The Chelsea dagger: UK hits Putin’s cronies where it hurts
It must have been heart-wrenching for the Chelsea FC owner Roman Abramovich not to attend the English FA Cup Final in London and miss lifting the trophy with his players. Apparently, his absence was the result of his British visa not being been renewed.
It is unusual for someone with his wealth and magnitude of investment in the UK not to be almost automatically granted the right to live and work there. This raised the suspicion that it was not a bureaucratic hitch, but the result of greater scrutiny by the government in London of Russian oligarchs close to President Vladimir Putin, sending a message to Moscow that he and those around him are not untouchable. While the official line is that the government would not comment on individual cases, the prime minister’s office was quick to add that it was only logical to examine the financial background of those who ask to extend their stay. In the past such individuals needed only to prove their wealth, not how they acquired it.
Fast-tracking such visas was a way of attracting foreign investment in abundance. The combination of business opportunity and economic and political stability, without too many questions asked, became fertile ground for Russian investment, especially in London’s property and financial markets. The downside is that it has also become a popular destination for money launderers.
Growing tensions with Russia are a reminder that this kind of investment has its moral and political price. Nevertheless, in a time of crisis, the British political establishment realizes that, as useful as this money is for the UK’s economy, it is also a useful tool for containing Putin. Investing in the UK is mutually beneficial, as the wealthy Russian oligarchs seek economic and political stability and a haven for a rainy day, when they fall out with the modern-day Russian tsar. Their relations with the president are instrumental, as Putin enables them to constantly increase their wealth, and they help him stay in power almost indefinitely.
Britain’s new tactic of delaying visas, while asking for evidence of the source of their wealth, is a case of stealthy and smart sanctions. It attempts to drive a wedge between the Russian leader and those whose wealth and economic interests the Kremlin protects, and to limit their economic activity.
It would be naive to think that British politicians have suddenly rediscovered their moral conscience and decided to clean the country of what has been called Russian “dirty money.” There is a much bigger picture, in which this new policy reflects growing discomfort and concerns about a resurgent Russia, which despite a sluggish economy is trying to revive its superpower status — a status it had painfully and humiliatingly lost at the end of the Cold War.
A confident Putin, who has just been re-elected for another six-year term, has reasserted himself in his geopolitical backyard; has shown in Syria that he was ready to take bold and dangerous decisions to advance Russian interests in a place very few gave him any chance of succeeding; and at home is ruling with an iron fist. In both domestic and international relations, he operates with utter disregard for human rights, with little or no opposition.
Britain’s new tactic of delaying visas, while asking for evidence of the source of their wealth, is a case of stealthy and smart sanctions.
While 10 Downing Street was more cautious in response to the question of Abramovich’s visa, Foreign Secretary Boris Johnson was more forthcoming, acknowledging that the British government was prepared to deal with the broader question of cracking down on Putin associates “who may have illicit or ill-gotten wealth.”
Until quite recently, the mood in London was that the flow of investment from Russia, as from anywhere else, was too precious to the British economy to follow the trail of its origin. However, Russia’s aggressive foreign policy — combined with the audacious poisoning of Russian citizens in the UK, by what the British government is adamant were Putin’s agents, not to mention interfering in the Brexit referendum and elections — left a strong sense that it was time to stand up to Putin’s Russia.
Morality aside, the new approach stems from a view by the British government that the accumulated wealth of Russian oligarchs is a threat to the British national interest. The UK, by facilitating their business activity, is also enabling Putin’s oppressive policies at home and hostile ones abroad.
In one of the most robust encouragements for the British government to change its policy toward Russian wealth in the UK, Parliament’s powerful Foreign Affairs Committee published a report with the rather provocative title “Moscow’s Gold: Russian Corruption in the UK.” This report asserts that countering Russian corruption is a national security priority. It was put in no uncertain terms by the chairman of the committee, Tom Tugendhat, who referred to what he called Russian “dirty money,” stating that the damage it causes to Britain’s foreign policy interests dwarfs its benefits to the economy.
When the balance between the economic benefits of this money laundered through London and the way it is used “to corrupt our friends, weaken our alliances, and erode faith in our institutions” tilts toward the latter, it would be a folly to allow these corrupt practices to continue.
In light of the government’s rhetoric following the Salisbury poisoning, a new strategy of depriving the Russian regime of its financial resources is an almost inevitable and logical step. The era of Britain being “open for business” regardless of an investment’s origins and how it affects the UK’s wider interests had to be challenged and eventually altered.
These recommendations by Parliament, together with the new Cabinet stand, are not free of risks. The West hasn’t always been attentive enough to Russia’s legitimate concerns, but nevertheless it can’t accept the latter’s aggressive and unilateral policies. The UK on its own can’t and won’t counter Moscow, but by changing its course of action it makes a significant contribution, and challenges others to join in.
- Yossi Mekelberg is professor of international relations at Regent’s University London, where he is head of the International Relations and Social Sciences Program. He is also an associate fellow of the MENA Program at Chatham House. He is a regular contributor to the international written and electronic media. Twitter: @YMekelberg