security

UK’s Magnitsky law does little to stem flow of dirty money from Russia


He is known as Vladimir Putin’s enforcer. Almost every criminal case in Russia – from Pussy Riot to anti-government street protests – passes his desk. But as of last week Moscow’s top law officer, Alexander Bastrykin, is no longer welcome in Britain. He is banned from owning property, opening a bank account or popping over from Moscow for a weekend jaunt.

Bastrykin, the head of Russia’s powerful investigative committee, was one of 25 Russians sanctioned by the UK. All were allegedly involved in human rights abuses – specifically in the mistreatment of Sergei Magnitsky, who was beaten to death in 2009 in a Moscow jail. Bastrykin covered up the case, No 10 says. Others named and shamed include judges, interior ministry officials and prison staff.

The foreign secretary, Dominic Raab, hailed the new Magnitsky law as an illustration of how “global Britain” might be a force for good in the world. He claimed – inaccurately – that Brexit allowed the UK to bring in its own legislation. In fact, EU countries including Latvia, Lithuania and Estonia have already passed similar laws, following on from the US Congress in 2012.

Raab won cross-party support for his move. He has long backed a Magnitsky act. The government also sanctioned 20 Saudi nationals implicated in the 2018 murder of the journalist Jamal Khashoggi. It blacklisted Mynanmar’s two top generals. and targeted the North Korean security bureaus in charge of the country’s gulags.

But it remains to be seen how deep the government’s commitment is to dealing with the flow of Moscow-linked money into London, some of which goes into Conservative party coffers. The sanctioned Russians are mostly mid- or low-level officials – “technical people”, as one ex-Kremlin insider put it. None is believed to own property in the UK, or substantial assets.

“I don’t think it will bother him,” the Russian journalist Sergei Sokolov said of Bastrykin. In 2012 Sokolov – the deputy editor of the Novaya Gazeta newspaper – accused Bastrykin of failing to pursue a case. A furious Bastrykin allegedly took Solokov to a forest in south-west Moscow and threatened to murder him. Bastrykin denies this and says he does not go in for “nature trips”.

“From an ethical point of view the Magnitsky sanctions are the right thing to do. But they won’t make a difference within Russia,” Sokolov said. He added: “Bastrykin is a believer. He’s ready to do everything he’s asked and more. His committee is the main instrument of political repression in Russia, together with the FSB [spy agency] and the police.”

A tax auditor, Magnitsky was investigating a $230m fraud perpetrated against Hermitage Capital, a UK investment fund. The same officials he exposed arrested him. The firm’s chief executive, Bill Browder, hailed the UK government’s move as a “milestone” and a “huge win for the good guys”. “The door is open for this to become a feature of British government policy going forward,” he said.

According to Browder, the law’s impact goes far beyond the 50-odd individuals directly affected. Swiss banks were already offloading high-risk Russian clients, he said. He likened personal sanctions to “civil death”. Anyone on the list will show up on the “world check” system used in due diligence checks, meaning they are in effect shut out from international finance.

Browder gave evidence to the UK’s intelligence and security committee (ISC) for its Russia report. The ISC is due to reconvene on Monday. It remains to be seen whether its likely new chair, Chris Grayling, will release the report that was suppressed by Boris Johnson. Browder said the government had done little to tackle the problem of dirty money, or to take action against agents who set up anonymous offshore companies.

“The main problem is that nobody in the UK seems to have an appetite to prosecute anybody,” Browder said. New unexplained wealth orders are meant to deter foreign kleptocrats. So far, however, only two have been used. One has been issued against a wealthy Azerbaijani woman whose husband has already been jailed in her home country after he fell out with the country’s president.

David Clark, a former special adviser to the late Labour former foreign secretary Robin Cook, said he was sceptical the government was willing to act against oligarchs or others able to hire expensive lawyers. “I don’t see British foreign policy post-Brexit putting human rights first,” he said. “It’s going to be trade and power politics.”

Clark said Brexit meant Britain would be looking to do deals with non-EU countries on the continent. He predicted a “reset” with Turkey and Russia, despite Moscow’s 2018 nerve agent attack against the former Russian spy Sergei Skripal. Foreign Office sanctions were unlikely to deter future Kremlin plots, he said, noting those hit were “mid-level”. “Putin doesn’t care,” he added.

Meanwhile, Johnson’s own Russia ties have yet to be fully explained. As foreign secretary he flew without his security detail to spend the weekend at a palazzo belonging to the Russian media tycoons the Lebedevs. After winning the election Johnson attended Alexander Lebedev’s 60th birthday party. “The prime minister is deeply embedded with the Lebedevs of this world,” Clark said.

The early signs are it is business as usual, with realpolitik triumphing over human rights concerns. A day after imposing sanctions on Khashoggi’s assassins, the government announced it was resuming arms sales to Saudi Arabia.



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