The UK will level tough sanctions on Russian oligarchs close to Vladimir Putin if he invades Ukraine, Liz Truss has said.
The foreign secretary said she would next week introduce legislation in parliament that will “target more Russian interests that are of direct reliance to the Kremlin” and that the sanctions would come in place even if it damages the British economy.
Truss said the UK would also send 1,000 more troops to Nato member Estonia and more warships to the Black Sea as fears continue to mount that Russia will soon invade its neighbour.
The City of London has long had a reputation as a haven for money laundering for foreign governments and organised crime, with the capital known as the so-called “London laundromat”.
Speaking about the potential new Russian sanctions, Truss told Sky news: “Currently, the economic sanctions are fairly narrowly drawn, so we could only target companies with a direct involvement in destabilising Ukraine.
“What we are looking to do is widen that so any company of interest to the Kremlin and the regime in Russia would be able to be targeted, so there will be nowhere to hide for Putin’s oligarchs, for Russian companies involved in propping up the Russian state. That’s what we are looking at doing this week.
“Nothing is off the table and we’re not going to do into details of exactly who and how we would target the sanctions. What the legislation enables us to do is hit a much wider variety of targets so there can be nobody who thinks they can be immune to those sanctions.”
Truss said the UK would not be afraid to bear the costs of shutting out potentially billions of pounds from the City, while also warning that Putin that an invasion of Ukraine risks becoming a “quagmire”.
“The most important thing is defending freedom and democracy and that is more important than immediate financial issues,” she said.
“We cannot favour short term economic interests over the long term survival of freedom and democracy in Europe – that’s the tough decision that all of us have got to make.”
A 2020 report from parliament’s Intelligence and Security Committee into Russia’s involvement in UK politics called for the government to crackdown on the London Laundromat.
In 2016, parliament’s Home Affairs Committee report estimated that around £100bn of illicit money was being laundered through the London property market each year.
Foreign Affairs Committee chair, and Tory MP, Tom Tugendhat wrote in City A.M. on Friday that the UK must shut down the London laundromat.
“Leaders in Moscow have used [the City of London] to stash their holdings overseas. Billions have gone west from those who profit from the instability they cause, but want to ensure they are immune from the consequences,” he said.
“The money hidden in accounts and properties is used to undermine the security of the UK and the British people.”