By Elizabeth Hearst for AMLi
As the Western world waits with bated breath on a potential Ukraine invasion by Russian military, American officials have revealed their fears of ineffective economic sanctions against Russia.
US State Department officials are believed to have expressed “dismay and frustration” at the British government’s perceived failure to tackle dirty Russian money sloshing around London.
“The fear is that Russian money is so entrenched in London now that the opportunity to use it as leverage against Putin could be lost,” one US diplomatic official was reported as telling The Times.
“Biden is talking about sanctioning Putin himself but that can only be symbolic. Putin doesn’t hold his money abroad, it is all in the kleptocrats’ names and a hell of a lot of it is sitting in houses in Knightsbridge and Belgravia right under [the UK] government’s noses,” said the source.
The UK’s uncomfortable Russian ties has resulted in its capital being branded the ‘London Laundromat’, with the UK government estimating that £100BN in illicit funds flows through the country each year.
In 2020, the hotly anticipated Russia Report of the British Intelligence and Security Committee of Parliament was published. It was a damning indictment of attempted Russian interference in the 2016 Brexit referendum.
The 50-page document revealed the government “had not seen or sought evidence of successful interference in UK democratic processes”, with government ministers reportedly turning a blind eye to allegations of Russian interference.
The Conservative party’s links to Russia prove alarming, with the Tories reportedly receiving a whopping £2M from donors with Russian links since Boris Johnson became PM in 2019.
Just last year it was revealed that one of the Conservative Party’s biggest donors was “secretly funded by a Russian oligarch with close ties to President Putin”, according to the BBC.
Lubrov Chernukhin, who’s husband is a former deputy minister of finance under Vladamir Putin donated £1.7M to the Conservative Party, giving her access to some of the most influential figures in UK politics.
For a donation of £135,000 Ms Chernukhin was invited to a ladies’ night dinner with former Prime Minister Theresa May and her cabinet in April 2019. In 2014, Ms Chernukhin paid £160,000 to play tennis with the then-Prime Minister David Cameron and current under-fire PM, Boris Johnson.
Last year, the Secretary of State for Northern Ireland, Brandon Lewis, who personally received £25,000 in a donation, as Tory chairman, defended donations linked to Russia.
Secretary Lewis said he believed donations were made because donors see “that a Conservative Party and a Conservative Prime Minister is the party that delivers for the United Kingdom, delivers for our economy and improves job offers.
Earlier this week, it was revealed that the UK had shelved its hotly anticipated Economic Crime Bill, which promised tougher laws on fraud and kleptocrats, as well as an ultimate beneficial ownership registry on property and enhanced oversight at Companies House.
Dr. Susan Hawley, Executive Director at Spotlight on Corruption blasted the decision and said that “not doing anything causes such damage to the public finances, but also to ordinary people who become victims of fraud, not to mention our reputation overseas as an absolute haven for kleptocrats and money launderers”.
Tensions have risen between the West and Russia following a build-up of over 100,000 Russian forces at the Ukrainian border. The move has resulted in high anxiety across Western powers, with officials scrambling to approve economic sanctions should Russia invade Ukraine.
This week, US President Joe Biden’s team briefed senior bankers at some of America’s biggest banks to prepare them for the threat of potential sanctions against Russia.
EU and US officials are believed to be toying with cutting Russia out of the international SWIFT payments system, and blocking the also-controversial Nord Stream 2 pipeline between Russia and Germany.
As tensions continue to rise, it appears the UK’s ‘cosy’ relationship with Russian oligarchs may prove detrimental to global efforts against Vladamir Putin.
Share this on:
Follow us on:
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
