A new highly critical report says the British government is allowing “dirty money” from Russia to flow through the United Kingdom.
The House of Commons Foreign Affairs Committee said government complacency and a failure from ministers to take effective action meant Russian assets are being “laundered” through London, and then being used to finance Vladimir Putin’s war chest.
The scathing report blamed the leadership of the Foreign, Commonwealth and Development Office (FDCO) for “inadequate preparation and foresight”, which meant that the government was slow to impose sanctions.
The report said it was “shameful” that it took Russia’s unprovoked war against Ukraine for ministers to introduce the Economic Crime (Transparency and Enforcement) Act 2022. The new law is intended to prevent corrupt funds from being laundered through the UK property market.
The report says, however, that the measures do not go far enough or fast enough. It also says that it does too little to address the “fundamental mismatch” between the resources available to law enforcement agencies and individuals being targeted.
Russians now believe that the UK is a “safe haven” for “corrupt wealth,” the report concluded.
“The government’s unwillingness to bring forward legislation to stem the flow of dirty money is likely to have contributed to the belief in Russia that the UK is a safe haven for corrupt wealth,” the report said.
The report said that ministers “have spoken eloquently” in the House about needing to clamp down, but the “rhetoric has not been matched by constructive action.”
While the British government has threatened severe sanctions against Russia, the committee says the punishments are both underprepared, and under-resourced.
The report called for the British government to bring in legislation that is in-line with the morals of Britain, and close the loopholes that allow for exploitation.