Countering Russian Aggression and Tackling Illicit Finance — House of Commons, 2022-02-23
Topic: International Affairs
Stewart Hosie (Scottish National Party, Centre-left): May I make an observation before I start properly? The Minister for Asia and the Middle East, the right hon. Member for Cannock Chase (Amanda Milling), appeared to suggest earlier that, in the event of further Russian aggression, there would be tougher sanctions. That mirrors the prime ministerial statement that Madam Deputy Speaker read out earlier. However, in the debate on sanctions last night, the Minister for Europe and North America, the right hon. and gallant Member for Braintree (James Cleverly), said that there would be tougher sanctions as a result of what Russia "has already done". Those two things are not the same. They may just have been slips of the tongue, but what we cannot have is confusion added to the delay, the dither and what many consider to be an already inadequate response. I would add—I think this rather mirrored the mood yesterday and I suspect mirrors the mood today—that Russia has already invaded and annexed a sovereign state. We do not have to wait until the tanks encircle Kyiv in order to take the necessary sanction action, which it is possible to do I very much welcome and support the motion we are debating today. I am glad that it refers to the Intelligence and Security Committee’s Russia report. I had a hand in that report and I am very proud of it. I shall refer to only three paragraphs—all on Russian expatriates. The part entitled "Welcoming oligarchs with open arms" ties in directly to the question of what we do about dirty money. Paragraph 49 begins: "Whilst the Russian elite have developed ties with a number of countries in recent years, it would appear that the UK has been viewed as a particularly favourable destination for Russian oligarchs and their money. It is widely recognised that the key to London’s appeal was the exploitation of the UK’s investor visa scheme, introduced in 1994,"— almost 30 years ago— "followed by the promotion of a light and limited touch to regulation, with London’s strong capital and housing markets offering sound investment opportunities." One could easily read that last half-sentence as, "excellent opportunities to launder dirty cash," because that is precisely what happened Paragraph 50 goes on to explain that the UK offered "ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’. The money was also invested in extending patronage and building influence across a wide sphere of the British establishment—PR firms, charities, political interests, academia and cultural institutions were all willing beneficiaries of Russian money, contributing to a ‘reputation laundering’ process." It was not simply the money that the first generation of oligarchs managed to seize with Yeltsin’s privatisations, but everything that has gone on since then—a "reputation laundering" process That leads us to the preposterous situation my hon. Friend the Member for Glasgow Central (Alison Thewliss) referred to earlier. When the Foreign Secretary was asked about £2 million of donations to the Tory party—including, the report said, to the Deputy Prime Minister and the Chancellor of the Exchequer—she said that those donors are "part of the British political system", as if accepting donations of that sort of money was normal. It is not. No matter how many times it has been laundered or how many assets have been purchased and sold and purchased and sold to clean the cash, it is still dirty cash I understand perfectly well why a donor would wish to offer money to a political party—it buys them political influence—but I am at a bit of a loss to understand why any political party would accept such money. It does not make that party part of a normal political process; it makes it part of a racket The report went on to say that "there are a lot of Russians with very close links to Putin who are well integrated into the UK business and social scene, and accepted because of their wealth. This level of integration—in ‘Londongrad’ in particular—means that any measures now being taken by the Government are not preventative but rather constitute damage limitation." As the hon. Member for Wallasey (Dame Angela Eagle) said earlier, this report was published in July 2020, almost two years ago. Much of the evidence is a year or two older still, and the issue of dirty money predates that. We all know what is going on. The idea that we have to debate this as part of an Opposition day, rather than actively considering the various pieces of legislation that are necessary, is quite shameful. We have spent enough time on partygate and being ambushed by cake, but when it comes to billions of pounds of stolen cash sloshing about London, we have to talk about it on an Opposition day. That is frankly a disgrace That section of the report went on to say: "It is not just the oligarchs either: the arrival of Russian money resulted in a growth industry of enablers—individuals and organisations who manage and lobby for the Russian elite in the UK. Lawyers, accountants, estate agents and PR professionals have played a role, wittingly or unwittingly, in the extension of Russian influence which is often linked to promoting the nefarious interests of the Russian state. A large private security industry has developed in the UK to service the needs of the Russian elite, in which British companies protect the oligarchs and their families, seek kompromat on competitors, and on occasion help launder money through offshore shell companies and fabricate ‘due diligence’ reports, while lawyers provide litigation support. William Browder"— the head of the global Magnitsky justice movement— "told the Committee that: ‘Russian state interests, working in conjunction with and through criminal private interests, set up a "buffer" of Westerners who become de facto Russian state agents, many unwittingly, but others with a reason to know exactly what they are doing and for whom. As a result, UK actors have to deal with Russian criminal interests masked as state interests, and Russian state interests masked by their Western agents.’" I will conclude by saying that I can think of no stronger justification for the immediate introduction of an economic crime Bill, an overseas entities Bill and the register of beneficial ownership.