The UK must get serious about confronting the full spectrum of President Putin’s offensive measures.
The robust rhetoric from the Prime Minister following the attempted murder of Sergei Skripal and his daughter has been undermined by the ‘business as usual’ sign hanging on the UK’s front door, says a new Report from the Foreign Affairs Committee.
Published today, Moscow’s Gold: Russian Corruption in the UK, says the use of London as a base for the corrupt assets of Kremlin-connected individuals is now linked to a wider Russia strategy with implications for the UK’s national security.
Tackling this should be a major priority for the UK’s foreign policy, says the Committee. There is a direct relationship between this wealth and the ability of President Putin to execute his aggressive foreign policy and domestic agenda.
Chair of the Committee, Tom Tugendhat MP, said:
"The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transaction 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.
"As the 2018 National Security Capability Review made clear, money laundering is a foreign policy issue as it affects our national security. Today, we make recommendations to Government with the aim of hitting Kremlin-linked individuals in their pockets and levering pressure on the regime.
"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. We must be united in our efforts to match rhetoric with action – in the City, through Government policy and among allies in the US, G7 and EU. We call on the Foreign and Commonwealth Office to set out a coherent strategy on Russia that clearly links together the diplomatic, military and financial tools that the UK can use to counter Russian state aggression."
In order to exert maximum financial and economic leverage, the Committee recommended the Government should:
- Close the gaps in the sanctions regime that have seen companies use London markets but be sanctioned in other jurisdictions;
- Close the loopholes that allow debt issuance be used to go around sanctions;
- Extend sanctions to target more individuals who are closely linked to President Putin’s regime, including by using the Magnitsky powers set out in the Sanctions and Anti-Money Laundering Bill; and
- Crack down harder on illegal money-laundering by speeding up plans to promote transparency of corporate ownerships.