Russian politicians and oligarchs should be forced to reveal how much they paid for property assets in the UK and face sanctions if they cannot explain where their money has come from.
That’s according to senior Labour and Liberal Democrat MPs, who are calling for a tough response to Sergei Skripal’s poisoning.
Figures from the Guardian suggest prominent Russian figures with ties to the Putin regime own British properties worth nearly £1.1 billion, mostly in London.
They include Alisher Usmanov, who owns a £48m property in Hampstead; Andrei Guriev, who has properties in Highgate and Vauxhall totalling £351m; Roman Abramovich, who owns a £90m property in Kensington Palace Gardens; and Andrey Goncharenko, with properties in Regent’s Park, Hampstead and Belgravia totalling £176.75m.
The true value is likely to be far greater because buyers can take advantage of offshore secrecy loopholes left open under Theresa May.
The government is expected to bring forward so-called Magnitsky amendments – the anti-corruption measures named after the late whistleblower Sergei Magnitsky to target politically significant Russians.
The expectation is that ministers will introduce new powers that could ban potentially corrupt figures from entering the UK, but opposition politicians believe this will have minimal impact in isolation.
Vince Cable, the Lib Dem leader, said newly introduced “unexplained wealth orders” should be deployed to step up the pressure.If granted by a court, the owner of a property in the UK who is judged to be a politically exposed person outside the EU has to explain how they could afford to buy it or risk having it seized.
“The prime minister must demand these oligarchs, who surely must be considered politically exposed persons, explain in writing, with detailed documentation, just how they obtained their fortunes,” said Cable. “If the answers are not forthcoming or are unsatisfactory, then authorities must seize their assets as a matter of urgency.”
John McDonnell, the shadow chancellor, said it was necessary to “hit the Russian elite in the wallet” and said Labour “will call time on global elites like the Russian oligarchs, who are essentially fleecing the Russian people and using our financial sector to hide their ill-gotten gains”.
Labour wants the government to implement promises made by David Cameron to force the British Virgin Islands and other overseas territories to introduce public ownership registers, a promised ditched under May.
It also wants to force those who own UK property via offshore companies to identify themselves more quickly than the 2021 timeframe set out by the government last month.
Dame Margaret Hodge, a Labour MP and a former chair of the public accounts committee, said expulsions of Russian diplomats, announced earlier this week by May, were insufficient.
Hodge said an indication of how far Russians – and other wealthy foreigners – were buying up property in the most prestigious parts of London was demonstrated by an 8% fall in the number of people eligible to vote in Kensington & Chelsea in west London since 2010, a time when the UK electorate increased by 3%.
“Wouldn’t it be far more effective to clamp down on Russian use of Britain as a safe haven for illegal wealth?” she wrote in an article for the Guardian.
DealMakerz understands the need for anti-corruption measures, but can’t help but feel the backlash is a way to win points after the Skripal poisoning.
After all, it’s not just Russians who have been buying up London property.
Wealthy people from around the world have managed to take advantage of offshore secrecy loopholes – in some instances to launder their ill-gotten gains.