City firms must ask more questions about the origin of some of their foreign clients’ funds, the former employer of a Russian lawyer who died in detention in 2009 said last week.
Jamison Firestone, managing partner at London legal consultancy FD Advisory, worked with Sergei Magnitsky, who died in a pre-trial detention in 2009 after accusing Russian police of complicity in a $230m (£140m) tax fraud. Magnitsky’s posthumous conviction for tax evasion caused international outrage last year.
Firestone told the Gazette that the UK has become a haven for money launderers. ‘Worldwide there are people who make their money from stealing from their own people – and participating in odious regimes that repress democracy and human rights. When do we start saying that we do not want these people here?’
He said: ‘[The UK] competes for this money. What lawyer does not want a big Russian case? London solicitors and banks are asking for this money.’
Under anti-money laundering regulations firms must enquire about the source of funds for payments made for litigation in the UK, but as long as they do not ‘know’ the funds are tainted they can be used to fund litigation, he said.
‘There should be more controls on solicitors to prevent them from taking money from clients if they are less than certain that the money is clean.’
He said London was an attractive choice for oligarchs locked in disputes with each other, as they view the UK’s courts as experienced and incorruptible. ‘It’s protection from the system that they created in Russia,’ he said.
Anthea Lawson, senior investigator at anti-corruption organisation Global Witness, accused elements of the legal profession in London of facilitating corruption.
‘I don’t think the legal profession is grappling with the issue. Lawyers see themselves as slightly apart, and are unwilling to see their profession as facilitating it.’
A spokeswoman for the Law Society said solicitors in the UK have been subject to anti-money laundering regulations for 10 years: ‘[Solicitors] are required to apply a risk-based approach to preventing money laundering and must carry out enhanced due diligence in any situation which can present a higher risk of money laundering or terrorist financing.’