Seizing Corrupt Russian Wealth to Support the Ukrainian War Effort

On Monday, 11th of July the APPG on Anti-Corruption & Responsible Tax, the APPG on Fair Business Banking and the APPG on Magnitsky Sanctions, co-hosted a discussion on asset seizure in the wake of the war in Ukraine, and the sanctions imposed against Russian entities.

The UK has frozen billions of pounds in Russian assets under sanctions following the invasion of Ukraine. The Government now has an opportunity to repurpose this wealth to provide reparations for the untold damage caused by this war. To date, Russia’s invasion has caused an estimated £76bn damage to Ukraine’s infrastructure. 

The amount of assets frozen within the UK is likely to be at least one hundred times the £400 million that has so far been committed in humanitarian aid to Ukraine. In her capacity as Foreign Secretary, Liz Truss stated that she was “supportive of the concept” of confiscating frozen Russian assets and repurposing them for victims, though this support never materialised into action. The Times reports Boris Johnson has raised concerns that Rishi Sunak, the other Conservative leadership hopeful, would go “soft” on Putin and ease sanctions on Russia.

Both candidates should highlight this issue in their campaigns over the summer, to signal that they are going to stay tough on Russia’s illegal war, but also that they are going to make this a priority when they become Prime Minister. After all, ‘Londongrad’ was a national security issue long before the war in Ukraine, and will continue to be a threat long after.

During this roundtable, participants reached a consensus that there is need for primary legislation for the recovery of state assets, given the fundamental principle of sovereign immunity. The main concerns over confiscation of state assets hinged on a reticence to create an unfortunate precedent that could be misused in other contexts. On the matter of confiscating individual assets, the main challenge identified by discussants is the difficulty in tracing and proving the criminal origins of oligarch’s assets, as such criminal origin is often historical.

Participants looked to legislative opportunities that would allow for the introduction of these measures of asset confiscation. For individual assets, there is clear opportunity for amendments to the upcoming Economic Crime Bill, and potentially to the Proceeds of Crimes Act itself. There are limitations of scope for state assets in terms of upcoming legislative opportunities, but primary legislation could be enacted if there was the political will to do so.

In any case, any measure taken today should be designed to stand the test of time, so that it can be used in the future against criminally acquired assets from other unpalatable regimes and in support of other sanctions, such as those targeting corruption or human rights abuses.

The APPG on Anti-Corruption and Responsible Tax will continue to campaign to create a cross-party consensus for driving out dirty and corrupt money. We hope to bring forward solutions to enhance our asset seizure capacities in the Autumn, ahead of the second Economic Crime Bill.