OPINION — The recent bizarre events in Russia have brought increased attention to Yevgeny Prigozhin and his brutal mercenary group, Wagner. While Prigozhin’s future is as yet, uncertain, Russian President Vladimir Putin and his foreign minister Sergey Lavrov have made clear that Wagner will continue to serve as a paramilitary arm of the Russian state.
Wagner fighters have raped, murdered and stolen their way across Africa, the Middle East and Ukraine, executed renegade fighters with sledgehammers, and even killed Russians in Russia. Despite long-standing calls from Congress and elsewhere, elements of the State Department have resisted efforts to designate the Wagner Group as a Foreign Terrorist Organization (FTO).
We believe it’s well past time to take this action.
The US Government has imposed the same financial sanctions against Prigozhin and the Wagner Group a number of times, most recently, labeling Wagner as a Transnational Criminal Organization. What these sanctions have in common is that they only apply to financial transactions that touch the United States. Designation as an FTO, by contrast, would constitute a stronger step in denigrating Wagner Group’s ability to operate overseas. It would have the added benefit of making Putin’s transfer of ownership from Prigozhin to a more pliable oligarch, much more complicated.
Because of the broad reach of U.S. material support statutes, designation as an FTO would also impede Wagner Group members’ ability to travel internationally, transfer money, and engage in commercial activities whether they touch the United States or not. Moreover, these steps would make international lawyers, corporate service companies, and banks more reluctant to engage with Wagner because of the potential for criminal indictment under U.S. law.
For the past year, we have been among those advocating that the Department of State designate the Wagner Group as an FTO. Wagner clearly meets the statutory requirements for such a designation for its horrific activities in the Central African Republic, Libya, Syria and Mali, as well as for extensive documented war crimes in Ukraine. Even if the Putin regime removes Prigozhin from his role as the owner of the Wagner Group, we can expect the Wagner enterprise’s behaviors in Africa, the Middle East, and Ukraine to continue unchanged, and its terrorist activity to continue unabated.
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The Wall Street Journal reported on June 28, that the Putin regime has moved to take over Wagner’s operations in Africa and the Middle East in response to Prigozhin’s failed march on Moscow. As the Post has reported, over the course of a decade, Prigozhin has built the Wagner Group into a sprawling commercial and paramilitary operation with its tentacles reaching across broad parts of Africa.
While replacing Wagner mercenaries with Russian troops would be a relatively straightforward exercise (though with potentially significant consequences under international law), taking control of Wagner’s commercial enterprises will be a much more complicated affair.
Wagner has made its living by exploiting the natural resources of the countries it “assists” (oil from Syria; gold from the Sudan; gold, diamonds, and timber from the Central African Republic, with Mali and Burkino Faso currently in its sights for future exploitation). We can assume that Prigozhin has hidden Wagner controlled companies and assets behind a series of shell companies scattered throughout offshore jurisdictions. Transfer of ownership of these entities, as well as ensuring that Putin’s minions have access to Wagner bank accounts, will require the assistance and cooperation of a variety of law firms, corporate services companies, and banks whose adherence to “know your customer” requirements likely is less than robust.
While there are civil and criminal penalties associated with violating existing Department of the Treasury sanctions, these existing sanctions require a nexus to the United States financial system. Absent an FTO designation, Wagner’s western enablers, to include shipping companies and entities that sell their extraction equipment to Wagner entities, still have some breathing space to facilitate any required transfer of ownership from Prigozhin to a more trustworthy oligarch.
Designation of Wagner as an FTO, however, would put these same enablers at much greater risk of running afoul of US criminal law, since these assets would belong to an organization that has been designated by the Secretary of State as an FTO. Assistance to transferring Wagner assets to a new oligarch would mean potential indictment under US law for material support to terrorism.
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While there has been some Congressional movement with the introduction of the HARM Act, which would instruct the Secretary of State to designate the Wagner Group as an FTO, the legislation seems to be stuck in the limbo of an increasingly dysfunctional Congress. In the meantime, whether under the control of Prigozhin or an oligarch more loyal to the Putin regime, we can predict that Wagner’s behavior will not change, and that Wagner activities will continue to be a destructive force throughout those parts of Africa where it has managed to secure a foothold.
With Putin now likely seeking to unwind Prigozhin’s ownership of the various entities that comprise Wagner Group’s commercial exploitation activities in the Central African Republic, Syria, Libya, and most recently Mali, this is the time to designate Wagner as an FTO.
Even if Prigozhin is eliminated from his ownership position by the Putin regime, Wagner will continue to be a force for violence and disruption on behalf of Russian malign influence wherever it is located. While some have advocated for naming Russia a State Sponsor of Terrorism, designating Wagner as an FTO would have practical impacts in the shady commercial world in which Wagner operates.
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