Ministers must ramp up efforts to stop flow of Russian ‘dirty money’ to Britain, say MPs
MPs have accused the Government of a “business as usual” approach to criminality by Kremlin-linked oligarchs in the UK despite promises of a major crackdown following the Salisbury attack.
The Foreign Affairs Committee said ministers must show “stronger leadership” and design a strategy that links the diplomatic, military and financial tools that can be used to take on Russian state aggression.
It comes amid rising tensions between Moscow and the West, after Britain and its allies pinned the blame on Moscow for the attempted murder of ex-spy Sergei Skripal, and his daughter Yulia in Salisbury.
But MPs say despite “strong rhetoric” from Theresa May and Boris Johnson, allies of President Putin have continued to hide and launder their “corrupt assets” in London.
Their report, titled "Moscow’s Gold: Russian Corruption in the UK" says that today's oligarchs “owe their wealth to the President” and act, in exchange, as "a source of private finance" for the Kremlin.
The committee said: “There is a direct relationship between this wealth and the ability of President Putin to execute his aggressive foreign policy and domestic agenda."
The group say the Government must make taking on the issue a “a major UK foreign policy”, by boosting resources for law enforcement agencies while improving mechanisms for information sharing.
Failure to strengthen the rules "has clear implications for our national security” and makes the UK look as if it is “not serious” about tackling the issue, they add.
They say that the Government must tighten and close gaps in the sanctions regime when major Russian firms “whose markets dominate the financial world" are allowed to float on the London Stock Exchange, and to work with the G7.
The recommendations come weeks after MPs from across the House backed a Magnitsky-style amendment to the Sanctions and Anti-Money Laundering Bill.
The legislation is still going through parliament but is set to mirror the laws brought in by the US in 2012, which bolstered their power to sanction and freeze the assets of those who are suspected as involved in corruption.
The committee adds that Britain holds “significant leverage” in taking on the issue as a G7 member, while calling on ministers to boost cooperation with the United States and European Union.
Chair of the committee, Tom Tugendhat said the recommendations would "hit Kremlin-linked individuals in their pockets" while "levering pressure on the regime".
“The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transaction in the City," he said.
“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.
"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."
Elsewhere the group criticise the “regrettable” delay in bringing in legislation to establish a register of ownership for overseas companies that own property in the UK.
And the group call on ministers to respond to the report with how they plan to help Overseas Territories establish publicly accessible beneficial ownership registers before 31 December 2020.