Russian ‘soiled cash’ flowing by way of London damages UK – lawmakers

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

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

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,” mentioned 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 professional Russian business pursuits.

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


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

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

Earlier this month the British National Crime Agency mentioned probably a whole bunch of billions of kilos have been being laundered by way of Britain yearly, and that it was a first-rate vacation spot for Russians seeking 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 instance 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 brand new flurry of U.S. sanctions imposed final month over Russia’s alleged meddling within the 2016 U.S presidential elections and different so-called malign actions. Moscow denies interfering within the U.S. election.

The British report didn’t name for particular sanctions in opposition to named Russian corporations or people, however mentioned: “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 UK visa renewed after it expired final month.

Abramovich has not been accused of any criminality.

Also on Monday, Britain’s media regulator opened an extra three investigations into 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

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