Source · Select Committees · Foreign Affairs Committee
Recommendation 15
15
The FCDO has vast experience, through the merger with DFID, of running illicit finance programmes...
Recommendation
The FCDO has vast experience, through the merger with DFID, of running illicit finance programmes internationally and gathering critical intelligence to assess security risks. The FCDO should be present at the table in international fora on illicit finance, such as the Financial Action Task Force. Appointing a Minister for Economic Security with cross-Whitehall responsibility for the multiple strands of work on countering corruption would go some way to demonstrating the Government’s commitment to ending kleptocracy in the UK. It would provide meaningful accountability to Parliament for delivery of a comprehensive strategy. The Government should study lessons from US legislation such as the ENABLERS Bill currently before Congress, and the Countering America’s Adversaries Through Sanctions Act (CAATSA) for protections which could be aligned with UK legislation. (Paragraph 38) Conclusion
Government Response
Not Addressed
HM Government
Not Addressed
Addressing economic crime and security is a shared priority across government, and we agree on the importance of robust oversight and accountability to ensure coherence and impact. There is effective governance of these efforts, principally through the Economic Crime Delivery and Strategy Boards which are ultimately overseen by the Chancellor and the Home Secretary. The position of the Prime Minister’s Anti-Corruption Champion has been complementary to this governance and has helped to galvanise UK efforts to combat corruption. We will continue to review and strengthen governance arrangements and note the Committee’s recommendation. HM Treasury leads the UK delegation to the FATF. HM Treasury draws on the expertise of relevant departments and agencies including the FCDO to inform its engagement at the FATF to achieve the Government’s commitment to tackling the transnational challenge of illicit finance. The FCDO supports HM Treasury by, inter alia, providing insights from UK overseas missions on relevant illicit finance developments, and by engaging with authorities in host countries responsible for tackling illicit finance. HM Treasury and FCDO regularly discuss FATF policy issues and other illicit finance issues with an international dimension, alongside a range of other departments and agencies including but not limited to the Home Office, HMRC, the Financial Conduct Authority, and the National Crime Agency. The Government notes the Committee’s recommendation that the Government closely monitor and learn from illicit finance developments in the US. The Government’s response to economic crime and sanctions implementation was recognised by the Financial Action Task Force in 2018 as the strongest of over 120 jurisdictions assessed globally. In particular, the FATF assessed that UK law requires transparency of ownership of legal persons including companies and legal arrangements including trusts, and that UK law provides sufficient anti-money laundering and counter terrorist finance obligations on professional sectors such as lawyers, accountants, real estate agents, and trust and company service providers. We recognise, however, that we need to go further to strengthen our response to illicit finance. To build on our position of strength, the Government closely follows international efforts to tackle economic crime and to improve the effectiveness of sanctions, and regularly exchanges best practice with partners and allies to improve our collective response to common threats. Home to the world’s two biggest financial centres, the US and the UK are close allies in the fight against illicit finance. We have regular dialogue with the US Government about legislation and policy initiatives under development in both the UK and US, sharing best practice and insights on how to strengthen our respective responses to countering illicit finance. Multilaterally, we work alongside and learn from the US and other international partners in the G7, the Russian Elites Proxies and Oligarchs (REPO) Task Force, the Five Eyes Law Enforcement Group, and through follow-up to the Summit for Democracy.