Questions raised over time-lag on UK moves to sanction oligarchs

Liz Truss is facing mounting questions over why the Foreign Office will take “weeks and months” to sanction Russian oligarchs, with the UK lagging behind the US and EU after targeting just eight individuals with links to Vladmir Putin.

Rowena Mason www.theguardian.com 

The Foreign, Commonwealth & Development Office (FCDO) has for days been promising to target a “hit list” of oligarchs but refuses to say when the names will be ready, despite warnings from MPs that billionaires will already be taking their assets out of the country.

Senior Tory MPs have been growing increasingly frustrated by what they see as a lack of preparation on the part of the Foreign Office, with some having warned Truss months ago that the UK should be ready with a response against London-based oligarchs with links to Putin if Russia were to invade.

Labour also raised concern about “asset flight” by oligarchs who fear they may be hit by sanctions soon and worries that the UK is “off the pace” compared with the US and EU.

Priti Patel, the home secretary, claimed on Tuesday there were “legal reasons” for the time being taken, with officials trying to make sure sanctions are watertight against legal challenge.

Cabinet sources insisted the UK had been going further on hitting banks and financial operations with sanctions than other countries, with more than 120 entities targeted to date.

Asked whether more oligarchs would be blacklisted this week, a Foreign Office source said on Tuesday: “We will be sanctioning more oligarchs over the coming weeks and months.”

But David Davis, the Tory former Brexit secretary, said the financial industry sanctions “were not going to hit Putin where it hurts most”.

“We need to target many more of his allies and facilitators that have frankly bought their way into British society and that’s what’s really missing,” Davis said.

“We need to target those owning businesses on our stock exchange. We need to target those owning London homes that we can no longer afford because of Russian operations in London. We need to target oligarchs who own football clubs that many of our citizens can no longer afford to attend.”

He added: “I do worry about the government moving so slowly that its prey escapes it.”

In the House of Commons, Davis named Roman Abramovich, the Russian billionaire with property in London, saying “according to the Spanish national intelligence committee, he is one of the men who manages Putin’s business affairs. That is a really important issue about whether he should be on our target list.”

Abramovich, the Russian billionaire who recently passed stewardship of Chelsea FC to a charitable foundation, has vehemently disputed reportsalleging he is close to Putin or that he has done anything to merit sanctions.

Bob Seely, a Tory MP and member of the foreign affairs committee, said oligarchs needed to be under the spotlight as they were “not just obscenely rich people who are mates with someone” but part of the Kremlin’s “structure of control and power whether it is in east Ukraine or in the UK”.

The EU announced a list of sanctions against Russian businessmen on Monday night, including billionaires Mikhail Fridman and Petr Aven. They have vowed to contest the restrictions.

Fridman is a Ukrainian-born energy tycoon who owns AlfaBank with his partners, including Aven. He bought and still owns Athlone House in Highgate, north London, for £65m in cash in 2016, according to the Land Registry.

The billionaire, who is one of Russia’s richest men, controls private equity firm LetterOne, which owns Holland & Barrett. In a letter to his employees this week, he called for an end to the “bloodshed” in Ukraine and stated that “war can never be the answer”, without directly criticising Putin.

Others to be sanctioned by the EU, but not the UK, include Alexei Mordashov, a major shareholder in TUI, the London-listed travel company. Alisher Usmanov, who has sponsorship links to Everton, also had his assets frozen as part of sanctions imposed by the European Union in response to Russia’s invasion of Ukraine. The Uzbekistan-born billionaire’s USM Holdings sponsors Everton’s training ground, with an initial five-year deal announced in 2017.

Another Russian oligarch not sanctioned by the UK is Oleg Deripaska, who has been on the US sanctions list since 2018 over his alleged links to the Russian government, which he has taken legal action to challenge.

This week, Deripaska called for peace talks to begin “as fast as possible” in a post on the messaging app Telegram. “Peace is very important,” wrote Deripaska, who founded the Russian aluminium giant Rusal, in which he still owns a stake through shares in its London-listed parent company EN+ Group.

The British government strongly defended the sanctions it has already put in place. The Foreign Office source added: “Liz has been clear we have a hit list and we’ll be working our way through that as part of a rolling package. Nothing – and no one – is off the table.”

Robert Jenrick, another former Tory cabinet minister, also argued that the most important sanctions were those that have a “systemic impact on the Russian economy”.

He said parliament “should not be going down the rabbit hole of interest in individuals and oligarchs – important though that is – as that is not going to make a material difference in the short term”.

He added that many of those business people left Russia many years ago and are not currently close to Putin.

‘It’s about bloody time’: UK finally moves to block Russia’s ‘dirty money’ 

Britain has long been a haven for people of negotiable integrity to stash their cash, often via property deals made with the help of an army of lawyers, PR advisers and bankers.

By Lawrence Booth vervetimes.com 

Not only are super-mansions in London and the home counties a safe bet from an investment point of view, but the ability to disguise ownership via a labyrinthine network of shell companies offers a degree of anonymity to those who prefer their financial dealings to remain secret.

On top of that, the Companies House database – the repository for details of UK-registered businesses – has become almost a punchline to a pretty bad joke.

Information is often missing, incomplete or obviously fake. Directors have been registered in the name of Adolf Tooth Fairy Hitler and Judas Superadio Iskariot, without anyone batting an eyelid. Information can be hard to search for and the website crashes or times out on a regular basis.

On Monday, amid pressure to crack down on the billions of pounds in Russian “dirty money” flowing through London, the business secretary, Kwasi Kwarteng, brought forward measures designed to clean up the mess. They include a register of properties owned by overseas investors, in theory preventing them from disguising their identities.

“By legislating now, we’ll send a clear warning to those who have or are thinking about using the UK property market to launder ill-gotten gains,” Kwarteng said.

Companies House will also be “upgraded” to improve the quality of information available from its database and there will be measures to strengthen “unexplained wealth orders”, which give law enforcement bodies the power to seize assets where they suspect criminality may have occurred.

Long-time anti-corruption campaigners are relieved, if frustrated at how long it has taken Britain to relinquish its role as obsequious financial butler to what the business department now calls “corrupt elites”.

“It’s about bloody time,” said Susan Hawley, executive director of Spotlight on Corruption.

She said campaigners had “been waiting six years” for measures like these, ever since an anti-corruption summit in 2016, adding: “These measures are a good start but on their own will not be enough to plug the loopholes in our defences against dirty money.

“We need a massive investment in law enforcement capability so they can get on with investigating unexplained wealth, and with investigating and prosecuting money laundering breaches and sanctions evasion.”

Already, there is scepticism about whether the super-rich and super-nefarious will be able to flout the rules. For instance, while the “ultimate beneficial owner” of a property will have to be disclosed, that could still be a legal entity or a company. If that entity is itself in a jurisdiction that permits corporate secrecy, there will be no way to unravel the final links in the chain to the person at the very top.

Graham Barrow, of the Dark Money Files podcast, has consistently exposed some of the more ludicrous failings of Companies House to provide legitimate data. He pointed out that these rules are similar to those for “persons of significant control” disclosures that, in theory, tell you who owns a company.

“We know from experience that they can be circumvented by declaring that there is no one who meets the definition of a ‘beneficial owner’,” he said. “Whilst there are penalties for making a false declaration, knowing who is behind an entity in a location like the Marshall Islands, the Seychelles or BVI is not a straightforward task.

“Without adequate human and financial resources, along with cooperation from overseas territories, the requirements look difficult to enforce effectively”.

Hawley raised misgivings about measures to target those trying to evade sanctions, a hot-button topic as ministers target Russian oligarchs and Kremlin officials. “It isn’t clear that this bill goes far enough in giving law enforcement the real tools to bring criminal cases for sanction evasion,” she said. “There hasn’t been a criminal sanctions evasion case for over 12 years.”

Barrow also declared it “deeply disappointing” that the government was not acting faster. “Companies House continues to be abused on a daily basis and further delay simply opens the door to more and more criminals.”

One campaigner, who asked not to be named until he had spent more time analysing the detail, was more sanguine about the prospect of the financial chicanery that may go on as the corrupt and secretive hide their assets elsewhere in the period between the proposals being announced and implemented.

“The gate will be open for a while,” he said. “But I’d rather get a decent piece of legislation than try to pass it in three hours. We can’t turn back the clock. We are where we are.”

Tory peer Lord Moylan demands police ‘butt out’ of ‘farcical’ Partygate investigation

Tory peer Lord Moylan demands police ‘butt out’ of ‘farcical’ Partygate investigation saying Boris Johnson is being unfairly targeted for Covid rules ‘punishment’ usually reserved for ‘egregious acid house parties’ – as PM awaits his fate

  • Lord accused cops of treating the PM like the hosts of ‘acid house parties’
  • Peer was an adviser on transport to Mr Johnson when he was mayor of London
  • Senior politicians are awaiting the results of the Metropolitan Police probe 
  • Mr Johnson could be fined for breaking laws preventing social gatherings  

Details from the Daily Mail here

These remarks follow his derogatory comments about Yorkshire made in a recent tweet: