There is new hope in the fight against money laundering and corruption

Recently in New York, a significant step in the struggle against international corruption was taken. What I term the “global financial apartheid” is a phenomenon that threatens humanity no less than epidemics, wars and the climate crisis. As a man who has devoted twenty years of his life to this cause, hundreds of publications in the international press and several books, one of which was published last year in the UK, I feel obliged to tell you what happened.

At the UN HQ on 28 January, at a meeting launched by the General Assembly and the United Nations Economic and Social Council (ECOSOC), the creation of a high-level panel of experts on financial accountability was announced. While this may sound dull; the panel will be responsible for issuing policy recommendations to stem the flow of illegal money around the world. This is essential for the achievement of the UN Sustainable Development Goals and the eradication of poverty.

“Taxpayer funds should not be deposited in the accounts of corrupt officials in foreign banks or exported to offshore zones. This money must be found and returned to their countries of origin, where they must be used to create jobs, build hospitals, schools and roads. The solution to this problem will be entrusted to the new Group,” reads the UN communiqué.

Professor Muhammad-Bande, the Permanent Representative of Nigeria to the UN was clear that state budgets in the developing world have been ravaged of billions of dollars by fraud and corruption. This has slowed the pace of progress in these countries and the international nature of the problem necessitates cross-border cooperation.

Muhammad-Bande is more familiar with the subject than most. I would nevertheless permit myself to make one correction; this does not concern billions, but trillions of dollars. The compatriot of the chairman of the General Assembly, the former Nigerian dictator Sani Abacha, is estimated to have stolen up to $5 billion during his five-year rule.

Unlike the monarchies of the Persian Gulf, who used oil export revenues to develop their states, Abacha embezzled them and deposited them in his personal accounts in offshore banks. As a result, many people in one of the largest hydrocarbon-producing countries in the world live in extreme poverty. Since Abacha was poisoned, some say by soldiers or prostitutes in 1998, the Nigerian authorities have spent ten years in painful proceedings in Western courts to return just $1.6bn.

Nigeria is a classic example of a victim of this neo-colonial structure, wherein corrupt elites and bureaucrats in the developing world siphon stolen capital to offshore funds, then launder and invest it in major Western international financial institutions, acquiring real estate, yachts, airplanes, luxury goods and works of art.

As a citizen of Russia, I am pleased to note that my country has taken a leading role in the fightback. At the end of September last year, Svetlana Lukash, a Russian representative to the G20, addressing the UN High-level Dialogue on Financing for called for a mechanism to enforce the return of illegally obtained assets. As Lukash pointed out, the key conditions for the effectiveness of such a mechanism could be practical cooperation between state law enforcement agencies, disclosure of information about criminal assets in countries of origin and destination, and the development of principles for disposing of arrested, confiscated, and returned assets. Lukash expressed the hope that these initiatives will be supported by the Russia’s Brics partners (Brazil, India, China and South Africa), “for whom these issues are also a serious challenge”.

All this indicates that combatting dirty money has begun to occupy a position in global discourse worthy of the significance of the problem. More importantly, it is more than just words. Judges in UK are now hearing cases brought by Russian financial institutions.

In June last year, the High Court in London approved an order prohibiting Boris Mints, the co-founder of Otkritie Bank, as well as his three sons, from disposing of over half a billion dollars of assets. The Mints family have been accused of hatching a fraudulent conspiracy. They deny any wrongdoing and say all the relevant transactions were above-board. They issued a counter-claim in November 2019 seeking compensation for losses of more than £700 million arising from an “abusive campaign” against them. National Bank Trust and Okritie Bank are defending the counterclaim. The contested allegations are scheduled to be heard in arbitration proceedings next April. Russian authorities have now put out an arrest warrant for Mr Mints and two of his sons over the alleged embezzlement

While the judicial battle involving Mints is still in full swing, the scandalous history of National Trust Bank, about which I wrote in my book In Pursuit of the Stolen Trillion (published in English later this year), might be finished. This bank was hoovering up Russian clients’ money, hiring Bruce Willis for its advertising campaigns. “Tough guys – cool percentage rate!” enthused the Die Hard star in an advert for the bank.

After the collapse of the bank in 2014, it turned out that more than £1bn “disappeared”. Its co-owners – Ilya Yurov, Sergey Belyaev and Nikolai Fetisov – moved to the UK, where they serendipitously acquired fashionable real estate; a mansion in Surrey; a 16th-century family castle in Kent and flats in Chelsea.

During a long trial in the High Court in London, it was revealed that for many years Yurov, Belyaev and Fetisov falsified accounts and provided non-repayable loans to their own offshore companies from clients’ deposits. On January 23, 2020, the High Court in London ordered them to pay $900 million in compensation. They are reported to be considering appealing the ruling.

There is, of course, much work left to do. But recent shifts in the international political arena leave me to hope that one day, the world will find its stolen trillion.

Alexander Lebedev’s family co-own The Independent and Evening Standard titles