US issues warning over Russian ‘dirty money’ in the UK

American diplomats have expressed fears that any sanctions imposed on Russia over potential conflict in Ukraine would ultimately be ineffective due to the amount of Russian wealth in London.

The US, UK and a host of other NATO countries have promised to impose harsh sanctions on Russia should President Vladimir Putin proceed with an invasion of neighbouring Ukraine, and have delivered arms shipments to bolster Ukrainian forces. 

But US authorities are now concerned that Britain’s threats to levy tough economic penalties against Putin are empty after years of allowing Russian kleptocrats to funnel what sources described as ‘a hell of a lot of money’ into ‘Londongrad’.

‘The fear is that Russian money is so entrenched in London now that the opportunity to use it as leverage against Putin could be lost,’ a source in Washington told The Times.

‘Biden is talking about sanctioning Putin himself but that can only be symbolic’, the source asserted, claiming that billions in Russian cash is ‘sitting in houses in Knightsbridge and Belgravia right under your government’s noses.’

It comes after a report by the Parliamentary Intelligence and Security Committee (ISC) in 2020 made damning claims that the capital was being used as a ‘laundromat’ for oligarchs’ money which had bought a ‘new normal’ of Russian influence in the UK.

A source in Washington told The Times that US diplomatic fear sanctions against Russian President Vladimir Putin (pictured) over a potential invasion of Ukraine would be ineffective because so much money from Russian elites has been allowed into the UK

But US authorities are now concerned that Britain’s threats to levy tough economic penalties against Putin are empty after years of allowing Russian kleptocrats to funnel what sources described as ‘a hell of a lot of money’ into ‘Londongrad’ (pictured: US President Joe Biden and Boris Johnson, Oct 2021)

It comes after a report by the Parliamentary Intelligence and Security Committee (ISC) in 2020 made damning claims that the capital was being used as a ‘laundromat’ for oligarchs’ money which had bought a ‘new normal’ of Russian influence in the UK

Establishing an accurate estimate for the amount of Russian money in London is extremely difficult, as the overwhelming majority of Russian funds invested in Britain enter the country via offshore accounts in various other countries.

But the ISC report found that Russian money has been flowing into the UK since the 90s, with investor schemes and relaxed regulations providing ideal conditions for kleptocrats to funnel tens if not hundreds of billions of pounds into the economy in return for a great deal of influence.  

The committee said ‘few questions if any were asked about the provenance of this considerable wealth’, and that ‘several members of the Russian elite are identified as being involved with charitable and/or political organisations in the UK, having donated to political parties, which positions them to assist Russian influence operations.’

There are now fears that the Government has left it too late to act, and are now unable – or perhaps even unwilling – to separate legitimate Russian investments from financial ploys for influence, despite Boris Johnson’s claims his government will ‘go after illicit finance and criminals who abuse our corporate structures’

‘Biden is talking about sanctioning Putin himself but that can only be symbolic’, the source asserted, claiming that billions in Russian cash is ‘sitting in houses in Knightsbridge and Belgravia right under your government’s noses,’ a Washington source told the Times (President Biden pictured)

There are now fears that the Government has left it too late to act, and are now unable – or perhaps even unwilling – to separate legitimate Russian investments from financial ploys for influence.

Boris Johnson declared as recently as last month that his government would go after ‘illicit finance that undermines democracy everywhere’ and ‘criminals who abuse our corporate structures’. 

But the unsettling statement from the Washington diplomatic source comes after Tory party anti-corruption head John Penrose on Tuesday said the Government had delayed an economic crime bill which would have prevented Russian elites from buying up property and making investments in London via offshore accounts.

Penrose’s accusations followed a day after junior minister Lord Agnew resigned due to the Government’s ‘foolish’ decision to push the bill back until the next parliamentary year.

Chair of the parliamentary Foreign Affairs committee Tom Tugendhat also expressed concern, declaring that ‘protecting Britain means protecting us from foreign corruptions. 

‘We shouldn’t need the US to call it out.’ 

Though the US is concerned about the efficacy of any sanctions brought against Russia by the UK, the Government has appeared willing to offer military support to Ukraine.

UK Defence Secretary Ben Wallace is understood to have requested a range of options from military chiefs in a bid to match the build-up of Moscow’s forces along the Ukrainian border.

Following NATO  talks yesterday, thousands of US troops are set to be deployed to Bulgaria, Romania and Hungary. Washington has asked its allies, including Britain, to help provide additional manpower.

The UK has already sent several shipments of arms to Ukraine, including a batch of NLAW anti-tank rockets, and has dispatched British military personnel to help train Ukrainian forces.