Putin's war shows West must clean up dirty money
BNN Bloomberg
President Vladimir Putin’s regime has been accused of corruption for years by campaigners and investigative journalists. The U.S. Treasury said it officially on Monday, directly calling Putin’s regime a kleptocracy.
President Vladimir Putin’s regime has been accused of corruption for years by campaigners and investigative journalists. The U.S. Treasury said it officially on Monday, directly calling Putin’s regime a kleptocracy.
Putin has given the U.S. and its allies the perfect chance to crack down on the lax practices and loopholes that facilitate corruption and allow dirty money to swill around Europe, the U.S. and elsewhere. President Joe Biden has pledged that his administration would battle money laundering and tax evasion by kleptocrats and criminals, starting in the U.S.
Russia’s unprovoked invasion of Ukraine demanded a harsh and rapid response from world powers to try and cut off funding for Putin’s war effort. It is the time to strike at the regime’s shadowy offshore funds too.
“Before this, they couldn’t have gone after Putin without risking provoking him,” said Sony Kapoor, a banking and finance expert who runs a think tank, the Nordic Institute for Finance, Technology & Sustainability. “Now they can freeze, confiscate and repatriate assets from Putin and his inner circle directly.”
The U.K. has already been prodded to bring forward a delayed economic-crime law, designed to expose the true owners of real estate and tackle money laundering through London, estimated by the National Crime Agency to cost the U.K. more than 100 billion pounds (US$134 billion) a year. Switzerland and the string of global tax havens and secretive jurisdictions, including those under Britain’s protection, should be pressed to join the cause. Globally, the volume of illicit funds being cleansed in the financial system is worth 2-5 per cent of GDP, or up to US$2 trillion, according to the United Nations.
The U.S. Treasury’s Office of Foreign Assets Control on Monday banned any U.S. citizens or companies from dealing with Russia’s central bank as well as with Russian wealth funds and the ministry of finance. It described one sovereign pool, the Russian Direct Investment Fund, as “a slush fund” for Putin and “emblematic of Russia’s broader kleptocracy” in its statement.
