The amount of money held by Russians in the UK is dwarfed by the amount held in the British Overseas Territories, which include some of the world’s most significant tax havens, according to new analysis released today by Global Witness. The report, Missing the Bigger Picture, is released as politicians have called for a crackdown on criminal and corrupt cash from Russia following the poisoning of Sergei Skripal and ahead of a crucial vote in parliament to increase transparency in the UK’s tax havens on Tuesday 1 May.
The analysis of figures from the IMF and Russian Central
- Nearly five times as much Russian money is
invested in the British Overseas Territories (OTs) as is held in the UK.
- £34 billion of Russian money is currently
invested in the OTs, making it the third most popular place to store money,
after Cyprus and the Netherlands.
- Over the last ten years, more than 7 times more
money has flowed from Russia to the OTs than has gone to the UK.
- Over this period, £68 billion from Russia has
been invested in the OTs.
- The British Virgin Islands (BVI) is the second
most popular destination for money leaving Russia, second only to Cyprus.
- Money invested in the OTs accounts for 12% of
all Russian money invested outside Russia.
The report shows that the billions of Russian cash flowing into and through the OTs include the proceeds of crime and suspected corruption. Companies in the OTs have been used by Russian businessmen to receive £100 million from the ‘Russian Laundromat, as part of a money laundering scheme used by the Russian state-owned arms exporter and a scheme to shift $10 billion out of Russia.
The briefing also highlights a case in which one BVI company linked to the Russian mafia paid $900,000 to another BVI company owned by a Russian who was later sanctioned by the US for his involvement in the Syrian government’s chemical and biological weapons programme. One of the owners of the BVI company linked to the Russian mafia, Alexander Perepilichnyy, became a whistleblower and later died in suspicious circumstances in Surrey in 2012. A US intelligence report stated with ‘high confidence’ that his murder was sanctioned by Putin.
Global Witness’ Senior Campaigner Murray Worthy said: “If politicians are serious about tackling criminal and corrupt from cash from Russia they simply cannot ignore the enormous role the UK’s tax havens play. The UK government is responsible for these shady island economies and must make sure they can no longer be used to facilitate laundering dirty money by ending the secrecy that enables these outrageous schemes.”
Ava Lee, Senior Communications Advisor, Anti-Corruption
Next week MPs are expected to vote on an amendment to the Sanctions and Anti-Money Laundering Bill that would require the OTs to introduce public registers of the real owners of companies registered there. The UK introduced a beneficial ownership register in 2016 and all EU countries are expected to have to introduce them by the end of 2019.
The full report can be found here: http://bit.ly/2HXYj4a
Corruption & Money Laundering, Anonymous Companies
The Paradise Papers
The ‘Paradise papers’ revelations shine a fresh light on how the secrecy for sale in tax havens facilitates tax evasion, organised crime and corruption.
Anonymous Companies, Corruption & Money Laundering, BanksBlog post
A Year After Release, Panama Papers Remain Evergreen (Updated Version)
One year on, the impact of the Panama Papers has been profound. Government officials have resigned. Executives have been sacked. Criminal charges have been filed.
Anonymous CompaniesBlog post
Missing the bigger picture? Russian money in the UK's tax havens
According to new Global Witness analysis more than 7 times more money has flowed from Russia to the Overseas Territories than has gone to the UK over the last ten years.