Page:Twelfth Report Defeating Putin the development, implementation and impact of economic sanctions on Russia.pdf/13

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Defeating Putin: the development, implementation and impact of economic sanctions on Russia

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2022, and the Government stated that it would “have designated over 1,000 individuals and entities since invasion under the Russia sanctions regime” by the end of 15 March 2022.^[1]
Prior to those designations, concern had been expressed at the speed of the imposition of sanctions against individuals, and Mr Keatinge told us that, in this area, “the UK is not progressing well in contrast to our peers”.^[2] However, he also cautioned that “We should be going after these individuals, but I repeat: it has become a very unhelpful metric by which to judge how the UK is progressing.”^[3] He argued that “It is unfortunate that we have got so hung up on whether Mr X or Mr Y is subject to sanctions. In reality, as I think we all agree on this panel, what is going to crush—I use that word advisedly—the Russian economy, is not sanctioning Mr X and Mr Y”.^[4]

Illicit finance

The need for effective economic sanctions has also raised, again, concerns about the flow of illicit finance into the UK from Russia. The Government has recently, if belatedly, taken steps in this area through the Economic Crime (Transparency and Enforcement) Act 2022, which:
- introduces an overseas entities register for UK property, to give more clarity in future to where beneficial ownership of property lies;
- strengthens the ability to use Unexplained Wealth Orders for seizing assets;
- assists OFSI in imposing monetary penalties; and
- streamlines the process for applying economic sanctions, and reduces the areas in which damages can be paid.^[5]
We also note that the Government has announced a new “’kleptocracy’ cell” based in the National Crime Agency.^[6]
We also note, however, that combatting illicit finance is essentially an objective of antimoney laundering tools rather than sanctions tools. Dr Justine Walker, Head of Global Sanctions and Risk at the Association of Certified Anti-Money Laundering Specialists, drew to our attention this distinction and its consequences:

In my mind, those are two very different conversations, because the legal framework is very different. If you are trying to prove illicit wealth, and to seize assets on the basis of illicit wealth, you have to have grounds to prove that. However, if this is a sanction to do with proximity to Putin and closeness, it is a different type of conversation.^[7]

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