By Oliver Windridge
Executive Summary
The UK Government has announced several sanctions designations against corrupt individuals as part of an ambitious new campaign to crack down on kleptocracy across the globe.
The recent designation of Angolan kleptocrat Isobel dos Santos is one of hundreds of confidential enforcement dossiers submitted by ILP to sanctions authorities on behalf of Global South civil society groups and campaigners. ILP provides dedicated, tailored legal support on every aspect of a sanctions designation, from training to legal strategy, dossier compilation, as well as advocacy and briefings to officials to secure a final designation.
In this blog post our Senior Counsel, Oliver Windridge, examines this encouraging announcement, and argues that to be successful this campaign needs an “inside/outside” approach, requiring the UK to look domestically as well as internationally to curb illicit finance.
The UK Government took a significant step forward in the battle against corruption, launching its new anti-kleptocracy campaign, with Foreign Secretary David Lammy promising “to take on kleptocrats and the dirty money that empowers them”. ILP sees this action as an important moment for UK foreign policy and could see the UK get serious at last about no longer acting as a “Butler to the World” - a safe harbour for the ill-gotten gains of the world’s most corrupt. This is important, because kleptocracy isn’t just the grey area between licit and illicit finance, it is a driver of instability and poverty across the world. Far from just hiding shady money in shady places, whether it's the funding of militia, empty pharmacy shelves or a lack of textbooks in schools, corruption is often at the heart of conflict, and lack of proper investment and development across the world.
To be successful, however, this new kleptocracy campaign must adopt an “inside/outside” approach. The “inside” requires the UK to grasp the nettle on its own role in kleptocracy. The UK must accept that it plays a significant role as a destination for billions stolen from developing country public funds. No longer can the UK accept the acquisition of multi-million-pound properties via opaque ownership structures as a victimless consequence of being an international financial hub. Put simply, we cannot hope to impact the issue of kleptocracy internationally if we cannot clean up our own back yard. The Foreign Secretary has talked of this process, of London property no longer being the “Bitcoin of kleptocrats” - this is positive. However, it requires deep institutional change on a scale that requires not only ambition, but consistent application. This will mean taking an uncompromising approach to tackling the UK’s dirty money problem, including toughening up on ownership transparency laws, embarking on renewed efforts around the UK’s Overseas Territories and Crown Dependencies, and tackling the regulated sector’s involvement as enablers of kleptocracy. That’s complex, ambitious stuff but to unpick decades of decay requires a big effort. The past two weeks has seen the UK Government make good on those commitments with two tranches of targeted sanctions on individuals involved in corrupt activities, the welcome announcement of Dame Margaret Hodge as the government’s new Anti-Corruption Champion, and commitments to significantly increase funding for National Crime Agency’s International Corruption Unit. In the space of two weeks arguably more has been achieved than in the past two years.
The UK Government’s designations over the last few weeks were led by the welcome news of sanctions on eight individuals involved in corruption via the UK’s Global Anti-Corruption sanctions regime. This was followed by a thematic approach to sanctions – the UK Government’s first - with the designation of several individuals involved in the illicit gold trade. These actions demonstrate what is hopefully renewed courage to use a key kleptocracy tool in a more ambitious way.
Part of that first tranche of announcements was the designation of Isabel dos Santos, the daughter of former Angolan President Jose Eduardo dos Santos, who remained in power for 33 years. Africa’s first female billionaire, dos Santos, who is said to have embezzled at least £350 million, “epitomises a system that concentrates power and wealth in the hands of the few”. The designation of dos Santos could therefore serve as a watershed in response to kleptocracy. This action means dos Santos will be subject to asset freezes which prevent any UK citizen or business in the UK from dealing with dos Santos’ funds or economic resources whether they are owned or controlled by her. It also means dos Santos will be subject to a travel ban, meaning she will be refused entry or leave to remain in the UK, subject to a few exceptions. These sanctions will therefore have a significant effect on dos Santos’ ability to travel to and undertake business within and with UK individuals and entities. As ILP argued in its 2023 report “A Journey of 20: An Empirical Study of the Impact of Magnitsky Corruption Sanctions” those individuals most reliant on the international financial system will feel the most impact. The same can be said for UK sanctions, meaning these designations are likely to bite. In particular, given previous reports of significant property ownership in the UK, including a mansion in South Kensington, her education at an elite British private school, and dos Santos’s preference for fine dining in London, this could be of particular impact on her ability to maintain her preferred lifestyle. But the impact of this designation should be considered not just in terms of current restrictions but also the potential impact this has on future business deals. Add to this, the impact of such a high-profile designation in Angola itself, where many citizens have remained sceptical about the potential for any form of accountability.
Of equal importance could well be the targeted sanctioning of two of her closest allies; the enablers that assisted her in amassing her corrupt fortune. In Journey of 20, ILP recommended the designation of corporate networks to maximise impact, something ILP continues to advocate for across the globe. The designation of her “friend and business partner” Paula Oliveira and her Chief Financial Officer Sarju Raikundalia demonstrate ambition to tackle the networks that often surround corruption. If this trend continues, it exhibits a network approach to using available domestic tools to best address the “outside” element of any kleptocracy campaign. This approach is most relevant where networks are closely linked to international financial markets, since such networks will feel the bite of sanctions to a higher degree.
Whilst sanctions are an integral part of challenging kleptocracy, the UK Government’s new campaign on illicit finance must also include further investment in law enforcement in the UK, to allow for the proper investigation and prosecution of often extremely complex cases, by suitably skilled professionals. The news that the UK Government is committing to £36 million of support for the National Crime Agency’s work on corruption is a welcome step in this regard. It also requires additional international efforts to support those fighting against kleptocratic regimes. This could mean an increased capacity to support domestic law enforcement and Financial Intelligence Units (FIU) across the globe. For civil society, whether in or adjacent to the countries where grand corruption rules, activists and organizations work tirelessly to investigate and report on corruption that affects them most. This support is also a smart investment, as it is often the evidence uncovered by these groups that can help bring successful sanctions and law enforcement cases. International Lawyers Project works closely with many local civil society groups to amplify their voices in the corridors of power where this campaign will be led. ILP helps groups to get their work into the hands of those who can use it to combat kleptocracy inside and out, through the provision of training, legal and advocacy support to ensure their work has maximum impact.
Lastly, any such initiative will need support from the UK’s allies. Kleptocracy tools such as targeted sanctions are optimized when actioned multilaterally. This means sharing intelligence, strategising across borders and acting in unison wherever possible. In the case of dos Santos, this hasn’t been the case, with the US opting only for visa restrictions in 2021 whilst the EU has yet to take any action. This demonstrates the patchwork nature of sanctions that can lead to designated individuals and entities choosing to simply move assets into “safe” jurisdictions. The reality is that the UK serves as a hub for kleptocracy, but that to make a real impact we need to see as many hubs as possible acting in unison to shut out illicit activity.
As a London MP, David Lammy, has talked about the fight against grand corruption being deeply personal. The same can be said for the millions living under the rule of kleptocratic regimes across the world. For too long, previous UK governments have turned a blind eye to illicit financial flows and the reality that these funds support conflict, humanitarian crises and instability across the world. This new campaign should be welcomed. The marker is now being laid down: the world watches on.
International Lawyers Project will continue to support those working on kleptocracy across the world. For more information on how we can help, please contact us.
Oliver Windridge is an international lawyer with over 15 years’ experience specialising in anti-corruption, business and human rights, sanctions, international human rights, and international criminal law. Prior to joining ILP, he worked at the United Nations, including in the trial and appeals chambers at the International Criminal Tribunal for Rwanda and International Criminal Tribunal for the former Yugoslavia.
Oliver has served as independent counsel, consultant and advisor to numerous civil society organisations, bar associations, regional bodies and individuals. At ILP he is focused on how emerging tools in the anti-corruption and accountability space, such as sanctions, can be best utilised alongside more established forms of accountability.
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