Western nations is that the assets of sanctioned individuals generally can only be liquidated if they are related to criminal activity. That can take years to prove, and most tycoons have not been accused of criminal wrongdoing.

New legislation this year allowed the U.S. to send frozen assets to Ukraine, but that related to a tycoon initially sanctioned over Crimea’s annexation. Western nations also are investigating whether they can strip Russia of over $300 billion in sovereign assets.

DEFECT, DENOUNCE, DONATE

Because seizing assets to help Ukraine is complex, some experts suggest governments look at more creative methods.

One idea would be to establish a policy under which Russian businessmen could effectively defect to the West, denounce the war, and make a sizable donation of their assets to Ukraine.

In June, Britain announced a plan in which tycoons could donate frozen funds for Ukraine’s reconstruction. There was no rush to participate — perhaps because the Foreign Office said it would not offer sanctions relief in return, although it could potentially review them if tycoons donate and denounce Putin.

While Western officials say they will never allow tycoons to simply buy their way off the list, Keatinge said both the U.K. Foreign Office and its sanctions office have floated the idea of donation, which suggests “a new chapter … is around the corner.”

Ukraine does not support sanctions relief of any kind on tycoons and would accept it only in circumstances where “a very serious part of their assets are transferred for reconstruction,” said a sanctions adviser in President Volodymyr Zelenskyy’s office. The adviser, who did not have permission to talk publicly and spoke on condition of anonymity, said Ukraine also would want “a very clear and public statement about Putin and the war.”

Only $5.4 million in assets confiscated by the West — in response to Russia’s annexation of Crimea — has gone for the benefit of Ukraine, and “if you can get more than that, it would be a good outcome,” Keatinge said, adding that a tycoon also should have to put themselves at risk “to some degree” by condemning Putin.

Fried said the West should not be looking to “ease sanctions at a wholesale level.”

“But there ought to be a credible off-ramp” for sanctioned individuals, he said, including a denunciation of Putin and handing over some assets to Ukraine.

If a tycoon accepted any such offer, they would probably once again have access to opportunities and fortunes in the West, including assets they might want to pass on to their children. At the same time, they would also trigger Kremlin condemnation and face being branded a traitor.

From the Italian terrace, Makarov seemed frustrated as he mulled the idea.

“For a person to be motivated,” he said, “they must be offered something and it should work.”