Top British lawyer who worked for Russian oligarch accused of creating sanction 'loopholes'

One of Britain’s leading QC’s has been accused of introducing “loopholes” into British sanctions law after working for a Putin-linked oligarch.

Lord Pannick QC proposed amendments to legislation in 2017 which allow the Government to act against oligarchs after representing Arkady Rotenberg, a close friend and judo partner of Vladimir Putin and one of Russia’s richest men.

The Government has blamed the “cumbersome” amendments to the Sanctions and Anti-Money Laundering Act 2018 for slowing down its sanction response to the invasion of Ukraine.

Concern over such cases has led to calls for greater transparency of interests in Parliament, where barristers are required to disclose their earnings but not necessarily those that they represent.

Lord Pannick said on Tuesday that he did not "legislate for loopholes" but ensured the Government followed the rule of law. He said he did not believe the amendments were responsible for delays.

Almost 100 oligarchs who have been sanctioned by the EU or US have not been penalised in Britain, which has only targeted 13 Putin allies since the invasion began.

A Bill to make it easier and quicker to impose tougher sanctions passed the Commons on Monday and is expected to become law later this month.

But as the Bill makes its way to the upper house, Matt Hancock, the former Cabinet minister, raised the fact that “many of the problems that we face today are due to amendments” made in the Lords to the 2018 Bill.

“It's subsequently come to light that many of those amendments were by those who are acting for oligarchs and then legislating for loopholes,” he told Parliament.

Mr Hancock did not name Lord Pannick but quoted the QC, who in a 2017 debate asked why “sanctions should be imposed on a person simply because they are connected to a specified country”.

Mr Hancock described the comments as “extremely unwise” and said that the reason the UK’s response was slow was “because the Sanctions and Anti-Money Laundering Act 2018 was riddled with holes” in the Lords.

He added: “I am surprised to discover that some of those who spoke so powerfully for putting loopholes in place, and who made the case for confusion and delay in law, are also those who stand to benefit from confusion and delay in law, and they do not declare this conflict.

“Simply declaring earnings from the Bar is not good enough. Parliamentarians should make their interests crystal clear so that there is no confusion around them when they legislate in this area.”

Amendments accepted by Government

Lord Pannick insisted on Tuesday: "I did not put forward amendments to "legislate for loopholes". I put forward amendments… to ensure that the Sanctions Act complied with basic requirements of the rule of law”.

He pointed out that the amendments were accepted by the Government.

Lord Pannick represented Rotenberg in 2014 and 2015 in his legal battle against the sanctions imposed on him by the EU over the annexation of Crimea.

The billionaire tycoon’s construction company was given a state contract to build a bridge between Russia and Crimea which the UK Government said “further undermines the territorial integrity of Ukraine”.

The case in the General Court of the European Union was “the first case in which someone has challenged the EU’s Russia sanctions regime”, lawyers working alongside Lord Pannick noted.

Lord Pannick also represented Rotenberg “on a sanctions point” in the Court of Appeal during a bitter divorce from his wife at around the same time.

The 70-year-old, who made most of his fortune through lucrative state-sponsored contracts for construction and oil pipelines, was also sanctioned in the UK and the USA in 2014.

Boris Rotenberg, his brother, and his son Igor have both been added to the sanction list because of the latest invasion.

The amendments to the earlier bill proposed by Lord Pannick and Lord Judge, the former lord chief justice of England and Wales, forced ministers to consider whether the sanctions were appropriate in all circumstances and required them to provide reasons for the sanctions.

Lord Judge has been a serving judge for several decades and is not said to have acted for any oligarchs.

Lord Pannick said that the changes “do not explain the fact that the Government has so far sanctioned so few Russians”, adding: “My understanding is that the reason why the UK has sanctioned so few individuals is because too few people are working on the details of imposing sanctions in the Foreign Office and in other Government departments.”

He accused ministers of “exaggerating the risk of our courts intervening in such cases” as the judicial review court was unlikely to intervene as long as their action had a “tenable basis”.

Lord Pannick added that he had not acted for Rotenberg since mid-2015 and it is the only sanction matter he has acted in at least the last 10 years.

“I saw no reason at the end of 2017 and early 2018 when the Sanctions Bill was debated to refer to one case in which I had advised and acted almost two and a half years earlier and in which I had no continuing role,” he told the Telegraph.

“The only other Russian oligarch for whom I have acted in the last 10 years is Mikhail Khodorkovsky, a prominent opponent of Putin.”