Russian ‘soiled cash’ flowing by means of London damages UK – MPs

LONDON (Reuters) – “Dirty” Russian cash hidden in British property and laundered by means of City of London monetary establishments is undermining the government’s efforts to take a more durable stance in opposition to Moscow’s “aggressive foreign policy”, UK lawmakers stated on Monday.

Britain’s monetary centre has been an enormous beneficiary of the large flight of Russian money for the reason that 1991 fall of the Soviet Union. London stays the Western capital of alternative for Russian officers and oligarchs who flaunt their wealth throughout Europe’s most luxurious locations.

But diplomatic relations between London and Moscow have hit a post-Cold War low after the poisoning of a former Russian double agent in an English metropolis that Prime Minister Theresa May blamed squarely on Russia. Moscow denies any involvement.

May has vowed to clamp down on Russian cash however a report by parliament’s Foreign Affairs Committee accused her government of failing to again up its rhetoric with credible motion.

“There is no excuse for the UK to turn a blind eye as President (Vladimir) 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,” stated committee chairman Tom Tugendhat.

“The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City.”

The Kremlin dismissed the report as an try to whip up Russophobia and to hurt respectable Russian business pursuits.

“This is nothing other than the latest step in line with unfriendly, unfair competition (against Russian business),” Kremlin spokesman Dmitry Peskov informed reporters.


Among its suggestions, the committee stated Britain ought to work with its allies to make it tougher for Russia to concern sovereign bonds, which aren’t topic to sanctions, through banks which might be sanctioned – a follow that the report stated undermined efforts to rein in Russian behaviour.

The solar is seen rising over skyscrapers within the City of London monetary district in London, Britain, May three, 2018. REUTERS/Toby Melville

“The size of London’s financial markets and their importance to Russian investors gives the UK considerable leverage over the Kremlin,” the report stated.

Separately, the British Treasury Select Committee shall be taking a look at how Russians use the City of London, as a part of its personal investigation into financial crime, a supply aware of the matter informed Reuters.

The British National Crime Agency stated this month that doubtlessly lots of of billions of kilos have been being laundered by means of Britain yearly, and that it was a first-rate vacation spot for Russians trying to legitimise the proceeds of corruption.

The committee cited the 2017 flotation on the London Stock Exchange of En+ Group (ENPLq.L), which manages Oleg Deripaska’s aluminium and hydropower companies, for example of “the contradictions inherent in UK government policy towards Russia”.

Deripaska and En+ are amongst greater than two dozen Russian corporations and businessmen focused by a flurry of U.S. sanctions imposed final month over Russia’s alleged meddling within the 2016 U.S. presidential election and different so-called malign actions. Moscow denies interfering within the election.

The British report didn’t name for particular sanctions in opposition to named Russian corporations or people, however stated: “The use of London as a base for the corrupt assets of Kremlin-connected individuals is now clearly linked to a wider Russian strategy and has implications for our national security.”

After the poisoning of ex-spy Sergei Skripal and his daughter Yulia with a nerve agent within the metropolis of Salisbury in March, May satisfied dozens of nations together with the United States and most EU states to expel Russian diplomats, prompting Moscow to take retaliatory motion.

Monday’s parliamentary report got here after news that the best-known Russian businessman in Britain, the proprietor of Chelsea soccer membership, Roman Abramovich, had but to have his British visa renewed after it expired final month.

Abramovich has not been accused of any criminal activity in Britain.

Also on Monday, Britain’s media regulator opened an additional three investigations into the Russian news channel RT to see whether or not it had breached impartiality guidelines in its reporting.

Additional reporting by Denis Pinchuk; Editing by Gareth Jones and Kevin Liffey

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