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Russian rouble crashes due to sanctions as UK cracks down on oligarchs' 'dirty money'
28 February 2022, 08:54 | Updated: 28 February 2022, 10:15
The Russian rouble has crashed after the West introduced crippling sanctions against Putin, with the UK also cracking down on the so-called "dirty money" of billionaire oligarchs.
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The value of Russia's currency was down around 30 per cent against the US dollar at one point, as the country's invasion into Ukraine continues to increase tensions across the world.
It was trading at a record low of 105.27 per dollar (approx. £79) - down from about 84 per dollar (£63) late on Friday.
However, in a bid to fight back against the plummeting rouble, Russia's central bank sharply raised its key interest rate from 9.5 per cent to 20 per cent on Monday.
It came as Putin put nuclear deterrent forces on alert - apparently as a response to the sanctions in place.
Russia's banks were cut off from an international transaction system as well as other financial institutions being hit.
The US, European Union and UK all agreed to block selected Russian banks from the Swift system, which moves money around thousands of banks and other financial institutions worldwide.
Japan joined the move over the weekend, with restrictions on the Russian central bank targeting its access to more than $600bn (£450bn) in reserves which the Kremlin has at its disposal.
“Back to USSR”. Bank runs are starting in Russia: line to one of many ATMs pic.twitter.com/vSA3SvTdDf— 𝕄𝕒𝕩 𝕊𝕜𝕪 🇺🇸 🇺🇦 🇮🇱 (@_lordmax_) February 27, 2022
It follows the UK Government's decision to fast-track its plans to tackle "dirty money", amid Russia's ongoing invasion in Ukraine.
Ministers will table the Economic Crime (Transparency and Enforcement) Bill in Parliament on Tuesday, which will establish a new register of overseas entities.
The move is intended to expose foreign oligarchs who launder their money through the UK's property market.
It will mean foreign owners of properties in the UK will need to declare their true identity, ensuring criminals cannot hide behind secretive webs of shell companies.
Those that fail to comply will have restrictions placed on selling the property, while those who are found to have broken the rules will face up to five years in prison.
bank run in Russia is on scene. this will be written in textbooks— dd (@tomyrisd) February 27, 2022
Boris Johnson said: "There is no place for dirty money in the UK. We are going faster and harder to tear back the facade that those supporting Putin's campaign of destruction have been hiding behind for so long.
"Those backing Putin have been put on notice: there will be nowhere to hide your ill-gotten gains."
In a further move, the Government is also set to publish a detailed white paper ahead of a second Economic Crime Bill, setting out a reform of Companies House.
It will mean anyone setting up, running, owning or controlling a company in the UK will need to verify their identity before moving forward.
Officials will also be given the power to challenge information that appears dubious, and will be empowered to inform security agencies of potential wrongdoing.
It will include measures intended to prevent company agents from overseas creating companies in the UK on behalf of foreign criminals or secretive oligarchs.