All Russian Co-operative Society

The All-Russian Co-operative Society (ARCOS or ARKOS, Russian: АРКОС) was the principal body responsible for orchestrating Anglo-Soviet trade in the early days of the Soviet Union, following the development of Vladimir Lenin's New Economic Policy.

[5] In addition to handling the transmission of funds used in the import and export trade, Arcos Bank issued traveller's cheques for those visiting the USSR.

[5] The suspicions of MI5 that Arcos was acting as a cover organisation for espionage activity were first aroused in 1925 when John Ottaway had tailed a suspect back to the Moorgate offices.

The chief of this room then attempted to pocket a list, which on inspection detailed cover addresses used for secret communication with the communist parties of the North and South American, African and Australasian continents.

[12] In an attempt to provide justification for the raid on Arcos, Prime Minister Stanley Baldwin read aloud in the House of Commons from a handful of deciphered telegrams, specifically one mentioning Comintern agent Mikhail Borodin, that proved Soviet guilt of espionage.

[13] Baldwin admitted that these telegrams were not acquired in the Arcos raid,[14] but stated they were evidence that the Soviet Union was using the organisation for the conduct of "military espionage and subversive activities throughout the British Empire and North and South America".

They adopted the virtually unbreakable one-time-pad system, therefore eliminating the ability of the British GC&CS to decipher any high grade Soviet messages from 1927 until the end of the Second World War.

The official White Paper containing the documents found in the raid was thin evidence indeed, and led to no arrests or charges for illegal or subversive activities by Russian or British subjects.