Maybe there's a spare bedroom  at the Kremlin.

Will Russia's Billionaires Keep Their Villas?

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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Arkady Rotenberg, Vladimir Putin's friend and judo sparring partner, has become the first sanctioned Russian businessman to see his property seized in Europe. Unfortunately, he's not likely to have a lot of company.

According to Bloomberg, Italy has seized some $36 million worth of Rotenberg's assets, including the Bergluxury hotel in Rome and properties in Sardinia. Judging from the response of the Russian billionaire, who has been on the EU sanctions list since July 28, he didn't conceal the properties because he didn't realize they counted as "assets."

"Only accounts and assets are subject to sanctions, and I don't have those in Italy, " Rotenberg told the Interfax news agency. "That shows again the illegitimacy and absurdity of this situation."

It's not surprising that Rotenberg doesn't fully grasp the concept of assets. He made his fortune on construction contracts with the natural gas monopoly Gazprom and the organizing committee of the Sochi Olympics, endeavors that required a better understanding of Russia's vast state purchasing system than of business terminology.

What's truly surprising is that more Russian assets haven't been seized throughout Europe. Consider, for example, the Hartwall Areena, a sports stadium in Helsinki that Rotenberg bought last year in partnership with Gennady Timchenko, another billionaire friend of Putin who is on the U.S. but not the EU sanctions list. Concerts at Hartwall by U.S. artists such as Miley Cyrus and Justin Timberlake have gone ahead, and nobody has tried to seize the venue, even though it has been widely citedin the mediaas belonging to Timchenko and Rotenberg.

It wouldn't take rocket scientists to track down the assets of other sanctioned Putin cronies, whose properties tend to be on the order of Rotenberg's Italian villas and hotel. All European investigators need is access to company registers, intelligence data and any number of emigre witnesses as hostile to Putin as they are knowledgeable about his friends' dealings. The logical conclusion is that European governments aren't really trying -- possibly a sign that they are planning to do business with Putin's regime and, inevitably, with his cronies, when the Ukraine crisis blows over.

The U.S. isn't making much more progress. In June, Bloomberg reported that the Department of Homeland Security had begun a search for sanctioned Russian billionaires' "shiny toys." "This is the equivalent of the U.S. Treasury throwing up a bat signal," John Tobson, who heads the agency's financial investigation division, was quoted as saying. "It's all hands on deck and here is your mission." So far, the mission doesn't appear to have turned up even as much as the Italians did. Otherwise, given the state of the U.S.-Russian relationship, the results would have been all over the media.

Personal sanctions against members of the corrupt Putin elite are the only ones that can have some effect without punishing ordinary Russians. They are also fair in a sense: Europe and the U.S. should not have harbored that kind of capital in the first place. It is these sanctions, however, that appear to be the least strenuously enforced.

Corrects fifth paragraph to say that Gennady Timchenko is on the U.S. but not the EU sanctions list.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:
Mark Whitehouse at mwhitehouse1@bloomberg.net