“Those in and around the Kremlin will have nowhere to hide,” the foreign secretary, Liz Truss, told the Commons on Monday, promising new legislation to impose sanctions on those with links to the Russian government should it invade Ukraine. It would be applicable to any company (and its owners) with ties to the Russian state and of economic significance to it – extending well beyond the existing sanctions regime, which covers only those linked to the destabilisation of Ukraine.
The Kremlin says that it does not want war, but with more than 100,000 troops near the borders of Ukraine, and more arriving in Belarus, fear is growing of a major land offensive or – as Kyiv suspects – longer-term destabilisation and a continuing hybrid assault using cyber-attacks, sabotage and other means. While diplomacy continues, there is no sign of progress. Vladimir Putin says that Russia’s proposals have been ignored. The US succeeded in forcing a UN security council debate, with Moscow responding by warning that Ukraine may “destroy itself” if it undermines existing peace agreements. On Tuesday, Boris Johnson flew to Kyiv to show support, Monday’s attempt to play international statesman having been hobbled when he had to cancel a phone call with the Russian president to address MPs about the Sue Gray report. Standing next to the Ukrainian president, Volodymyr Zelenskiy, he warned that a Russian invasion would be a disaster.
These matters could hardly be more serious. Yet Ms Truss’s ringing declaration that the UK would get tough on Russian money earned laughter from MPs. “Londongrad” is notorious as a destination and conduit for the assets of the super-rich around Mr Putin, to the frustration of the US and others. The Center for American Progress warned last week that “uprooting Kremlin-linked oligarchs will be a challenge, given the close ties between Russian money and the United Kingdom’s ruling Conservative party, the press, and its real estate and financial industry”.
Writing in the Guardian, the Scottish first minister, Nicola Sturgeon, warned that government inaction on Russian wealth had contributed to Mr Putin’s sense of impunity. Even after the Salisbury poisoning, when the rhetoric sharpened, little changed in reality. There is increasing anger, including among Conservatives, that there is still no sign of the economic crime bill, which would include long-promised measures such as reform of Companies House, a register of properties held by overseas citizens and a public register of beneficial ownership in the British overseas territories. All these are necessary and desirable, and not only with regard to Russia.
Legislation, however, is not enough. Unexplained wealth orders have proved much harder to use than had been hoped. It is unclear how widely or well new anti-corruption regulations will be used when there seems to be so little interest in a clean-up at senior political levels. Still less is it clear that targeting Russian money will help protect Ukraine. The optimistic take is that it at least gives those around Mr Putin an incentive to encourage moderation. But London is not the only destination for Russian cash, however convenient and attractive, and Mr Putin is unlikely to feel bound by the priorities of oligarchs who have prospered richly from his reign. The real reason to crack down on tainted money from Moscow and elsewhere is because it is the right thing to do – and should have been done long ago.
