is offering to transfer $1 billion of his personal wealth into a Ukrainian bank he co-founded, a proposal that people familiar with the issue said is intended to persuade the U.K. to lift sanctions against him.
Mr. Fridman’s proposal is among a number of overtures that blacklisted business executives, banks and companies are quietly making to Western authorities as those nations prosecute a campaign to economically cripple Russia in response to its war in Ukraine, according to U.S. officials.
Mr. Fridman denied having made a quid pro quo offer to Ukraine.
“The U.K. does not condone any sanctions avoidance,” the British Foreign Office said.
In March, in the wake of Russia’s invasion of Ukraine, Western allies sanctioned Russian oligarchs and political allies of Russian President
Among those targeted by the European Union and the U.K. were Mr. Fridman, who owns controlling shares in Alfa Bank, and his business partners Petr Aven and German Khan.
Mr. Aven and Mr. Khan declined to comment.
While none of the men have been sanctioned by the U.S., and they insist they have no influence on the government in Moscow or its execution of the war in Ukraine, Alfa Bank, one of Russia’s largest private financial institutions, is blacklisted by the U.S. Treasury Department.
Transfer of any of Mr. Fridman’s assets in Alfa Bank, in which he owns controlling shares, would require Treasury approval.
The war in Ukraine has upset the balance that Mr. Fridman, who was born in Soviet-era Ukraine, has for decades skillfully maintained between his Western and Russian business interests.
Since March, Mr. Fridman’s assets have been frozen in the U.K. Companies and investors have been severing ties with him to avoid being sanctioned themselves.
Alfa Bank-Ukraine has proposed to officials in Kyiv that Mr. Fridman be permitted to transfer $1 billion of his personal wealth into the bank, said Roman Shpek, the financial institution’s supervisory board chairman. That money would be used to finance critical projects in Ukraine related to infrastructure, healthcare, and food and energy security, he said.
“The bank would like, as one of the biggest private banks in Ukraine, systemic banks, to be an active player in recovering the Ukrainian economy after the war,” said Mr. Shpek, a former Ukrainian economy minister.
Mr. Shpek said Alfa-Bank Ukraine sent its proposal to the National Bank of Ukraine in June. A spokeswoman for the National Bank of Ukraine, which oversees the financial sector and would have to approve such a transfer, didn’t reply to a request for comment.
Mr. Shpek denied that the proposed transfer was intended to secure sanctions relief.
“For us, it’s a really important economic project, and we would like to avoid any speculation that Fridman and his partners would like to invest $1 billion to Ukraine to receive something in another country,” Mr. Shpek said. “I don’t see this as some speculation or game that in the future can help to avoid or lift sanctions. It’s a completely different issue.”
Mr. Fridman would need a special dispensation from the EU to access and transfer money from his accounts there to Ukraine. Last week, Alfa-Bank Ukraine petitioned the Council of Europe on his behalf, Mr. Shpek said.
A spokeswoman for the Council of Europe didn’t reply to a request for comment.
Dozens of sanctioned Russians are contemplating similar moves to free themselves from financial straits, according to the people familiar with these discussions. Ukrainian officials have considered creating a fund into which sanctioned Russians could deposit money, according to the people familiar with these discussions in Kyiv. That money would then be used to benefit Ukraine, though it is unclear whether it might lead directly to sanctions relief.
Rostyslav Shurma, the deputy head of the Ukrainian presidential administration, said that the government in Kyiv would address the Fridman proposal only as part of a broader framework that might include the fund being considered to help Ukraine. “This should be the general approach to all the sanctioned Russians,” Mr. Shurma said.
Sanctioned business executives and companies are also reaching out to the U.S., U.K. and other Western authorities as they explore how to ease sanctions, preserve their wealth and free frozen assets.
“There are a lot of parties petitioning both the U.S. Treasury and State Departments to be removed from the lists,” said Erich Ferrari, an attorney who has previously represented several high-profile sanction targets.
While the Treasury Department oversees most U.S.-imposed sanctions, the State Department is reviewing delisting petitions, Mr. Ferrari said. The proposals include business executives and firms severing relationships with the primary targets of Western sanctions, divesting ownership and stepping off the governing boards of sanctioned firms, he said.
A State spokesman said the department wouldn’t comment on diplomatic negotiations.
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“The United States government has been very clear in public and private communications that sanctions will target Russian and Kremlin elites, oligarchs, and Russia’s political and national security leaders who have supported Russian President Vladimir Putin’s brutal and illegal invasion of Ukraine,” the spokesman said.
A spokeswoman with the Treasury Department declined to comment.
Playing the role of a peacemaker in the war has already benefited one other Russian oligarch, billionaire
Mr. Abramovich wasn’t targeted by the U.S. government after an appeal by Ukrainian President
though he has been subject to British sanctions. Mr. Abramovich has been acting as an intermediary between Ukraine and Russia on a number of issues, including prisoner exchanges, the Journal has previously reported.
The U.S. hasn’t sanctioned Mr. Fridman, but the Treasury Department has imposed one of its most powerful penalties by prohibiting transactions and any other business dealings with Alfa Bank.
Transfer of any of Mr. Fridman’s assets in Alfa Bank or any other interests in sanctioned companies would require Treasury approval. In other cases, the U.S. has been reluctant to grant approval without significant concessions and oversight to ensure that the purpose of the sanctions—depriving Mr. Putin and his allies of funds and power—is still being served.
While turning prominent Russians to its cause could bring public-relations benefits, Ukraine would likely face a domestic backlash if it provided political cover to prominent figures who might be able to influence the Kremlin.
“We cannot have any deal with Russians,” said Mariana Bezuhla, the deputy chair of the Ukrainian parliament’s Committee on National Security, Defense, and Intelligence. Ms. Bezuhla said that Ukraine should work only with Russians who provide military intelligence.
Mr. Shurma said that Ukraine would consider any such deal for sanctions relief only after the war has ended.
“The target of the sanctions is not to get some money from some wealthy Russians,” he said. “The target of the sanctions is to create decent pressure on the elites to stop the war.”
Max Colchester and Jenny Strasburg contributed to this article.
Corrections & Amplifications
Alfa Bank-Ukraine is a private bank in Ukraine co-founded by Mikhail Fridman. An earlier version of this article incorrectly said it was a subsidiary of Alfa Bank in Russia, which Mr. Fridman founded. Also, Roman Shpek is a former Ukrainian economy minister. An earlier version of this article incorrectly said he was a former finance minister. (Corrected on Sept. 8)
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