In a bid to tackle corruption in the UK, the government has notified that Russian oligarchs suspected of corruption will be forced to explain how they acquired their lavish lifestyles in the region.
This is due to the newly passed law called the Unexplained Wealth Orders (UWOs) which came into force on January 21st, 2018.
The Russian oligarchs are business entrepreneurs who emerged under Mikhail Gorbachev (General Secretary 1985–1991) during his period of market liberalization. The genesis of the word ‘oligarch’ can be traced back to Greek origins. It roughly means – ‘rule of the few’. The rise of oligarchy system in Russia has its roots at the end of the Soviet era. When the Soviet Union split up, during Mikhail Gorbachev's perestroika, many Russian businessmen became extremely wealthy by either importing or smuggling goods such as personal computers and jeans into the country and sold them, often on the black market, for a hefty profit.
Anatoly Chubais, is the man most credited with the Yeltsin-era privatization that led to the growth of the oligarchs. Today, oligarchs wield an incredible amount of influence in Russia and its government. However, with the Russian public, they are considered unpopular. They are commonly thought of as the cause of much of the turmoil that plagued the country. The most famous oligarchs of the Putin era include Roman Abramovich, Alexander Abramov, Oleg Deripaska, Mikhail Prokhorov, Alisher Usmanov, German Khan, Viktor Vekselberg, Leonid Mikhelson, Vagit Alekperov, Mikhail Fridman, Vladimir Potanin, Pyotr Aven, and Vitaly Malkin. In 2017, more oligarchs came under the scrutiny of the law. On November 22, Russian oligarch and senator Suleiman Kerimov (net worth of $6.3 billion) was arrested in Nice and now stands accused of money laundering. Similarly, the Dutch subsidiary of Russian Alfa Bank was searched and its assets were frozen on December 13th, 2017. The bank belongs to Michael Fridman, Pyotr Aven, Alexey Kuzmichev and German Kahn (combined net worth of $35.6bn).
Many oligarchs currently have property across the world and reside in other nations including the United Kingdom. The number of billionaires living in the UK has risen to more than 100 for the first time, according to the 2014 Sunday Times Rich List. There are now 104 billionaires based in the UK with a combined wealth of more than £301 billion. London is home to some of the world's super-rich, and reportedly corrupt individuals from overseas who buy assets to hide their illicit wealth. Some experts have noted that nearly 90 billion dollars of illegal money was laundered in the UK in 2017 alone.
Unexplained Wealth Order (UWO)
On 27th April 2017, the UK parliament passed a provision of the Criminal Finance Bill that introduces method to tackle corruption in the region. It was called the Unexplained Wealth Orders. This followed action that was already taken by governments in Australia and Ireland. The UK law enforcement agencies can now use an Unexplained Wealth Orders to investigate the source of that money, and, if it is found to be corrupt money, more easily return it to those from whom it has been stolen.
In a bid to tackle corruption in the UK, the government has notified that Russian oligarchs suspected of corruption will be forced to explain how they acquired their lavish lifestyles in the region. UK Security Minister Ben Wallace confirmed it and noted, “We will come for you, for your assets and we will make the environment you live in difficult. Beneath the gloss there is real nastiness. So far it's very close to the truth, the international nature of organised crime and the impunity with which some of these people operate and the brutality of it .... The government's view is that we know what they are up to and we are not going to let it happen anymore."
“If they are an MP in a country where they don’t receive a big salary but suddenly they have a nice Knightsbridge townhouse worth million and they can’t prove how they paid for it, we will seize that asset, we will dispose of it and we will use the proceeds to fund our law enforcement.”
Rachel Davies Teka of Anti-Corruption Transparency International UK, said: “The introduction of UWOs is a significant moment in the fight against dirty money flowing into the UK. They will allow law enforcement to much more easily investigate assets that are highly likely to have been bought using corrupt money, often stolen from populations in some of the poorest parts of the world. From Russia to Nigeria to the Middle East it is no secret that corrupt officials have channelled ill-gotten funds into the UK via the property market.”
Our assessment is that the Unexplained Wealth Orders holds serious repercussions to Russian oligarchs who have chosen to make UK their home base or have chosen to conduct business from the region. It follows similar action taken by the governments of Ireland and Australia to address the problem of money laundering. Any individual who is deemed to have assets worth more than 50,000 pounds of unexplained wealth will come under scrutiny. We believe that Indian citizens boasting extreme wealth in UK will also have cause to be concerned.