London is still 'laundromat' for 'dirty money' from Russia despite sanctions, Labour warns

Shadow foreign secretary David Lammy suggests the UK could be doing more to stop 'dirty money' flowing from Russia to London.

People walking near the Royal Observatory, Greenwich, with the Isle of Dogs in the background
Labour has vowed to do more to tackle Russian-linked corruption in London if it gets into power. (Alamy)

Labour has vowed to "plug the gaps" in existing measures to prevent Russian interference in elections and to tackle the flow of "dirty money" coming into London.

Shadow foreign secretary David Lammy said that while the UK has led the way on sanctions against Russia following Vladimir Putin's invasion of Ukraine, he's worried they still aren't being implemented as effectively as possible.

"The issue now is the enforcement of those sanctions and if we do have the privilege to serve, that is the area in which I will look more closely to ensure that there is the proper co-ordination across both the Foreign Office and the Treasury," he told the BBC's Sunday With Laura Kuenssberg programme.

Asked if he thought this means not enough is being done now, Lammy said: “I remain concerned about the dirty money that continues to flow through London, I remain concerned that the full implementation of the Russia report following the interference in our elections and the work of our select committee have not been fully implemented.

“So yes, I think there are gaps and if we are successful, when the general election is held, I intend to plug those gaps.”

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Lammy made the remarks while attending the Munich Security Conference, along with Sir Keir Starmer, who is believed to be the first Labour leader to have attended the event since 2010, when the party were last in power.

As the pair meet with world leaders and foreign ministers, they appear to be presenting themselves as part of a government-in-waiting, as prime minister Rishi Sunak continues to trail behind in the polls with a general election expected in 2024.

Their comments on Russian aggression are particularly timely, following the mysterious death of opposition leader Alexei Navalny in an Arctic penal colony.

Watch: David Lammy says he is concerned about 'dirty money' in London despite Russian sanctions

Prison officials are said to have told Navalny's mother that he died of "sudden death syndrome", but many Western leaders and other allies are holding Putin responsible.

At the conference, Starmer reiterated Britain's support for Ukraine in its defence against Russia, and attacked US presidential hopeful Donald Trump's "bad faith" criticism of the Nato alliance.

London has become the 'laundromat of the world'

Speaking to Sky News's Trevor Phillips on Sunday programme, Lammy said: "Of course it's important that we stand up to Russian aggression abroad and in central Europe, but it's hugely important that we deal with Russian aggression in our own country.

"We have been calling now for months and months for the government to implement the Russia report that our intelligence select committee reported on. We have no register of overseas property, 250,000 properties in London owned by overseas entities, they haven't dealt with the Computer Misue Act, why?

"They have changed electoral law to allow limitless donations to political parties, it's hard to understand. They've taken about £5 million worth of donations from Russian-linked donors, they should give that money back.

"We've been saying that we have to deal with the dirty money that's circulating in London – London becoming the laundromat of the world – and, embarrassingly, President [Joe] Biden conveying concern that the sanctions regime that we needed is compromised because of the government's refusal to deal with that dirty money problem."

Yahoo News has contacted the Conservative Party for comment.

Sydney, Australia. 18th February 2024. Flowers were left at Raoul Wallenberg Garden in Woollahra by Svoboda Alliance in memory of Russian opposition leader Alexei Navalny who died under mysterious circumstances and is suspected by many to have been murdered under the orders of Putin. Credit: Richard Milnes/Alamy Live News
Lammy's comments come following the mysterious death of Russian opposition leader Alexei Navalny. (Alamy Live)

What was in the UK's report on Russian interference?

In a report released in July 2020, Parliament’s Intelligence and Security Committee (ISC), warned that the UK government had "badly underestimated" the threat posed by Russia and was playing "catch up".

It claimed responsibility for defending the UK’s democratic processes from interference was being treated like a “hot potato” by the country's intelligence community, accusing agencies of taking their "eye off the ball".

The cross-party panel said there were many Russians with “very close links” to President Vladimir Putin who are “well integrated into the UK business and social scene”, warning that “welcoming oligarchs with open arms” had been “counter-productive” and led to “illicit finance” flowing through London.

Members argued that thew 2006 murder of Alexander Litvinenko in London demonstrated that Russia had moved from a “potential partner to established threat” under Putin. It said Russia is motivated by a desire to be seen as a “resurgent great power”, explaining that it is “seemingly fed by paranoia” in relation to institutions such as Nato and the EU.

This particular point seems all the more relevant today, given that Putin has insisted Nato expansion and Western efforts to undermine his country is to blame for his invasion of Ukraine.