Treasury ‘helped’ Wagner’s Yevgeny Prigozhin to evade sanctions

The UK government helped the head of Russia’s notorious Wagner Group of pro-Kremlin mercenaries get around its own sanctions to launch a legal attack on a British investigative journalist, it has been alleged.

The incident occurred in the months before Russia’s invasion of Ukraine, while Rishi Sunak was chancellor, according to documents published by openDemocracy, a British media outlet that focuses on human rights.

Wagner is led by Yevgeny Prigozhin, a Kremlin-linked tycoon who is one of the most vocal advocates of President Putin’s war in Ukraine. The group’s fighters have been accused of decapitating a deserter from President Assad’s army in Syria and bludgeoning a former Russian convict to death with a sledgehammer in eastern Ukraine, as well as numerous other human rights abuses.

Speaking in the Commons yesterday, Kevin Hollinrake, a business minister, said the allegations that British legal firms helped Prigozhin to avoid sanctions would be looked at “very carefully” and would be “entirely unacceptable” if true.

Prigozhin was sanctioned by both the UK and the European Union in 2020, as well as by the United States in 2018. This precluded him from taking legal action in British courts but, with the help of a London-based solicitor, he sought a special licence from the UK Treasury to get around the sanctions, meaning he could launch a libel suit against Eliot Higgins, the founder of Bellingcat, openDemocracy said.

Bellingcat had angered Prigozhin with a report that outlined his shadowy operations, as well as his links to the Russian defence ministry and the Kremlin’s military intelligence service, Gru. Prigozhin denied any connection to Wagner until the start of the war, but now revels in his role. He recently opened a Wagner Centre office in St Petersburg. Washington said last week that it would designate Wagner as “transnational criminal organisation”.

Emails obtained by openDemocracy showed that despite Prigozhin’s reputation as a Kremlin warlord, the UK treasury granted licences for Discreet Law, a British legal firm, to work on the libel case. It also gave permission for its lawyers to fly business class to St Petersburg, Prigozhin’s hometown, to discuss it in person. The libel suit was part of Prigozhin’s efforts to thwarts global sanctions. Discreet Law worked with Prigozhin’s Russian lawyers, Capital Legal Services, the documents show.

The case was dropped after Putin ordered tanks into Ukraine in February, leaving Higgins with estimated costs of £70,000. OpenDemocracy said the case illustrated “the incredible ease with which one of the world’s most notorious warmongers was able to use the UK legal system to try and further his aims, even while sanctioned”.

Higgins said that UK officials were “embroiled in a scheme to undermine the very sanctions they were responsible for governing”. He added: “Wealthy individuals abuse the UK legal system to attack legitimate journalists with the assistance of British lawyers.”

Roger Gherson, the head of Discreet Law, told the Financial Times that the company had “at all times complied fully with their legal and professional obligations”. The Treasury said “everyone has a right to legal representation”.

Sunak is under pressure from a cross-party group of MPs to stop Russian oligarchs using British courts to silence and intimidate journalists.

Dominic Raab, the justice secretary, set out plans last year to introduce so-called anti-Slapp legislation after Catherine Belton, a distinguished journalist, was sued for libel by Roman Abramovich. The case ended with a settlement and Belton was awarded an MBE.

Yesterday, Bob Seely, a Tory MP, used parliamentary privilege to identify British lawyers who had worked for Russian clients including John Kelly of Harbottle and Lewis ,who represented Abramovich, and Geraldine Proudler of CMS, who represented Mikhail Fridman and Petr Aven.

He urged the government to support his bill which would make it harder for journalists to be pursued by Russian oligarchs.

“Unethical law firms offer a one-stop shop to spy, to snoop, to smear and to sue,” he said. “I think this as a business model is a form of legalised intimidation, effectively legal gangsterism . . . these noxious lawsuits are almost entirely motivated by the oligarchs’ motivation to curry favour with President Putin.”

Bellingcat identified the Russian spies who carried out the novichok poisonings in Salisbury in 2018. It also exposed the FSB agents who tried to kill Alexei Navalny, the Russian opposition leader, in 2020.

“It is absolutely ludicrous that the government stands accused of evading the sanctions it itself imposed,” said Dame Margaret Hodge, a Labour MP. “If this is true, why did parliament not know about it? Where is the accountability?”

The emails and documents cited by openDemocracy were the result of a series of hacks against over 50 Russian companies and government agencies after Russia’s invasion of Ukraine. OpenDemocracy said that while it did not know the identity of the hackers, it had no reason to doubt the authenticity of the information.

Wagner has recruited tens of thousands of convicts, including convicted murderers, for the war in Ukraine, offering them their freedom in return for a six-month tour of duty. His forces have played a key role in heavy fighting around the towns of Bakhmut and Soledar in eastern Ukraine.

An HM Treasury spokesman said: “We do not comment on individual cases. Everyone has a right to legal representation and the Office for Financial Sanctions Implementation can grant a licence to allow sanctioned people to cover their own legal fees, provided the costs are reasonable.”