Sanctioned Russian oligarchs have reportedly been given secret permission by the British government to access their frozen bank accounts to splash the cash on drivers, chefs and housekeepers.
In some cases the businessmen were reportedly allowed more than £700k ($1m) in living expenses, despite being on the sanctions blacklist for their alleged support of Putin’s regime, according to the New York Times.
A leading Kremlin critic accused Rishi Sunak’s government of “giving its full support” to Putin’s cronies, as they try to evade UK sanctions.
After Russia’s invasion of Ukraine last February, the UK government was one of the first to impose harsh financial restrictions on Kremlin-connected oligarchs.
Liz Truss, the then Foreign Secretary, vowed that Brexit Britain would “cut off funding for the Russian war machine”.
In an announcement of new sanctions on March 15, 2022, the Foreign Office trumpeted that more than 1,000 Russian individuals and entities had now been blacklisted.
Ms Truss said: “We are going further and faster than ever in hitting those closest to Putin – from major oligarchs, to his Prime Minister, and the propagandists who peddle his lies and disinformation.
“We are holding them to account for their complicity in Russia’s crimes in Ukraine.”
However Britain’s determination to hold Putin’s enablers to account has proven to be somewhat less robust in practice, according to a new investigation by the New York Times.
Under an exemption scheme, some of the wealthiest and most influential oligarchs were quickly granted licences to access their frozen bank accounts to pay for their living expenses.
Mikhail Fridman, a Russian banking tycoon, was allowed to withdraw £300,000 to pay for 19 members of staff, including drivers, private chefs, housekeepers and handymen, during the first year of the war, the investigation found.
At the same time, he reportedly received approximately £7,000 per month to cover his family’s basic needs.
His former business partner, Petr Aven, is said to have been paid a monthly allowance of £60,000.
More than two-thirds of that money was reportedly given to a security company run by his financial adviser, Stephen Gater – the NYT reported.
Mr Gater has been investigated for allegedly helping his boss evade sanctions, court records show.
The UK government has described both oligarchs as “pro-Kremlin” and with close ties to Putin.
The entrepreneurs, who founded Alfa Bank, strenuously deny these charges and say they are simply “politically neutral businessmen”.
Mr Fridman and Mr Aven are not alone in reportedly enjoying exemptions from sanctions.
By the end of last year, the UK government had approved 82 licences, with many awaiting a decision.
Economic considerations are believed to be the reason behind the government’s apparent lax policing of its sanctions’ regime.
Transparency International, an anti-corruption group, estimates that Russians accused of financial crimes or linked to the Kremlin own £1.5billion worth of British property.
Moreover, a recent government report states that licences are “issued to protect individual and UK business needs.”
William Browder, a former major investor in Russia, said the sanctions loopholes illustrated the UK’s addiction to the Kremlin’s dirty money.
He told the New York Times: “It’s an indication of why this country has been so bad at curbing dirty Russian money.
“There seem to be loopholes everywhere you look and here is the government giving oligarchs its full support to get around its own sanctions.”
The sanctions loophole was first revealed by the Telegraph, earlier this year and a Whitehall source told the paper the “sanctions legislation allowed Treasury licences to be granted to ‘enable economic activity to continue, where there is an appropriate derogation, that would otherwise be prohibited under the applicable sanctions regime’.”
