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London is money laundering capital of world for Putin's 'bad guys', boss claims

Published 08/11/2016

Russian President Vladimir Putin
Russian President Vladimir Putin

London is the money laundering capital of the world, a high-profile campaigner against corruption in Russia has warned MPs.

Bill Browder told the Commons Foreign Affairs Committee that Russian President Vladimir Putin's "bad guys" enjoyed coming to London with their "dirty money".

The head of Hermitage Capital Management said the UK has robust legislation against money laundering, but law enforcement agencies are reluctant to go after suspects in case the court action failed and they were forced to pay the legal costs.

He called for structural changes to ensure watchdog agencies did not have to foot the court bill if their investigations fail to result in a guilty verdict.

If this happened, Mr Browder told MPs: "You might actually get the same type of robust investigations which would preclude and dissuade people from using London as the money laundering centre of the world.

"The rules in the UK, in terms of money laundering, are quite robust, the enforcement of those rules are exceptionally weak."

Mr Browder, a former investor in Russia, branded president Putin a "Mafia boss" who has amassed a personal fortune of $200 billion from corruption and embezzlement.

The long-term Kremlin critic called for Britain to impose sanctions against individual members of Mr Putin's circle believed to be involved in corruption and human rights abuses.

He said Britain was uniquely placed to have an impact on the Kremlin elite because London was a favoured destination for them and their families.

"All the bad guys in the Putin regime like to come to London, they like to send their kids to school in London, they like to keep their dirty money in London. This gives us huge leverage."

Mr Browder suggested that countries like Latvia were better at dealing with money laundering than the UK.

Mikhail Khodorkovsky, formally Russia's richest man who was imprisoned after he fell out with Mr Putin, also told the committee that the UK could do more.

"The UK certainly can do quite a bit. The UK is a rather popular place, after all, for depositing illegal assets of the Russian political elite. The United Kingdom applying consistently its legislation can actually do more than its doing as of today."

Mr Khodorkovsky said he did not think Mr Putin was a "mad man" seeking war with the West, but driven by the desire to remain in power which saw him continually test the resolve of Britain and other powers to see if they would stand-up to him.

Press Association

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