London is tightening the screws to Russian investors

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Лондон закручивает гайки российским инвесторам

The British government must eliminate “gaps” in the sanctions regime against Russia. This is one of the main recommendations contained in the report of the members of Parliament about the Russian corruption.

In the list of the richest people in the UK, annually compiled by the Times newspaper, traditionally, are two Russian businessman Roman Abramovich and Alisher Usmanov. This year, the owner of English football club “Chelsea” was in 13th place out of 19: as Abramovich edition was estimated at 9.3 billion pounds (12.5 billion dollars). Usmanov, who owns 30 percent of another British football club, Arsenal, took 8th place with a fortune of 10.6 billion pounds (14.2 billion dollars).

Among Russian businessmen, who have large assets in the UK, there are other well-known names. Oleg Deripaska, for example, belongs to sobreseimiento of $ 80 million in the heart of London – Belgravia.

The so-called Russian oligarchs for many years invested in the UK, as until recently it authorities themselves encouraged them to do so, stated in a report published this week the report of the Committee of the British Parliament on foreign Affairs. But soon the wealthy Russians may be difficult to invest in the country. This will happen if the British government will follow the report’s recommendations and will toughen policy towards Russian investments.

How much Russian money in the UK?

The document consists of 34 pages, is called “Moscow gold: Russian corruption in the UK.” To make recommendations to the government parliamentary Committee for foreign Affairs interviewed renowned experts on Russia, journalists and anti-corruption activists. Among those who orally or in writing answered the questions of the parliamentarians, was the ally of opposition leader Alexei Navalny and Executive Director of its Fund of struggle against corruption Vladimir Ashurkov, a British historian and expert on the security mark Galeotti, a former world chess champion and current human rights activist Garry Kasparov and the Guardian journalist Luke Harding.

According to Ashurkov, which are listed in the document “the UK is a natural magnet for Russians.” He cited calculations showing that in the past 20 years in the country “settled” about 100 billion pounds of Russian investments. “Most of this money is legitimate, he believes. – I think only part of them is the proceeds of corruption and criminal activities.” However, the widespread opinion is that associated with the Kremlin oligarchs often use the British financial system to hide their assets or to launder income earned in Russia illegally, said Luke Harding.

“The fact that people related to the Kremlin, using London as a base for criminally derived assets is clearly linked to the wider strategy of Russia and has implications for our national security, – concluded the authors of the report. – This confrontation should be the main priority of international policy of great Britain.” They also pointed out that “the accumulated and legalized in the UK, the assets of directly and indirectly supporting the campaign of President Putin” the collapse of the world order and influence on the allies of great Britain.

“Eliminate the gaps” in the sanctions regime

To prevent this, the parliamentarians proposed to revise the policy of London against Russian investment. In their opinion, the UK authorities should, in particular, actively to counter money laundering and to eliminate loopholes in the sanctions regime that allows the Russian businessmen to invest in the country, contrary to the imposed against Russia sanctions.

The government should “as soon as possible to eliminate gaps” in the sanctions regime, according to the Committee on foreign Affairs. One of the report’s examples of inconsistency of the sanctions policy of London against Russia is held in November of last year an initial public offering (IPO) on the London stock exchange of the shares of the company En+, which at the time was controlled by Oleg Deripaska.

During the IPO, Deripaska was not yet under US sanctions imposed photolike in January 2018, but its proximity to the Kremlin was known then, and noted in the report. The document also stated that, in February this year, British and American intelligence agencies “expressed concern” about the placement of En+. “What is the meaning to impose sanctions on Russia if the Russians can overtake them in the UK?” – quoted in the report, an unnamed us official who gave an interview to the newspaper The Telegraph.

What is the weakness of sanctions against Russia?

A second example of inconsistent policy of the British mentioned in the report, is Russia’s ability to borrow money on European financial markets, as Western incline apply to the Russian debt.

“This is the main weakness of the global sanctioning regime, as the Kremlin is using the funds received from issue of debt, for loans sanctioned banks,” – says researcher of Harvard University Emile Simpson, speaking before members of the Committee.

The British authorities should cooperate with the EU and the United States to discourage the purchase of Russian bonds, which organize sanctioned company, recommend parliamentarians.

A tool to influence the Kremlin

The final part of the report on measures to combat money laundering. In it the members of the Committee on foreign Affairs recommended that the government develop a plan to assist the authorities of the overseas territories to establish, by the end of 2020, the register of beneficiaries of offshore companies. In early may, the UK Parliament adopted an amendment according to which its offshore territories, such as Cayman and the British virgin Islands, will have to disclose information about the true owners of offshore companies.

“The UK needs to develop a coherent and proactive strategy against Russia, – summarized in the report of the Committee on foreign Affairs. – The size of London’s financial markets and their significance for Russian investors gives the UK a significant tool of influence on the Kremlin.”

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