Ukraine has imposed punitive sanctions against Dmytro Firtash, a powerful tycoon indicted by the United States for corruption, as President Volodymyr Zelenskiy widens his crackdown against influential elites ahead of his first official visit to Washington next month.
National Security and Defense Council Secretary Oleksiy Danylov on June 18 announced the sanctions against Firtash, who is currently living in Vienna while fighting extradition to the United States. In announcing the sanctions, Danylov accused Firtash of selling titanium to Russia's defense industry. Kyiv is engaged in a war against Russia-backed separatists in eastern Ukraine that has left more than 13,000 people dead since 2014. Danylov did not give details about the sanctions, although they historically freeze an individual’s assets inside Ukraine, including bank accounts. Firtash controls key businesses in Ukraine’s chemical, titanium, and natural-gas industries. Forbes this year listed him as the country's 25th wealthiest individual, with a net worth of $420 million. The United States indicted Firtash, who is believed to have strong ties to the Kremlin, in March 2014, shortly after Russia annexed Ukraine’s Crimean Peninsula. U.S. prosecutors accuse the Ukrainian businessmen of bribery in connection with an Indian titanium project that U.S. aerospace giant Boeing was interested in. Firtash denies the charges and calls them politically motivated. He is currently seeking a new trial after Austria's Supreme Court upheld his extradition in 2019. Although he has lived in Austria since 2014, Firtash has continued to prosper financially in Ukraine. He is believed to control around 75 percent of the country's gas-supply companies. Yuriy Vitrenko, the CEO of the state-owned natural gas company Naftogaz, told RFE/RL earlier this month that he suspected Firtash might be shifting his profits from Ukraine's natural-gas industry to affiliated companies in Western Europe through a scheme known as transfer pricing. He also expressed concern that Firtash was selling natural gas he bought at below-market prices from Naftogaz to industrial users in violation of an agreement.
'Hold Them To Account'
George Kent, the deputy U.S. assistant secretary of state who oversees Ukraine, called on Kyiv in April to go after Firtash as part of its anti-corruption agenda. Kent highlighted Firtash’s role as an importer in the 1990s and 2000s of natural gas from Russia, a business that many officials and analysts have said was rife with graft. "Why is it that it is the U.S. who indicts and goes after corrupt Ukrainians?" Kent said, referring to the U.S. indictment against Firtash. "It's time for the Ukrainian leadership and the justice system -- rather than not making decisions against corrupt oligarchs -- to use Ukrainian institutions to go after corrupt Ukrainians and hold them to account," he said. The administration of U.S. President Joe Biden has made Kyiv’s progress on reforms, including fighting corruption, a greater priority in the two countries' relationship. Biden stressed the need for Ukraine to push ahead with reforms and tackle corruption in a phone call with Zelenskiy on June 7. During the call, Biden extended an invitation to the Ukrainian leader to visit the White House this summer.
When asked a day later by Senator Chris Murphy (Democrat-Connecticut) during a Foreign Relations Committee hearing if there were any reforms that the Biden administration wanted to see Ukraine deliver prior to Zelenskiy’s White House visit, Secretary of State Antony Blinken cited several, including a desire to see "people engaged in corrupt practices brought to justice."
In an op-ed posted on the website of the Atlantic Council, a Washington-based think tank, Zelenskiy said his administration would be taking steps to rein in the power of tycoons like Firtash who wield great influence on Ukraine from behind the scenes. Ukrainian and Western experts blame the tycoons for blocking crucial economic and political reforms that could put the country on a path toward greater prosperity and European integration.
Zelenskiy’s administration in February sanctioned Viktor Medvedchuk, a powerful tycoon and politician close to Russian President Vladimir Putin, for allegedly helping the separatists in eastern Ukraine.
The Ukrainian president said in his May 18 op-ed that the sidelining of Medvedchuk "was just the beginning" of his campaign against tycoons.