Russian Oligarchs May Lose Fortunes Stashed In The U.K.

Russian Oligarchs May Lose Fortunes Stashed In The U.K.

The rhetorical war on Russia, especially from British Prime Minister Theresa May and British foreign secretary Boris Johnson, has marked a ratcheting up of the all-out battle of words against Russia that seems as likely as not to evolve into a battle of arms. While this relatively newfound antipathy aimed primarily by the West at Russia is not good news for anybody, Russian oligarchs who have long hoarded their domestically-earned assets in Western banking hotspots – London in particular – could serve to lose as much as anybody as the result of heightened tensions.

Since the 2016 American election, the vilification of Vladimir Putin’s government by Western officials has been ceaseless. It’s odd for several reasons, chief among them that Vladimir Putin has been known as a strong-armed leader with at-times ruthless means in his arsenal for quite a while now. The timing of the anti-Putin rhetoric was all-too-conveniently timed along with debunked allegations that it was a Russian agent, not somebody with direct access to DNC servers, who was behind the leaking of emails that certainly contributed to Hillary Clinton’s loss in the 2016 presidential election.

Since then, we have witnessed open provocation and demonization of not only Putin himself, but his countrymen in general, that has once again made “Russia” a dirty word. Despite several Western leaders, particularly those now salivating as they call for Putin’s head, being on record as doing some of the most under-the-table business with Putin’s government that we have seen in decades, they now say everything short of calling for war.

The poisoning case of Sergei Skripal, a former Russian double agent, and his daughter Yulia has brought tensions between the West and Russia to an all-time high. As Donald Trump continues to play relatively nice, calling to congratulate Putin on his latest election victory, England has taken over the role of Russo-pecking terrier, levying allegations of “overwhelming evidence” that Russia was behind the attack, despite failing to reveal such evidence while admitting the investigation will take months to complete. Boris Johnson has called Russian denials of having perpetrated the attack “bizarre,” and that it was “overwhelmingly likely” that it was Vladimir Putin’s decision to carry out such an attack.

Yes, under normal circumstances it would seem most likely that a Russian association or outright guilt in the instance of a nerve agent attack would be the most logical conclusion. But the strange, completely un-diplomatic manner in which Johnson and May have publicly leapt to their conclusions is enough to make one wonder what’s really going on. Levying such outright accusations against world leaders without overwhelming evidence which the public is made privy to is far from standard fare.

Then there’s the reality that England is the home of many a fortune belonging to Russian oligarchs, and that this heightened rhetoric against Vladimir Putin and his allies looks like it may serve as justification for the seizure of such funds by the British government. Initially labeled as a crackdown on ‘dirty money’ by England – the home of massive banks which have gotten away with being go-betweens for corrupt sporting bodies, cartels, war criminals and beyond – the Skripal case appears to be the catalyst by which the government may actually seize foreign funds which have been trafficked through its domestic banks for years.

The banks have been ‘poisoning’ British society without serious rebuke throughout recent memory, but the emergence of unabashed vilification of the Russian president could mean that Russia oligarchs’ fortunes are presenting themselves as the perfect target for British seizure. Targeting domestic banks would be massively unpopular and likely political suicide depending on already-laid connections and arrangements, but Britain has already accused Putin and his oligarchic cronies of attempted murder, so why hesitate to seize Russian funds housed in London?

Russian oligarchs store their money in the West, in places like Switzerland and London, for several reasons. Because Vladimir Putin is known to seize fortunes and assets on a whim, oligarchs have to save their wealth wisely, which often means not storing it domestically. They buy property, take advantage of banks willing to turn their heads to suspicious deposits (until now, apparently), and purchase mega-mansions in a manner that can, in fact, be considered a form of money laundering, or at least concealment.

The Russian economy is in dire straits, due in large part to the cronyistic nature in which state-owned assets are doled out – a manner which is contrary to the free market – and this is also a factor which makes investment in Russia unwise. But, the oligarchs who have chosen Britain as the primary location in which to store their wealth may now be realizing that they’ve made a mistake.

In February, it was announced that Russian oligarchs will be ordered to explain their wealth to the British government, an about-face in secretive banking practices that was targeted at the single group.

‘Last year, British media reported on a "Laundromat" inquiry into an alleged Russian-led money-laundering scheme, in which $22.3 billion passed through Moldova using Russian shell companies and fictitious loans from offshore companies based in Britain in 2011-14.

“The government's view is that we know what they are up to and we are not going to let it happen anymore,” Security Minister Ben Wallace added.’

To be clear, we are all for cracking down on corruption and money laundering. It just feels so selective, so opportunistic considering recent events and the global climate as a whole. Taking that a step further, such seizures feel almost dangerous, considering the fine line the West is already walking concerning potential armed conflict with Russia.

Now, it’s been announced that monetary assets aren’t the only form of wealth which the British government intends to inquire into and seize if they see fit. The massive luxury real estate market owned by Russian nationals will be the focus of investigations, too. A practice that began in the 1990s – Russians moving their wealth to a welcoming English economy – appears to be coming to an unceremonious end, confirmed by the Prime Minister herself.

‘On Wednesday, Prime Minister Theresa May vowed to "freeze Russian state assets" used to attack British citizens and crack down on "serious criminals and corrupt elites," adding, "There is no place for these people — or their money — in our country."’

This will be a windfall that the British government has been sitting on for over two decades, and they appear finally brazen and opportunistic enough to cash in. Let’s hope that the expulsion of diplomats, murderous allegations, and seemingly impending financial seizures are the end – not just the beginning – of an alarmingly escalating chain of events between sitting British leadership, other Western nations, and Vladimir Putin’s Russia.