UK legislators decry Russian ‘dirty money’

LAUNDERING IS HELPING PUTIN SUBVERT INTERNATIONAL RULES, LAWMAKERS SAY

The report said the UK’s weakness to act to stem the flow of potentially questionable Russian money was exposed just days after the UK expelled Russian diplomats.

A powerful committee of MPs has warned that the government is putting national security at risk by allowing “kleptocrats and human rights abusers to use the City of London to launder their ill-gotten funds to circumvent sanctions”.

The foreign affairs select committee said the government’s lax approach to tackling international money laundering is putting money “directly into the hands of regimes that would harm the UK, its interests and its allies”.

In a hard-hitting report titled Moscow’s Gold: Russian Corruption in the UK, the committee said the government was failing to follow through on the prime minister’s “robust rhetoric” in the wake of the Skripals’ poisoning.

“Despite the strong rhetoric, President [Vladimir] Putin and his allies have been able to continue ‘business as usual’ by hiding and laundering their corrupt assets in London,” the report said.

“These assets, on which the Kremlin can call at any time, both directly and indirectly support President Putin’s campaign to subvert the international rules-based system, undermine our allies, and erode the mutually reinforcing international networks that support UK foreign policy.”

‘Damage dwarfs benefits’

Conservative MP Tom Tugendhat, the committee chair, said: “We can no longer allow ‘business as usual’. The UK must be clear that the corruption stemming from the Kremlin is no longer welcome in our markets and we will act.

“The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City. There is no excuse for the UK to turn a blind eye as President Putin’s kleptocrats and human rights abusers use money laundered through London to corrupt our friends, weaken our alliances, and erode faith in our institutions.”

The report said the UK’s weakness to act to stem the flow of potentially questionable Russian money was exposed just days after the UK expelled two dozen Russian diplomats following the attempted murder of Sergei and Yulia Skripal in Salisbury.

“On 16 March — two days after the government announced the expulsion of 23 Russian diplomats from the UK — Russia raised $4 billion (Dh14.6 billion) in Eurobond issuances, nearly half of which were bought by investors from the UK,” the report said.

A day earlier Russian energy company Gazprom raised €750 million (£656 million) in a bond sale, some of which were bought by UK investors according to VTB Capital, a Russian bank subjected to US sanctions.

Following the sale, the Russian embassy in the UK tweeted:

“The ease with which the Russian government was able to raise funds in London despite the strong measures that the government took in the wake of the Salisbury attack raises serious questions about the government’s commitment to combating Russian state aggression,” the report said.