Next year will see the British courts and police deploy new investigative powers against alleged dirty money in London, some of which helps Russia and its proxies to finance its aggression against Ukraine, U.K. lawmakers have told Kyiv Post.
John Whittingdale and Michael Fallon, both senior members of parliament from the governing Conservative party and former secretaries of state, said that Russian and Ukrainian oligarchs who use the city as a safe haven for money of shady origin and questionable legal purpose are set to become more vulnerable to U.K. investigators.
While Ukraine has been constantly told by its European partners to get corruption under control, little has been done, until now, by the European authorities in cracking down on dirty money that’s held in places like London, Paris and Cyprus.
London, frequently labelled the money laundering capital of the world by experts, has been a long-time haven for the post-Soviet super rich – but that could swiftly change if crusading politicians and judges get their way.
Unexplained wealth orders – designed to tackle corruption, organized crime and money laundering – were incorporated into U.K. criminal finance law in January 2018, but only began being issued in October when British police made their first arrest of a foreign national from Azerbaijan under the new powers.
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Lawmakers tackle dirty money
“I raised an urgent question in parliament on the actions by Russia in the Sea of Azov… and during that I asked the government to consider… personal sanctions against individuals who we know were involved, senior commanders, and secondly to match the American sanctions, because they’ve gone further than us,” said Whittingdale at an interview in Kyiv on Dec. 23.
“And the other area where Britain can and should do more, is in terms of the money held in the City of London – we have begun now, to take action against individuals who have very substantial assets in London where they are unable to explain how those assets were acquired, and we know there are a number of Russians in that category… and possibly Ukrainians… we need to take action against dirty money in London.”
Michael Fallon, U.K. secretary of defense from 2014 until 2017 who launched Britain’s military and defense assistance program to Ukraine, said it will be a vital step in countering Russia’s hybrid aggression and helping Ukraine to tackle its problem with corruption and toxic money.
“It’s important of course, because some of that money is clearly getting back to help reinforce the military in Russia,” Fallon said. “I was disappointed when we simply rolled over the sanctions, I think we ought to be looking at these things all over again, because if you don’t, this kind of behaviour simply becomes the norm.”
“It has to be done properly, and through the legal process… but there is an expectation that the government will start to take action,” Whittingdale said.
“Where individuals, they may come from Ukraine or they they may come from Russia, or they may come from the Far East, where they have substantial assets and it’s not possible to provide an explanation as to how they were legally acquired, then our law now permits those assets to be frozen,” he added.
Investigating the oligarchs
It’s uncharted legal ground for the United Kingdom, which has faced frequent criticism for not taking enough action as dirty money has saturated its capital city as some Russian and Ukrainian oligarchs have made England their second home.
For the courts too, it’s a new situation without precedent. For the first time, alleged criminals will be told by investigators to prove that they are innocent and their money is clean, as opposed to the authorities holding a burden of proof.
Under the new laws, if a person is unable to explain the origin of their wealth, and show that it wasn’t obtained through crime, sanctioned activities or corruption, the National Crime Agency, or NCA – Britain’s version of the Federal Bureau of Investigation, or FBI – can appeal to the courts for asset seizures and criminal prosecution.
Hanna Hopko, Ukrainian member of parliament and head of the committee on foreign affairs of Ukraine’s Verkhovna Rada, told Kyiv Post that it was right for the United Kingdom to take such action and called on Ukraine’s European allies to do more in aiding Ukraine as it tackles the corrosive influence of corrupt oligarchs.
She also said that Ukrainian businessmen with shady, criminal connections still find it too easy to find refuge in European capitals and cited London as an example.
“There is a double standard,” she said. “When Ukraine is constantly being told to tackle corruption.”
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