Combating Kleptocracy: Lessons from the Response to Russia’s War in Ukraine

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Two years on from the invasion of Ukraine, this paper explores the state of efforts to combat modern kleptocracy before February 2022 and assesses how the Kremlin’s war has catalysed a range of responses from Western allies.

The increased focus on countering kleptocracy following the full-scale Russian invasion of Ukraine in February 2022 has involved the deployment of dedicated sanctions programmes against Russia by Ukraine’s allies. These programmes have triggered a dramatic increase in the rate of designations of individuals and entities and have led to a greatly increased commitment of resources and activity across a range of countries. This commitment also includes an increase in legislative, regulatory and operational capacity to enhance the response to modern kleptocracy more broadly. While the fight against kleptocracy did not start here, the shock of Russia’s unprovoked aggression confronted Western leaders with the reality of their apathy over preceding decades.

‘Modern kleptocracy’ refers to acts of kleptocracy occurring in the modern financial age, particularly in the past two decades, benefiting from the globalisation of finance. There is no doubt that significant energy, time and resources have been deployed, overdue legislation has been introduced, and the lower evidentiary threshold of sanctions (rather than criminal prosecution) has been used to disrupt kleptocrats connected with the Russian government. However, this paper concludes that focus must be sustained to achieve the ultimate goal of confiscating assets and dismantling the architecture that facilitates kleptocratic activity, whatever its source.

Modern kleptocracy is not unique to Russia. Funds stolen from national exchequers across the world, funds that should be spent on health care, education and sanitation, continue to find their way into real estate and other investments in Western financial centres. Governments must ensure that their efforts do not suffer from the tunnel vision brought on by a crisis and must instead facilitate long-term internationally coordinated and concerted action to combat modern kleptocracy in all its forms.


WRITTEN BY

Tom Keatinge

Director, CFS

Centre for Finance and Security

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