Jersey monitors fall-out from alleged Russian poisoning

Friday 16 March 2018

States and senior finance officials are remaining tight-lipped on how the growing tension between the UK and Russia will affect applications to live in Jersey from wealthy Russians, or the handling of Russian money by local finance firms.

Mounting pressure to heavily sanction Russia following the country’s alleged involvement in the poisoning of former spy Sergei Skripal this week led to Prime Minister Theresa May unveiling a series of retaliatory measures.

Amongst those were increased checks on private flights, customs and freight, a freeze on Russian state assets believed to be linked with criminal activity and a strengthening of the Anti-Money Laundering Bill – together forming part of a pledge to “bring all the capabilities of UK law enforcement to bear against serious criminals and corrupt elites.” 

“There is no place for these people, or their money, in our country,” she said.

But asked whether the island would respond in kind by Express, the Chief Minister’s Department declined to comment.

Pictured: Theresa May making her statement to the House of Commons. (parliamentlive.tv)

A Freedom of Information request stated that fewer than five Russian high value residency (formerly known as 11k) applications have been approved by Locate Jersey in the past year. But luxury property estate agents told Express that levels of enquiries were rapidly increasing, and that they expected more approvals to come.

A notable recent entrant was billionaire Putin ally and Chelsea FC owner, Roman Abramovich, who was recently reported to have been placed on a list of 96 ‘hostile Russian oligarchs’ by the US administration.

Gaudin & Co Partner Bradley Vowden told Express that there appeared to be an attitude shift in recent years, and that there were fewer reservations about welcoming new Russian residents than previously.

But amid increasing interest from Russians and heightening international scrutiny of the source of their riches, he questioned whether the government was sufficiently resourced to conduct the depth and volume of checks necessary to establish whether the root of their wealth was “white.”

Prime Minister Theresa May visited Salisbury today to thank the emergency services, doctors, nurses, and investigation teams who have led the response to the attack on 4 March 2018. pic.twitter.com/dCIZ9R5R7n

— UK Prime Minister (@10DowningStreet) March 15, 2018

“When you listen to the news at the moment and seeing what has just gone on in the UK, and the restrictions that potentially the UK government are going to enforce on the Russians – we’re talking about not wanting the oligarchs to come in – but we’re opening our doors. What KYC and due diligence are we doing? Are we protecting ourselves? The nature of their business is complex and could be corrupt in some way, shape or form. You let one in, you let two in, it’s linked to a business, so then they need to come in. Where does it stop?” 

But asked about whether the island was considering stricter checks on high value residency applicants, a States spokesperson simply responded: “Our systems of regulation and oversight are already very robust, and we have rigorous processes in place for vetting each and every application to relocate to Jersey under our high-value residency regime.”

They were similarly confident about the systems of financial regulation when it came to the island’s handling of Russian assets.

According to anti-corruption lobby group Transparency International, significant quantities of money linked with Putin-backed oligarchs flow through the Crown Dependencies en route to London.

Pictured: An anti-corruption lobby group said that Russian oligarchs often use Crown Dependencies like Jersey to transport wealth to London.

“London has certain advantages and Russians have always found London particularly attractive. It has these historic links with the Crown dependencies and overseas territories, so it is very easy to be part of that global laundering system. It is also a huge market in itself, so if you want to hide dirty money, it is easier to do,” a spokesperson said. 

According to a promotional Jersey Finance brochure, Jersey-incorporated companies with a majority of their business in Russia and former Soviet states have raised over $1.2billion from investment in London stock markets. 

Eight Russian companies – the majority of which are part of the mining industry – are registered in Jersey and listed on the London Stock Exchange. Those include Polymetal International Limited, United Company Rusal and Polyus Gold International.

Jersey Finance officials have also previously attended and sponsored Moscow-based events in a bid to highlight the island’s credentials.

Pictured: Amy Bryant, Deputy CEO at Jersey Finance, said that Jersey often followed sanctions imposed by the UK and UN.

Despite seeking to foster business and investment relationships with Russia, this hasn’t stopped the island from imposing sanctions in the past.

Responding to threats against Ukraine in 2014, certain individuals and businesses had their assets frozen and reported to the Chief Minister. Restrictions were also placed on exports and services related to military equipment and the sale and spply of technology related to the oil industry.

States officials would not reveal whether they were considering introducing any new sanctions. Deputy CEO of Jersey Finance, Amy Bryant, commented: ““We are not in a position to comment on recent events, but would reiterate that Jersey has very rigorous and thorough business on boarding requirements and fully implements UK and UN sanctions. We expect this policy to continue.”