Russian money has corrupted our economy
Britain, and ‘Londongrad’ in particular, must sever its commercial and financial links with tainted Russia
What’s been holding her back? Let’s for the moment leave aside the issue of whether to take military action against the Russian-backed regime in Syria. As seems to be her nature, Theresa May has been prevaricating on sanctions against Russia for the Salisbury attack. There has been plenty of sabre-rattling rhetoric, but the only action taken so far has been the expulsion of 23 diplomats. This is a pathetically inadequate and ineffective response.
Contrast this with the action taken by President Trump, who has struck at the heart of Russia’s Kremlinorchestrated kleptocracy by effectively banning key officials, organisations and companies from participation in the dollar economy. You wonder what on earth our own, British Government is playing at. Its lack of similarly targeted sanctions seems almost inexplicable.
What the US has done with its so-called “Specially Designated Nationals and Blocked Persons List” is likely to prove ultimately far more effective in undermining Vladimir Putin’s ambitions, even his grip on power, than anything that can credibly be achieved via military means. Trump is punishing Putin where it hurts most, freezing his cronies out of international trade and commerce. In so doing, he further weakens an already recessionwracked economy struggling to maintain a military budget hugely expanded to support the hubris of Putin’s superpower pretensions.
As Mikhail Khodorkovsky discovered to his cost, kicking against the regime is a dangerous business in Russia; its leading oligarchs are entirely dependent on Kremlin consent for their wealth, position and even freedom. But these are powerful men and they won’t take kindly to being shut out of Western markets. If even in his own backyard Putin is thought to have overplayed his hand, he may be in some danger.
Never mind Mrs May; Trump too, it is fair to say, has not exactly been champing at the bit to toughen up Russian sanctions, possibly for fear of what may come out about Russian involvement in his own electoral victory. Last week’s actions were approved by Congress as long ago as last summer. They’ve been sitting in his in-tray ever since.
This in itself may have lulled Putin into thinking he could do what he wants without consequences. Yet whatever the immediate cause of Trump’s change of heart, his actions threaten devastation to elite Russian wealth and impoverishing isolation for the wider Russian economy.
It is a measure of the continued power of dollar hegemony that now the US has acted it may not actually be necessary for the UK to impose its own sanctions. By threatening non-us citizens and organisations with penalties if they deal with blacklisted names, the US Treasury reaches out from its own borders to London and beyond. No bank of any significance, wherever it is based, can afford to transact with Oleg Deripaska and other named oligarchs if the price is loss of their dollar clearing licence. Without it, they are out of business. Deripaska’s London assets are therefore already as good as frozen.
Existing European Union sanctions, imposed in response to the Russian invasion of Crimea and intervention in eastern Ukraine, are so tame in their ambition and patchy in their application as to be barely worth the paper they are written on. And so to the British excuse – that responsibility for UK sanctions policy is held at EU level, leaving Britain powerless to act unilaterally. With strong commercial and financial links to Russia, large parts of Europe, including Germany, have proved less than enthusiastic in pursuing more effective sanctions. Until Britain’s own Sanctions and Anti-money Laundering Bill becomes law this summer, there is no legal framework through which to pursue independent action, and even then, it may carry no authority until the UK is fully free of the EU.
That’s the excuse, in any case. But it is not a credible one. We are dealing here with matters of national security; these must surely override the legal niceties of whatever powers have been transferred to Brussels. We cannot allow other sovereigns, in defence of their own commercial interest, to temper our response, as has happened all too frequently in the past when it comes to EU dealings with Russia, corrupted as they have been by member-state reliance on Russian energy, trade and money.
It might be said that what is sometimes known as “Londongrad” has its own commercial interest to protect. From property to luxury goods, and from football clubs to divorce and libel lawyers, whole industries of louche providers have grown fat on Russian money. Nor has there been any shortage of former Government ministers and City financiers only too happy to take the Russian shilling, from the former Labour spin doctor Peter Mandelson to the Cameron groupie, Greg Barker.
Tainted Russian money has become a malign and corrupting influence on the UK economy. Regardless of the poisonings and Russia’s shameful support for the brutality of Assad’s regime, it’s high time that this cancer was cut from the system. FOLLOW Jeremy Warner on Twitter @jeremywarneruk; READ MORE at telegraph.co.uk/opinion