WHAT CRACKDOWN? Pledged blitz on UK 'Russian dirty money' fails to happen nearly two years a
A GOVERNMENT crackdown on so called Russian "McMafia dirty money" announced in the wake of the Skripal attacks more than 18 months ago has been branded "woefully inadequate" by experts. The attack came after it emerged that new powers, which can force suspected money launderers to explain the source of the wealth, have not been used in connection with any Russian nationals as previously pledged by the Tory Government. The revelation has heaped more pressure on Downing Street to publish the controversial cross-party intelligence and security committee report on Kremlin meddling in Britain, which is said to include details of several wealthy Russians who have donated to the Tory party, which is still not out even after last month's General Election.
It was cleared for release by the Security Committee before the General Election, but Prime Minister Boris Johnson blocked its release ahead of the vote, and there has been no sign of it since.
BLOCKED: Boris Johnson stopped the release of report before election (Boris Johnson/Twitter)
This is despite the committee posting the following on the Parliamentary website on December 17: "On December 13 No. 10 wrote to the committee secretariat to notify it that the Prime Minister has now confirmed that there is no material in the committee's Russia Report which, if published, would be prejudicial to the discharge of the functions of the security and intelligence agencies, and that therefore the report may be published once the new committee is appointed." In March 2018 Sergei, 68, and Yulia, 35, Skripal were found unconscious in Salisbury following a Novichok nerve gas attack, which the British Government claimed was carried out on the orders of Russian President Vladimir Putin. Our Government immediately grabbed headlines with claims a steady stream of Russian money, thought to be linked to the Kremlin, was flowing in to buy luxury properties in London through cronies of Mr Putin, who vehemently denied being behind the attacks.
TARGETS: Yulia (left) and Sergei (right) Skripal were attacked in March 2018 (Facebook)
Former Prime Minister Theresa May and her Security Minister Ben Wallace said the new unexplained wealth order, which came into force in 2018, would be used to force Oligarchs to explain how they were able to fund purchases of multi-million pound properties across London and the south east. NCA Sources said at the time that there were around 130 potential UWOs in the pipeline and at least 70 per cent (91) were Russia-related. UWOs were even dubbed the "McMafia Law," after the BBC drama about Kremlin-backed crime lords operating in London, due to the Government's repeated insistence a major clean up of Russian dirty money was about to begin. However, the NCA has confirmed that in the past 18 months it has applied for just four UWOs, and none of them concern Russian nationals.
DRAMA: The UWO was dubbed the McMafia Law after the popular BBC show (BBC)
Other agencies that can issue UWOs are HMRC, The Serious Fraud Office, the Financial Conduct Authority and the CPS, however, none of them have made any such applications. In the wake of the Skripal attacks, the Foreign Affairs Committee carried out an inquiry into "Russian Corruption and the UK," which heard claims that many "Russian oligarchs were money launderers and presented a clear and imminent threat to the UK from their activities." It welcomed the Government's apparent "robust" response to Salisbury at the time and recommended the "UK sets out a coherent and pro-active strategy on Russia, led by the Foreign and Commonwealth Office and co-ordinated across the whole of Government, to counter Russian state aggression." The Government response, published in September, said it was "committed to countering Russian state malign activity and protecting the UK and our interests." It said it had introduced a number of measures to "tackle illicit funds, including unexplained wealth orders." Roman Borisovich, a Russian anti-corruption expert, told the inquiry how Russian oligarchs made their fortunes from dealings with the Russian state and many remained loyal agents of the KGB, but contributed little to the UK economy outside of investing in lavish properties.
VISA: Roman Abramovich was the only real Russian casualty of the Skripal aftermath (BBC)
He said: "The only action the Government seems to have taken is the rejection of Roman Abramovich’s visa. "By selecting a prominent Kremlin stooge who pioneered the Russian settlement on the Thames, the Government had the right target in its sights, but the action was only a warning shot. "A very loud one but never followed by a salvo of cannons. It had an effect of a firecracker during a pub brawl – the thugs stopped for a split second and instantly continued their ugly business. "The stifling absence of action from the Government against the Russian money laundering and meddling, especially after the introduction of the Unexplained Wealth Orders, was always attributed to the lack of political will. "However, after the PM’s blunt refusal to publish the ISC report on Russia, it is becoming clear that there are deeper nefarious reasons for the inaction. "The more the Cabinet tries to suppress the evidence, the louder the investigation will be, the more shocking results it will reveal." Oliver Bullough, a money laundering investigator who also gave evidence to the inquiry, said: "This was quite a priority for David Cameron, but I don't think Theresa May or Boris Johnson have been interested. The political impetus has gone out of it and enforcement officers are frustrated at the lack of resources.
WHAT CRACKDOWN? Theresa May announced new power but had 'no real interest' (Theresa May/Twitter)
"To be fair to the committee, it felt it was doing its bit to push the issue. There was a lot of talk at the time, but the Government has not done its bit and its response is pretty inadequate as this is a major threat to the economy and politics. "Salisbury could have been a major point to tackle this, but it has been allowed to pass. The National Economic Crime Unit's resources are feeble, when they are up against the most sophisticated criminals in the world." Russian oligarchs, who are wanted back home on suspicion of involvement in major frauds, are also still being protected by courts in the UK. In October Judge Emma Arbuthnot, sitting at Westminster Magistrates Court, refused to extradite Alexander Zmikhnovskiy, 54, to Russia to face charges of involvement in a £44.8 million embezzlement fraud against the Russian Ministry of Defence. This was despite the judge believing there was a strong case of fraud against him. However, she felt he would still not get a safe trial so he is allowed to remain in the UK.
While in London, Mr Zmikhnovskiy, who denied the charges, was a director of Purecom Entertainment International Limited, set up with the late TV producer Justin Bodle as an investment vehicle. It went into liquidation in May 2018, with creditors owed nearly £5.3 million. The lion's share was owed to an offshore company and the Zmikhnovskiy family.
In December Judge Arbuthnot also refused to extradite Dimitry Smychkovsky, 49, who is living in London, to face fraud and bribery charges, despite his connections to top echelons of the Russian mafia, because of concerns of ill treatment in Russia.
HAPPIER TIMES: Georgy Bedzhamov with Vladimir Putin before he fled to Britain (Kremlin)
Another oligarch currently fighting extradition from London to Russia is Georgy Bedzhamov, 56, who is wanted in Russia on fraud charges in connection with the failure of Vneshprombank in 2016. The former Putin ally, who used to run the Russian Bobsleigh Federation and denies the charges, believes he could be killed in a Skripal-style attack, and in November the High Court, which has frozen his assets at the request of Russia, agreed to increase his monthly spending limit to £161,000 so he can beef up security. The NCA and Home Office refused to say why no UWOs had been used against Russians following the alleged crackdown's launch.
Mick Gallagher, head of the Met Police Serious Crime Command, said the use of UWOs was likley to increase in 2020 against a number of targets.