London’s monetary sector is below scrutiny over the rattling Russia report


The damn parliamentary report on Russian influence in Britain put the spotlight on London’s financial heartland. Politicians and heavyweights against money laundering called on city companies to examine business relationships with the Kremlin.

The 50-page report released on July 21 by Parliament’s Secret Service and Security Committee said accountants and lawyers were among the “enablers” in Britain who were “witty or unknowingly” de facto agents of the Russian State were.

Bill Browder, a well-known critic of Russian President Vladimir Putin, called on financial firms to conduct “thorough source checks.”

“The Russia report recognized the threat posed by enabling Russian interests in Britain. It has also identified the link between the Russian state and organized crime and highlighted the lack of effective prosecution of money laundering cases, ”the head of Hermitage Capital told FN.

“Financial firms should conduct thorough checks on the sources and recipients of funds associated with Russia,” added Browder, which is widely credited with creating the Magnitsky Act, which provides penalties for violations.

The long-awaited Parliamentary Report reads: “Successive UK governments welcomed oligarchs and their money with open arms, offering them the opportunity to recycle illicit funds through the London laundromat, as well as high-level links with access to UK businesses and political figures. “

London is not the place to launder Russian money, Transport Minister Grant Shapps said on Wednesday.

“It is very, very important that the good name of London, the city and the UK – when it comes to anti-money laundering legislation – is kept,” Shapps told the BBC.

“This is not the place to launder money,” Shapps said. “It’s not welcome.”

The UK’s National Crime Agency estimates that over £ 100 billion of illicit money hit the economy every year. More than a fifth of the £ 5 billion suspicious assets spent on UK property come from Russia, according to anti-corruption campaigners Transparency International UK.

Kevin Hollinrake, a Conservative MP who chairs the All Parliamentary Group on Fair Business Banking, noted that “most UK banks have been fined,” referring to Standard Chartered, issued by the Financial Conduct Authority last year Was fined £ 102 million. Money laundering violations. At the time, it was the second largest anti-money laundering fine ever imposed by the UK regulator.

In April, the UK Financial Sanctions Implementation Office fined Standard Chartered £ 20.4 million for violating Russian sanctions imposed by the European Union on Russia following the annexation of the Crimea Region of Ukraine in 2014 . The fine is the largest still imposed by the agency, which was created in 2016.

“These [report] is clearly unacceptable and requires further investigation, ”added Hollinrake.

“Existing corporate liability laws make it virtually impossible to prosecute banks for misconduct in the UK, including money laundering. Fines instead of criminal sanctions do not act as an effective deterrent. Real action is needed to prevent and facilitate UK businesses from committing economic crimes. “

Comment was requested from Standard Chartered.

Labor MP Margaret Hodge, a global advocate of transparency and accountability for accountants who help clients avoid taxes, said: “The politicians, tax advisors, lawyers, accountants and public relations firms that enable Russian influence in the UK to corrupt must be held accountable.

“The Russia report is utterly damaging to the approach of successive Tory governments to national security and corruption,” added Hodge. “You made it possible for our capital to become a ‘London laundromat’. Britain is now the preferred money laundering destination for all crooks and kleptocrats in the world. “

However, Ros Altmann, the former pension minister, rejected claims that London would become the money laundering capital of the world.

“The ISC report suggested this [money laundering capital of the world] is what London is known as, but that is difficult to judge. Due to the nature of such transactions, the figures for other countries are not publicly available. The UK has taken numerous safeguards and is constantly introducing new anti-money laundering measures, “she said.

Leading trading organizations for the accounting sector found that accountants and finance professionals are constantly at risk of criminal activity.

A spokesman for the Institute of Chartered Accountants in England and Wales added, “We work closely with and continuously work with law enforcement agencies to develop and apply the key financial and business indicators that auditors are used to identify and use across the UK economy can be identified report criminal activity. “

The Association of Chartered Certified Accountants said, “The publication of this report is a reminder to the profession to remember its role as a value creator and to always act in the public interest.”

A report published by Transparency International UK in October 2019 identified more than 400 cases of corruption worldwide involving UK service providers and funds of at least £ 325 billion that “through manipulated procurement, bribery, embezzlement and illicit acquisitions of government assets in 116 countries have been diverted ”. .

The organization found that 582 companies and individuals “have at some point been involved and provided services in the UK or its offshore financial centers”.

Duncan Hames, Director of Transparency International, said: “Those who fail to fulfill their anti-money laundering duties should be punished with sufficient resources by the regulators who have sufficient resources to prosecute monstrous criminals. Until that happens, the UK will continue to serve as a wash for Russia’s dirty money. “

To contact the authors of this story with feedback or news, email Penny Sukhraj, Shruti Tripathi Chopra, and Emily Horton