Source · Select Committees · Foreign Affairs Committee
Recommendation 4
4
Accepted
Paragraph: 14
The Government’s unwillingness to bring forward legislation to stem the flow of dirty money is...
Conclusion
The Government’s unwillingness to bring forward legislation to stem the flow of dirty money is likely to have contributed to the belief in Russia that the UK is a safe haven for corrupt wealth. It is shameful that it has taken a war to galvanize the Government into action. The measures in the Economic Crime (Transparency and Enforcement) Act 2022, while welcome, do not go far or fast enough and do little to address the fundamental mismatch between the resources of law enforcement agencies and their targets. Although Ministers have spoken eloquently in the House about the need to clamp down on kleptocrats, rhetoric has not been matched by constructive action. Meanwhile, corrupt money has continued to flow into the UK.
Government Response Summary
The Government notes this conclusion and states that it is already taking action, including setting up the Combatting Kleptocracy Cell in the National Crime Agency (NCA) and sanctioning over 1,100 Russian individuals linked to the Kremlin regime.
Paragraph Reference:
14
Government Response
Accepted
HM Government
Accepted
The Government notes this conclusion. International illicit financial flows linked to Russia and dirty money, including from Russia, being laundered in the UK pose serious and dangerous risks to our national security. Since the invasion, we have set up the Combatting Kleptocracy Cell in the National Crime Agency (NCA), which focuses on targeting corrupt elites through their assets hidden in the UK, targeting the professional enablers of these corrupt elites, and supporting criminal cross-HMG sanctions delivery and enforcement. Working under an FCDO-led designation regime, the UK has sanctioned an unprecedented and world-leading number of oligarchs (over 1,100 Russian individuals) linked to the Kremlin regime. We will continue to work closely with G7 partners to ensure there is nowhere for dirty Russian money to hide, including through the US-led Russian Elites Proxies and Oligarchs (REPO) Task Force. The NCA has already surged additional officers to support existing efforts and will further enhance the Cell to progress these complex criminal investigations. The Economic Crime (Transparency and Enforcement) Act 2022 was passed through Parliament at expedited pace. The Act allows the Government to move faster and harder The cost of complacency: illicit finance and the war in Ukraine: Government Response 5 when sanctioning oligarchs and businesses, creates a Register of Overseas Entities for foreign companies owning or buying property in the UK, and improves the effectiveness of Unexplained Wealth Orders. This legislation was being used to sanction individuals within hours of it coming into force. economic crime. Building on the above legislation, the Economic Crime and Corporate Transparency Bill will include reform of Companies House, reforms to prevent abuse of limited partnerships, additional powers to seize cryptoassets more quickly and easily, and reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime. All of this will be supported by the Spending Review 21 settlement and the Economic Crime Levy, which, as mentioned in response to recommendation 3, represent an overall package of around £400 million to tackle economic crime over the next three years.