Oleg Ossinovski: Russia would not care about a full EU embargo
Despite EU sanctions, the Russian economy has not retracted and is instead growing, while many Estonian businesses continue to do business with the eastern neighbor. Businessman Oleg Ossinovski tells "Impulss" about the ethical side of continuing to do business with Russia and why have sanctions failed to brought the Russian economy to its knees.
"Impulss" met Oleg Ossinovski in his 13th floor office with a sweeping view of Tallinn. The scope of Ossinovski's business is no narrower as the owner of Skinest Group manages 55 companies in no fewer than 17 countries. After 20 years of doing business in Russia, Ossinovski now says he is done.
Ossinovski: We decided that we do not want to operate in a country that fires missiles at cities. We just don't want to. That was the company's decision. And we started the process. It was very hard, very difficult. But we succeeded. We left, even though we incurred losses, of course. We sold around 7,000 of our [train] cars. It was a miracle I managed to sell and get out. A little longer and I would not have been able to leave Russia with my money.
If we sum up all 13 packages of EU sanctions, how noticeable is their effect in Russia?
Let us refer to them as pseudo-sanctions as they are not effective. I believe it is not very noticeable. Considering that real wages have grown by 30 percent over the last two years, unemployment is at an all-time low, all sectors are growing and they have a fiscal surplus... It's basically a deal: let China buy oil from Russia and we'll buy from Saudi Arabia instead. It sounds like refusing to import Russian oil, while it's basically swapping out one with the other. The only thing we managed to get done, even though it was done poorly, is [natural] gas. Because Putin walked into a trap with gas. He built a lot of pipelines and ended up dependent on Europe.
How is your company doing two years into the war? Do you agree with those who say that new markets are hard to find and the situation is difficult?
No. I believe it is a very good time, a time of opportunity. The world order is changing. We're cutting Russia out of our sphere of activity, following Europe's example. We managed record financials in 2023. Of course, Russia was never that big in our portfolio. No more than 14 percent. Therefore, losing the Russian market is not a decisive factor for us.
What about the moral compass of other entrepreneurs? The prime minister is suggesting they should try and find it.
It's a hot mess. First, we need to understand that the prime minister and most journalists are propagandists. They are fighting for things that matter to them. We need to understand that and filter what they say.
What are sanctions? The EU tells us that we cannot buy or sell certain things. But everything else absolutely has to be bought. I wanted to make sure you heard this. For example, the EU needs iron to produce armor for Leopard tanks that it gives Ukraine. The EU lays down an import quota of 1.5 million metric tons annually. But we must buy that much because our factories cannot operate without it.
It is wrong and unfair to condemn entrepreneurs. National security matters to businesses first of all. When hypothetical Russian tanks roll through Narva, a journalist will catch the first ship, at worst forgetting to grab their computer mouse. But we have nowhere to run. We have companies, people, buildings... We have assets that we will protect. Our prime minister... I have great respect for her. I find her to be a kind and wise woman and premier. But she goes too far trying to boost her rating. By harming her entrepreneurs, trying to rally supporters, accusing them of something, she is contributing to lower state revenues and having to hike taxes, which will cause the said rating to go down. She is shooting herself in the foot.
What to think of the prime minister suggesting journalists should try to answer questions regarding your involvement in transport in Russia?
A good question. I think you should look into it. What is the problem with our press? They have been studying Herr Hitler's "Mein Kampf." As we recall, he said that the national socialists must only tell the truth, but not the whole truth. And they're brilliant at it. They are speaking half-truths, with the result being pure fiction.
Estonian weekly Eesti Ekspress wrote six months ago that Oleg Ossinovski has allegedly registered a Russian rail business that used to be in his name as belonging to his sister Veronika Ossinovskaja. The paper also wrote that the firm, now registered in Ossinovskaja's name, had moved €770 million worth of iron ore belonging to oligarch Alisher Usmanov during the war.
The Eesti Ekspress article seems to suggest you know Alisher Usmanov personally.
This is the other half of the truth. Skinest has never been involved in the transport of iron ore, nor do we have plans to start.
It is a different company, as far as I'm aware.
That company was not involved in it either. We sold it. We sold a few businesses when the war started. The company in question has never been involved in such transport. Skinest has never been involved, nor will it be. That is the first truth.
The second concerns the money from Russia that they're talking about. The company... I know everything now. Everyone has realized everything following the scandal. The company gets its money from Western traders and has moved its business out of the seaport of Ust-Luga.
Is Vero Logistics the company in question?
Yes, that is what it's called now. It used to be Skinest Wood. The trader has pulled its transports out of Ust-Luga and is now creating work for Estonian ports and Estonian Railways. Its customers are companies in Germany and Italy. German companies use it to manufacture armor, Leopards, as well as [artillery] shells which Estonia is also buying. The money comes from Germany. Allow me to ask, where in all this do you see Russian money?
The company's name was changed when Veronika Ossinovskaja became the owner of Skinest Wood, becoming Vero Logistics. The firm is owned in full by another company registered in the name of Ossinovskaja, which is registered at an address owned by Oleg Ossinovski.
The article reads that you registered the company in your sister's name, sold it to her in Russia and that she is using it to transport iron ore to the EU.
You see, even you got it that way. But it's a complete lie – every word you said, it's pure fiction.
Does that mean you did not sell the company to your sister? What part of it is fiction?
Skinest sold an empty company that had never done anything, had never transported iron ore. Skinest is also currently not in that business. That is the truth. Besides, that was not the point of the piece, the point was that Ossinovski is using Russian money to fund parties. (Oleg Ossinovski has made major financial donations to the Social Democratic Party and Eesti 200 – ed.)
Yes.
Allow me to clarify that even that company, which has nothing to do with Ossinovski, does not have Russian money. But that's no good for a story. Having your headline state that a German company moved its business out of Russia and is creating work for Estonian ports, paying taxes etc., or that there is money coming from Germany would not interest anyone. What you write instead is: Ossinovski, €700 million. I'd like to see banks in Estonia just letting €700 million be transferred to Russia. It's complete nonsense, while it seems plausible enough for old ladies in the countryside. Therefore, you don't have to deal in half-truths when you can just tell the whole truth.
But do I have it right that you sold the company to your sister? That is what the piece was centered around?
It was not. Let us talk about the big picture. I'm reluctant to advertise Mr. Luik (Ekspress Grupp owner Hans Luik – ed.) and his publications.
What is your opinion of a full embargo on Russia? Some Estonian politicians seem to favor it.
It is impossible. Russia would not care one bit if Europe laid down a full embargo. It wouldn't even feel it. But if it were the entire so-called civilized world, that would of course be a disaster for Russia, but also for the rest of the world.
Should 230 million metric tons of oil that the world buys every year leave the market, the price of gasoline would grow tenfold. There would be lines for miles, rationing and gas stamps for something like 5 liters a month. That is why it cannot be done all at once.
Many are trying to predict when the war might end, including entrepreneurs all over the world, especially in Ukraine. When do you expect the war will end?
I'm not a military man, I'm a railroad man. But it kind of makes sense to me that the war will end when Ukraine is given long-distance missiles. That very day. If politicians used the energy currently being spent on arguing over whether Russia should no longer be supplied with combine harvesters... What difference does it make whether they have combined harvesters or not. It's foolishness. We are engaged in, how to put it... imitating effect. It is likely that our prime minister has not yet managed to convince [U.S. President Joe] Biden to give [Ukraine] those missiles. Well, we can say, let's stop drinking Russian vodka or something like that.
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Editor: Mirjam Mäekivi, Marcus Turovski