LONDON - Russian money hidden in British assets and laundered through City of London financial institutions damages the government's efforts to take a tough stance against Moscow's aggressive foreign policy, a committee of lawmakers said on Monday.
Britain's financial center has been a major beneficiary of the massive flight of Russian cash since the 1991 fall of the Soviet Union, and London remains the Western capital of choice for the oligarchs and Russian officials who flaunt their wealth across Europe's most luxurious destinations.
But Britain has led an international diplomatic backlash against Russia following the poisoning of an ex-Russian spy in an English city - an attack which the government blames on the Kremlin. Moscow has denied any involvement in the incident.
A report by parliament's Foreign Affairs Committee said Russian money was undermining Britain's criticism of the Kremlin and supporting what it called a campaign by President Vladimir Putin "to subvert the international rules-based system."
"The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City," said committee chairman Tom Tugendhat.
"There is no excuse for the UK to turn a blind eye as President Putin’s kleptocrats and human rights abusers use money laundered through London to corrupt our friends, weaken our alliances, and erode faith in our institutions."