For all its tough rhetoric against Russia, the UK government is failing to follow through on its promises to clean up dirty foreign funds, according to a hard-hitting report by MPs on Thursday.
It was “shameful” that after years of warning, the government only began to crack down on the illegal flows when Russia invaded Ukraine in February, according to the report of the House of Commons Foreign Affairs Committee.
The government has enacted new legislation to prevent corrupt funds from being laundered through the UK property market.
But it has failed to back it up with enough resources or powers for anti-corruption agencies like the National Crime Agency and the Serious Fraud Office, the report said.
“Without the necessary funds and resources, law enforcement agencies are toothless,” it said.
“The threat that illicit finance poses to our national security requires a response that is viewed as serious.”
Wealthy Russians have long found it easy to acquire expensive property in London, or a world-class education for their children in British private schools, or control of Premier League football clubs.
According to several studies of the “Londongrad” phenomenon, they were made possible by a service industry that included world-class bankers, accountants, lawyers, real estate agents, and public relations consultants.
And since Prime Minister Boris Johnson moved to Downing Street in 2019, his Conservative Party has stepped up efforts to attract wealthy donors, including from wealthy donors originally from Russia.
After invading Ukraine, Johnson’s government has sanctioned dozens of wealthy Russians with ties to the Kremlin, saying their money is no longer welcome in Britain.
However, according to MEPs, “corrupt money continued to flow into the UK”.
The committee called on the government to publish a report on a “golden visa” scheme that has allowed thousands of Russians to gain residency or even citizenship in Britain since the 1990s.
The program only ended the week before Russia invaded Ukraine, and the report demanded to know what the government planned to do with Russians who were granted visas “without due diligence”.
One of the beneficiaries of the scheme was sanctioned oligarch Roman Abramovich, who was forced to sell Chelsea football club.
Johnson, meanwhile, refuses to release intelligence advice he received about his controversial appointment of Evgeny Lebedev, a Russian-born newspaper baron, to the House of Lords.
“Britain’s status as a safe haven for dirty money is a disgrace to our reputation,” said Conservative Foreign Affairs Committee chair Tom Tugendhat.
“The Government must bring legislation in line with the morality of the British people and close the loopholes that allow such widespread exploitation,” he said.
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