During a visit to Monaco last week, the topic of Russia and Crimea popped up with even more frequency than the BBC news alerts on my mobile. But unlike chat in London—where idealised armchair diplomacy is practically a state sport—the practical realities of the situation for Monegasque businesses were clearly apparent.

Russians spend a lot of time and money in Monaco, as anyone who’s visited in August can attest. Although official statistics on the nationality of visitors aren’t available, a variety of anecdotal sources pin the annual percentage of Russians in Monaco at seven, while it’s guesstimated that they account for upwards of 30 per cent of visitors in the month of August alone.

What they spend in both shore-based and yachting activities can be only guessed at, but is generally accepted to be significant. “There are more Russians coming to Monaco now than there have been in the 12 years I’ve been living here,” Kevin Bonnie, managing director of International Yacht Collection told me. “This is a mythical place for Russians.”

“Without the Russians, I suspect Monte Carlo might run at a loss in the summertime,” offered Glenn Weiss, a Monaco-based yachting lawyer with Russian clients. “There’s an historical connection between the Cote D’Azur and Russia. Some of the early vacationers here were Russians and the Moscow-Nice train, which ran during the time of the Tzars, has now been recreated."

It is estimated that 30 per cent of the tourist traffic in Monaco in August is Russian

Between 1912 and the early 1990s under the Soviet regime, Russians weren’t permitted either foreign travel or access to luxury goods at home. For the past 20 years, these restrictions have been lifted, and Russians with means have taken to both travel and luxury with gusto. “Russians built a lot of the villas on Cap Ferrat,” Bonnie continued, referring to an exclusive enclave of billionaire mansions situated along a peninsula just a few kilometres west of Monaco, in France.

“Monaco itself is a luxury brand,” Weiss says. “It’s the perfect embarkation point for a yachting holiday. It’s a fantastic place to come for a couple weeks in August.”

Russian license plates are prevalent in Monaco; a sign of the Principality's popularity with wealthy Russians

In August, the streets around Port Hercule are loud with the engines of rare sports cars with Russian license plates, most of which will be trucked in to avoid the week-long round trip on their own wheels. Others will arrive for the annual Moscow to Monaco rally.

But the number of these big-spending visitors to Monaco could be cut dramatically if the EU imposes further sanctions on Russia. One of the key sanctions on the table is travel restriction, which is easily activated by denying visas to Russians entering the “shengen” area, of which Monaco is a part.

The US, EU and Western allies have already introduced sanctions against several Russian politicians, lawmakers and businessmen, freezing their assets and banning the issue of visas for them. Further sanctions are being considered.

Ironically, as a means to aid ailing economies with an injection of tourist dollars, on 1 April this year, the EU announced an easing of the visa application procedures for visitors from China, India, Russia, Saudi Arabia, South Africa and Ukraine. The commission estimates as much as €130 billion in total direct spending over five years could be generated.

HSH Prince Albert II of Monaco with Russian President Vladimir Putin, in the Kremlin, Moscow, 4 October 2013

But relations between Russia and Monaco are generally warm. Earlier this year, HSH Prince Albert II announced that 2015 would be the year of Russia in Monaco. This follows a number of successful collaborations between the two heads of state around events like the Olympics and polar expeditions. Celebrations will include state visits, musical performances and other activities. No change of plans have been announced since the recent actions in Ukraine.

In a curious development, Russian President Vladimir Putin has proposed a new law which would create a gambling zone in Crimea, making it effectively the Las Vegas—or Monaco—of the Black Sea. One imagines the relations between the two states might grow warmer with this news.

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