(Bloomberg) --
Prime Minister Boris Johnson was accused of being slow to act in sanctioning Russian billionaires after the U.K. lagged the U.S. and European Union in targeting individuals with links to Vladimir Putin.
In Parliament, opposition Labour Party leader Keir Starmer questioned why Igor Shuvalov, Putin's former deputy prime minister, is not on the U.K. sanctions list despite being on the European Union's.
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The U.K. has so far imposed sanctions on nine of the wealthiest Russians since Putin's invasion of Ukraine last week, as well as on a wider list of more than 100 named individuals and entities. But there's frustration among MPs of all political stripes that more haven't been targeted.
Johnson's government attempted to get on the front foot later Wednesday. U.K. cabinet minister Michael Gove is looking at plans to seize property owned by sanctioned Russian oligarchs without paying them compensation -- a move that is supported by Johnson, a person familiar with the matter said.
The proposals, first reported by the Financial Times, would likely require legislation and no final decision has yet been made. A government spokesperson said in an emailed statement: “We are sending a strong signal that the U.K.'s property market is not open to corrupt individuals and regimes laundering their money.”
Wealthy Russians Sanctioned by U.K. Since Ukraine Invasion
- Kirill Shamalov, Russia's youngest billionaire and Putin's former son-in-law
- Petr Fradkov, head of Promsvyazbank (itself already sanctioned) and son of former head of FSB
- Denis Bortnikov, deputy president of VTB
- Yury Slyusar, director of United Aircraft Corp.
- Elena Georgieva, chair of the board of Novicom Bank
- Volga Group founder and Novatek shareholder Gennady Timchenko
- Stroygazmontazh founder Boris Rotenberg
- Gazprom Bureniye shareholder Igor Rotenberg, Boris Rotenberg's nephew
- Kirill Dmitriev, CEO of Russian Direct Investment Fund, Russia's sovereign wealth fund
Starmer told lawmakers Wednesday that Igor Shuvalov owns “two flats, not five minutes walk from Parliament” that are “worth over 11 million pounds ($15 million).” He asked: “When will the prime minister sort this out?”
Johnson said the U.K. should “be proud of what we have done already” and that he will continue to “tighten the vice on the Putin regime.” The government will publish a full list of individuals associated with the Russian leader and his government, he said.
Speaking to reporters later, Johnson's spokesman, Max Blain, said the U.K. has gone further than other governments in targeting Russian banks and companies and that sanctions require “requisite evidence.”
‘Legal Reasons'
Yet even Conservative MPs are frustrated, accusing the Foreign Office of not being prepared for sanctions. Foreign Secretary Liz Truss has said that sanctioning is “not a competition” with other nations. On Tuesday Home Secretary Priti Patel said there are “legal reasons” for the time being taken.
Asked by Starmer why he hasn't imposed sanctions on Roman Abramovich, a Russian billionaire who owns a number of U.K. properties, Johnson said it wasn't “appropriate” to comment on individuals. Abramovich later announced he was selling Chelsea Football Club after almost two decades of ownership and had instructed the board to set up a charitable foundation that will receive all net proceeds from the sale.
U.K. Plans New Law to Crack Down on Foreign Money Laundering
Johnson this week unveiled an Economic Crime Bill that includes the creation of a register of foreign owners of U.K. property.
Time Lag
While Starmer told the premier his party backs the measure, he also questioned why it wouldn't take effect until a year and a half after the bill becomes law -- meaning that even if it's fast-tracked through Parliament, the register won't be enforced until at least late 2023.
“Why are we giving Putin's cronies 18 months to quietly launder their money out of the U.K. property market and into another safe haven?” Starmer asked.
The register was first proposed in 2016 by then Prime Minister David Cameron, but even though draft legislation was published two years later, foot-dragging by successive Tory governments has sparked concerns by opposition parties and rank-and-file Conservatives alike about the persistence of a London “laundromat” used to clean up illicit wealth.
The U.K.'s National Crime Agency estimates money laundering costs Britain 100 billion pounds a year.
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