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Britain moves to toughen laws on oligarchs. Critics say it’s too late.

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Britain moves to toughen laws on oligarchs. Critics say it’s too late.

LONDON – Eighteen months ago, Evgeny Lebedev was inducted into the Club by Inner Circle of elite Britain: the House of Lords, in which he was nominated for life partner by his good friend, Prime Minister Boris Johnson.

This week, Mr Lebedev, the 41-year-old Russian-British newspaper baron, found himself on much less comfortable ground. Writing on the front page of his paper, London’s Evening Standard, Mr. Lebedev urged Russian President Vladimir V. Putin to call off his brutal invasion of Ukraine.

“As a Russian citizen I beg you to stop the Russians from killing your Ukrainian brothers and sisters,” said Mr. Lebedev, whose father was once a KGB officer. “As a British citizen I ask you to save Europe from war. As a Russian patriot, I request you to stop any more young Russian soldiers from dying needlessly.”

Mr. Lebedev’s carefully calibrated message reflects a suddenly difficult scenario for wealthy Russians in Britain. Mr Putin’s attack has shed a harsh light on the oligarchs: most have made their fortunes thanks to their ties to the Russian leader. They have used London, with its laissez-faire regulatory environment, as a haven to hide money or launder unfairly earned profits.

Now, with much of the Western world uniting against Mr Putin’s aggression, Britain is moving to close a shameful loophole it has long turned a blind eye to.

The government on Tuesday introduced a new law in Parliament to prevent the entry of dirty money into Britain. Under the law, known as the Economic Offenses Bill, foreign companies that have assets must declare them the rightful owners or may eventually risk having their assets confiscated.

“They’re starting to feel the heat,” said Misha Glennie, author of “McMafia,” a book on organized crime that inspired a popular TV series about oligarchs. But he said of plans to tighten the rules, “there’s an element of closing the stable door after the horse bolts.”

The new law is aimed directly at elite Russians, who have hired battalions of lawyers, bankers and accountants to help them hide their wealth, much of which was collected through cronyism. Many hide their identities behind shell companies that own properties in London’s gilded neighborhoods.

Transparency International, which campaigns against corruption, estimates that British real estate worth 1.5 billion pounds ($2 billion) has been bought by Russians on charges of corruption or links to the Kremlin. Of this, around £430 million is in Westminster, the center of government, while £283 million is in the affluent Kensington and Chelsea.

The new law aims to strengthen the use of “unexplained money orders”, a legal tool that allows the government to confiscate property owned by people who cannot prove they were purchased with legitimate money. . Such orders have been invoked only nine times in four cases since 2018. Prosecutors have been reluctant to press cases because failing prosecutions could incur huge legal costs.

“This is an important step in dealing with Russian money,” said Rachel Davies, head of advocacy at Transparency International UK, “the long-pending promises of the government that are finally coming to fruition.” But he added, “there are shortcomings that the government needs to address.”

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Among them are exemptions for real estate purchased more than 20 years ago. And there will be an 18-month transition period before the law goes into effect, giving wealthy owners ample opportunity to sell.

In an interview with ITV on Tuesday, Mr Johnson, attempting to claim higher ground on the issue, said of the oligarchs who did not talk about Ukraine that their “silence is unforgivable.”

For critics, Britain’s action is too little, too late. The government was first committed to making these changes six years ago. Yet before Russia’s move against Ukraine last week, Mr Johnson was expected to extend the measures until at least 2023.

“The flow of dirty money into the UK and US has been undermining our national security for years,” said Tom Tugendhat, a Conservative chairman of the foreign affairs committee in the House of Commons. “Since 2018, I have been warning that we are paying for the weapons of our enemies.”

Mr Tugendhat, whose name has surfaced in recent weeks as a possible successor to Mr Johnson, has said Britain needs to move away from targeting individuals with “vague” restrictions. Instead, he said, it should be punished with the teeth, such as barring Russian companies from British markets and expelling family members of Russians linked to Mr.

Skeptics wonder how hard the government will work, given not only that legal, financial and other firms have benefited immensely from Russian cash, but also because of donations to Mr Johnson’s Conservative Party.

Since he became prime minister in 2019, the party, or its individual constituency associations, has received £1.93 million ($2.5 million) from donors who are either Russian or who have earned money from Russia, the opposition Labor Party calculates. According to the disclosures to the Election Commission

Russians who have donated to the Tories, according to the commission’s register, include industrialist Alexander Temerko and financier Lubov Chernukhin, with whom Mr Johnson played tennis in exchange for checks before becoming prime minister. While foreigners are not allowed to donate to political parties, those who can obtain British citizenship.

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There is no better example of the warm relations between the Russians and the establishment than Mr. Lebedev. Mr Johnson has been a weekend guest at his converted palace in Italy. Britain’s security agencies raised red flags when the prime minister submitted Mr Lebedev’s name to the House of Lords appointments committee, according to a person familiar with the process.

Although there is no suggestion that Mr. Lebedev served as an agent for the Russian government, he inherited his fortune from his father, Alexander, who once worked for the KGB and later became an oligarch. Went. The office of the younger Mr. Lebedev did not respond to a request for comment.

“What Lebedev shows is the blatant, shameful hypocrisy of the British government, and the Tory party in particular,” said Mr Glennie.

For Mr Johnson, the privileged status of the oligarchs has become a sad issue abroad. During a visit to Poland on Tuesday, a Ukrainian journalist, Daria Kaleniuk, hit out at him, saying that while children fleeing Ukraine were being bombarded by Russians, London provided a shelter for the children of Roman Abramovich, Joe was a billionaire with long standing ties. Mr Putin.

“I am acutely aware that as UK Government we are not doing enough to help the way we want,” Mr Johnson replied.

Mr Abramovich, who owns Chelsea Football Club, has moved to save his prize estate, announcing that he will turn over the club’s “caretaker and caretaker” to his charitable foundation, although he remains its owner. Will stay The next day, Chelsea issued a carefully worded statement saying “the situation in Ukraine is appalling and devastating” and that it was “praying for peace.”

In recent days, Mr. Abramovich, who also holds Israeli and Portuguese passports, said he was approached by Ukrainian authorities to act as a mediator with Mr. Putin. None of this stopped Labor MP Kris Bryant from demanding that Mr Abramovich be stripped of ownership of Chelsea.

For those who have taunted against dirty money for years, it’s hard to shake the feeling of cynicism that things will ever change.

“There’s a reason London is the money laundering capital of the world,” said William F., an American-born British financier. Brower, who worked in Russia and campaigned there against corruption and human rights abuses. “This is a land of grand announcements and shockingly poor implementation.”

Still, Mr Brower said he believed the sad images from Ukraine would shift the ground beneath the oligarchs, making their lives uncomfortable in a way that no previous conflict had. On Tuesday, a Conservative MP, Bob Seeley, Names of lawyers representing elite classes studied in Parliament,

“It used to be fine to stay in the House of Lords and moonlight for an elite class on the side,” Mr Brower said. “It used to be perfectly appropriate to go to a party on an elite class yacht. We are in a whole new world now.”


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