A Crackdown On Russian Money

Vladimir Putin is often portrayed in the press as a wily manipulator who always gets his way, but lately, the Kremlin’s schemes are backfiring. His meddling in the 2016 U.S. election has created a bipartisan American backlash, and the March attack with a nerve agent in Salisbury, England, is now producing a cross-party British call for a crackdown on Russian money sheltering in London. On Monday an 11-member committee of the House of Commons issued a report that must have Russian oligarchs worried about where they can safely put their money. The report—“Moscow’s Gold: Russian Corruption in the UK”—pulls back the political veil about the extent that London has become a haven for the loot Mr Putin’s billionaire cronies have taken out of Moscow. As the report notes, “The contemporary oligarchs owe their wealth to the President and act, in exchange, as a source of private finance for the Kremlin.” In April the Trump Administration sanctioned several in Mr Putin’s inner circle, including industrial tycoon Oleg Deripaska, for exactly this reason. But the U.K. government has long been more circumspect, perhaps because of the many Londoners who benefit from Russian business.

Maybe not anymore. The report notes that the government “responded robustly” to the nerve-agent attack on former spy Sergei Skripal and his daughter in March. “But despite the strong rhetoric, President Putin and his allies have been able to continue ‘business as usual’ by hiding and laundering their corrupt assets in London,” the committee writes. The Kremlin can then call on that money “at any time” to “support President Putin’s campaign to subvert the international rules-based system.” This is welcome candour, not least because it comes from MPs in the Tory, Labour and Scottish National parties led by Tory MP Tom Tugendhat. Theresa May’s government recently declined to renew Russian oligarch Roman Abramovich’s visa. But the MPs want to do more, noting that “the size of London’s financial markets and their importance to Russian investors gives the UK considerable leverage over the Kremlin.” They suggest tightening financial regulation to prevent sanctioned companies from raising funds in London, creating an ownership registry for overseas companies investing in Britain, tackling money laundering in British territories, and publishing a list of Russian human-rights violators, among other measures.

Perhaps most significant, they recommend that the U.K. “sanction more Kremlin-connected individuals” under the authority in the Sanctions and Anti-Money Laundering Bill that passed Parliament this week. The law is a broad national-security tool and can also serve as a British version of the U.S. Magnitsky Act that has allowed the U.S. Treasury to sanction Kremlin oligarchs. Meanwhile, on Thursday Australia and the Netherlands formally named Russia as the culprit that downed Malaysia Airlines Flight 17, killing 298 innocents in 2014. Investigators from Australia, Belgium, Ukraine, Malaysia and the Netherlands—which lost the majority of people in the shootdown—said they’re “convinced” based on “extensive comparative research” that the Buk missile used to down MH-17 originated from a Russian Army anti-aircraft brigade in Kursk, Russia. The Kremlin still denies all responsibility, but the MH-17 news is further evidence that the U.K. and other free nations are right to follow and sanction the money of Mr Putin’s Kremlin coterie.

Credit: The Editorial Board of The Wall Street Journal, 25 May 2018.