PARLIAMENTARY REPORT – RUSSIAN ‘DIRTY MONEY’ FLOWING THROUGH LONDON DAMAGES BRITAIN MOSCOW GOLD: RUSSIAN CORRUPTION IN THE UK

Reuters, and many other sources, reported on 21st May that, according to a Parliamentary committee, Russian money hidden in British assets and laundered through City of London financial institutions damages the government’s efforts to take a tough stance against Moscow’s aggressive foreign policy.  A report by the Foreign Affairs Committee said Russian money was undermining Britain’s criticism of Russia and supporting what it called a campaign by President Vladimir Putin “to subvert the international rules-based system”.  The committee chairman is quoted as saying that “the scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City”.  The committee said that the UK should work with international allies to make it more difficult for Russia to issue sovereign bonds, which are not subject to sanctions, via banks which are subject to sanctions, and more needed to be done domestically to tighten sanctions on individuals and at an international level to close loopholes that allow Russia to issue sovereign debt with the help of sanctioned entities.

https://uk.reuters.com/article/uk-britain-russia/russian-dirty-money-flowing-through-london-damages-britain-uk-lawmakers-idUKKCN1IL0WM?src=ilaw

The report of the Committee, “Moscow Gold: Russian Corruption in the UK”, is available at –

https://www.parliament.uk/business/committees/committees-a-z/commons-select/foreign-affairs-committee/news-parliament-2017/commonwealth-summit-report-published-17-19/?src=ilaw

Amongst the evidence given to the committee is the titbit that in Russia, one of the names for a shell company — one of the words people use — is “BVI”.  They just call them “BVIs” as shorthand.  The report also notes that the BVI was the first to introduce an accessible (though not public) register of beneficial ownership.  It introduced in 2017 a secure, non-public and technologically innovative search platform called BOSS (Beneficial Ownership Secure Search System).  BOSS is a central register of all persons who directly or indirectly own 25% or more of companies registered in the BVI or under BVI law and is accessible by competent authorities in the BVI and the UK.  However, companies registered elsewhere that own more than 25% of BVI-registered companies do not have to be included in the database.  Amongst the committee recommendations are that the Government should set out its plans for assisting the governments of the Overseas Territories to establish publicly accessible beneficial ownership registers before 31st December 2020.  It calls on the Government to provide the same level of assistance to the Crown Dependencies, and to encourage them to take steps to meet the same standard of transparency.

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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