Wagner Group: A lawsuit filed by the head of the group against a journalist pushes Britain to review financial sanctions laws

Sanctions were imposed on Prigozhin for the first time by the UK in 2020 in an effort to prevent anyone doing business with him.

But under a British law that defines Russia’s penal system, the provisions allow sanctioned people to cover their “essential needs”, including the ability to apply for a license and an exemption to pay legal fees.

These decisions are made by the Office of Financial Sanctions Enforcement, a division of the Treasury Department that reviews applications from people subject to financial measures.

Prigozhin successfully used this legal avenue to get the help of Discreet Law, a London-based law firm, to take legal action against Higgins, according to Opendemocracy, a British news website focusing on human rights.

Treasury Secretary James Cartledge told MPs on Wednesday that guidance on these exemptions was “long-standing” – but said the government was “now looking at whether this is the right approach and whether changes can be made”.

A Treasury spokesperson also said those applications were reviewed by officials without any political involvement – with Cartledge later telling the House of Commons “we are not aware of any decision made by a minister”.

Shortly before the lawsuit was filed, Higgins’ Bellingcat website recently ran a story naming Prigozhin, an ally of Vladimir Putin, as the man behind the Wagner Group.

He denied involvement even after the invasion began in February 2022, although he had previously been sanctioned by the UK government over the group’s activities in Libya in October 2020.

The journalist has been personally prosecuted in the UK for posting articles on Twitter to his publishing website and other media. It is believed that the decision to target it instead of Bellingcat was an act of intimidation.

Speaking to the BBC, Higgins called for more transparency about how the rules are being applied. He said he had to pay £70,000 in legal costs even though the case was dropped.

He said: The question for me is: What is the process? No one seems to fully understand that. Until there is more transparency, we cannot pass judgment on whether they have been properly applied.

“The next question is, do we want this kind of process where journalists can be prosecuted?”

And he added, “How do I know that some other oligarch will not do the same thing to me again next week? This time the costs were in the tens of thousands, but it could be in the millions and tens of millions next time.”

Discreet Law has been under investigation by the Legal Profession Regulatory Authority since May 2022, following an official complaint from Bellingcat.

Prigozhin is under sanctions by the United Kingdom, the European Union and the United States. It has been accused by Western governments of meddling in foreign countries’ elections using an online disinformation unit called the “Troll Factory”.

The 61-year-old emerged from a shadowy background. He worked as a street vendor of hot dogs and was serving a prison sentence for theft before becoming a key ally of Russian President Vladimir Putin.

Lucrative food supply contracts with the Kremlin have earned him the nickname “Putin’s chef”.

The Wagner Group has been accused of committing atrocities in Ukraine and took part in the recent operation to seize the town of Solidar.

The government confirmed it was conducting an internal review of the process after Labor won the right to ask it an urgent question in the House of Commons on Wednesday.

Shadow Foreign Secretary David Lammy said: “It appears the government has granted a concession to a warlord who has enabled him to launch a legal attack on a British journalist.”

He described Prigozhin as “one of the most dangerous members of Putin’s inner circle”. He said it would be “totally unreasonable” if the Treasury Department played a role in “easing the pressure” on the Wagner Group.

Lamy also noted that Rishi Sunak, the current British Prime Minister, was the Chancellor of the Exchequer at the time the application was granted by the Treasury.

Cartledge said decisions about such concessions are made “on the basis of costs” and that it was up to the courts to decide “the substantive merits of the case rather than the government”.

“But I can confirm that in light of recent issues and in connection with this question, the Treasury Department is now considering whether this approach is the right approach and whether changes can be made without Treasury taking unacceptable legal risks and ensuring that the rule of law is adhered to,” he added.

Cartledge defended the government’s record on sanctions and said ministers were committed to cracking down on individuals who use “threat tactics to silence free speech advocates acting in the public interest”.

Dr Sue Hawley, executive director of campaign group Spotlight on Corruption, said the waivers used in this case could leave British sanctions policy against the Kremlin “full of loopholes that would be a laughing stock and should be urgently reviewed”.

A Treasury spokesperson declined to comment on an individual case, adding: “Everyone has the right to legal representation, and the Office of Financial Sanctions Enforcement grants licenses to allow sanctioned persons to cover their legal fees, provided the costs are reasonable.”

Roger Gerson, founder of Discreet Law, told the Financial Times that his company had “at all times complied fully with its legal and professional obligations”.

The BBC has contacted them for further comment.