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Labour Demands Government Plan For Seizing "Dirty Russian Money"

Protesters have been calling for Russian assets in London to be seized since the start of the conflict (Alamy)

5 min read

Shadow Foreign Secretary David Lammy has said Labour will use the Ukraine Recovery Conference this week to press the government on seizing and repurposing Russian assets in the UK towards the rebuilding and recovery of Ukraine.

Speaking to PoliticsHome ahead of the conference, Lammy accused the government of not having a plan on how to seize assets and said figuring out how to do so would be a “focus” for Labour.  

The Ukraine Recovery Conference is being hosted jointly by the UK and Ukraine in London between 21-22 June, bringing together politicians, charities, campaigners, and representatives from the private and public sectors to discuss international support to help Ukraine recover from the effects of the war with Russia. 

Since Russia launched its full-scale invasion of Ukraine in February 2022, the UK has frozen more than £18bn in Russian-owned assets, including sanctions on the former Chelsea FC owner Roman Abramovich. More than £48bn in Russian assets have been frozen across the world. 

The government announced on Monday that Russian sanctions will remain until compensation is paid to Ukraine. The foreign secretary also announced that a new route will be established for Russians to voluntarily donate their frozen funds towards Ukrainian reconstruction. 

However, the next question for the government is what to do with frozen assets where the owners do not choose to donate them, with debates over whether they can be seized and repurposed towards funding reconstruction in Ukraine, and if so, how this would be done.

“There are significant assets in countries like our own that should be repurposed to fund the rebuilding of that country,” Lammy said, adding that the money should not all be coming from UK taxpayers.

“It is hugely important that we are using ill-gotten gains sitting in big economies like ours for the right purposes, and they're not going back into the coffers of corrupt Russian actors. And it's that that I think we'll be focusing on.”

Describing much of Russian wealth in the UK as “dirty money swishing around London”, he said Labour would be calling for the repurposing of these assets. 

“The government at the moment has said ‘it's quite complicated, we're looking at it...'” Lammy said. “They haven't got a plan.”

Labour has also called for a special tribunal to hold Russian president Vladimir Putin and other Russian leaders criminally responsible for the war of aggression against Ukraine. 

As much of Ukraine has been devastated by mines and artillery, Lammy argued that it will require “something on the scale of a Marshall Plan” to rebuild the country, referring to a large-scale US programme of international aid to Europe following the Second World War. 

kherson destruction
A destroyed school is just one example of destruction in Kherson, which has been under heavy artillery fire (Alamy)

The shadow foreign secretary said working with international partners would be essential to delivering this, after telling PoliticsHome that rebuilding the UK's relationship with the EU would be the "number one priority" for Labour foreign policy.

Lammy sees the conference this week as an opportunity for the global community to start developing a plan for Ukrainian recovery together, and to look at the “legal framework” for seizing Russian assets.

However, this may be a complex endeavour: Lawyers have previously cited international human rights laws to prevent Russian oligarchs being sanctioned, including the right to a fair trial and the right to property under the European Convention on Human Rights (ECHR).

The question of exactly how assets could be seized and repurposed is legally complicated, but Conservative MP and former party leader Iain Duncan Smith believes it is “feasible to do it without any great legal changes”.

Duncan Smith, who has been a vocal proponent of repurposing Russian assets, told PoliticsHome he is in conversations with ministers and the prime minister “all the time” to discuss the issue.

“The government is hesitating because they're concerned about what precedent that sets with regards to monies coming in,” the senior Conservative MP said.

Duncan Smith said the worry was that if you seize assets, individuals and businesses from other countries around the world may be wary of putting their money in the UK. 

Despite limitations imposed by international law, he insisted that the “extenuating circumstances of the Russian war of aggression could allow these sanctions to be implemented. 

“I think they can do it under existing international law,” he said. 

“International law isn't set in concrete, it is feasible to make it flexible. And in this particular case, it will be possible because of extenuating circumstances to seize those monies.”

The former Conservative leader said that he would continue to press the government on this issue, and said he did not expect them to say anything new on assets at the Ukraine Recovery Conference: “The debates about the legal part of it are all still outstanding.”

Announcing the new government measures around Russian sanctions, Foreign Secretary James Cleverly said: "As Ukraine continues to defend itself against Russia’s invasion, the terrible impacts of Putin’s war are clear. Ukraine’s reconstruction needs are – and will be – immense.

"Through our new measures today, we’re strengthening the UK’s sanctions approach, affirming that the UK is prepared to use sanctions to ensure Russia pays to repair the country it has so recklessly attacked."

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