Bankers react after call to freeze corrupt Russian funds

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Financier Bill Browder, who wrote the bestselling book Red Notice about his experiences with the Russian authorities, this
week called on Jersey to introduce a ‘Magnitsky Act’.

The original piece of legislation, introduced by the US Congress in 2012, imposed asset freezes and travel bans on a number of Russian nationals suspected of involvement in the death of anti-corruption lawyer Sergei Magnitsky.

Mr Browder lobbied the US government to introduce the act following the suspicious death of Mr Magnitsky in a Russian prison in 2009. Mr Magnitsky had been investigating a £230 million tax fraud involving Russian government officials.

Similar ‘Magnitsky Acts’ have been approved by the governments of Canada, the UK and the Baltic states, and this week, in the States, Senator Philip Ozouf raised the question of whether Jersey should also follow suit.

Mr Browder endorsed such a move, claiming that Jersey could help freeze the assets of corrupt oligarchs held in offshore companies and trusts in Jersey and in the other Crown Dependencies of Guernsey and the Isle of Man.

A spokeswoman for Jersey Finance, which represents the Island’s financial services industry, said that whether the Island introduced Magnitsky Act-style legislation was ‘a matter for the elected representatives and the Government of Jersey’.

She added, however, that there was business of Russian origin in Jersey, so the industry would be affected by such a move.

‘Jersey Finance is committed to working together with partners and authorities, including the Government of Jersey and the JFSC, to prevent financial crime, and the industry will absolutely comply with legal obligations placed upon it in relation to its interactions with other countries,’ she said. ‘This includes Russia, which comprises less than two per cent of our total business.’

She added: ‘Jersey remains one of the best-regulated international finance centres globally and is recognised as such by the likes of the Organisation for Economic Co-operation and Development, the International Monetary Fund, World Bank and MONEYVAL.

‘To be clear, our systems of regulation and oversight are already very robust, and we have rigorous processes in place for vetting each and every piece of business booked here. Those standards are vital to our future success.’

Mr Browder gained international fame after Red Notice was published in 2015. The book is an account of how he was deported from Russia and his lawyer, Sergei Magnitsky, was allegedly beaten to death in a prison cell.

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