Source · Select Committees · Foreign Affairs Committee
Recommendation 5
5
Rejected
Paragraph: 29
UK's lax financial crime enforcement enables Central Asian kleptocratic autocracies
Conclusion
Illicit finance is an integral component of autocratic rule in Central Asian countries. The UK is a key node for Central Asian capital flight and a leading enabler of its corrupt elites. While the UK is careful not to interfere with the internal affairs of Central Asian countries by challenging the legitimacy of their autocratic regimes, the continuance of an underenforced financial crime prosecution system in the UK constitutes an undeclared interference in the form of facilitation of kleptocratic autocracies.
Government Response Summary
The government disagrees with the conclusion, stating that proceeds of corruption are unwelcome in the UK. They detail significant measures undertaken, including passing the Economic Crime Acts of 2022 and 2023, and creating a new NCA unit to combat kleptocracy, asserting these measures harden the UK against illicit finance.
Paragraph Reference:
29
Government Response
Rejected
HM Government
Rejected
Disagree 20. The UK has one of the world’s largest and most open economies, and London is one of the world’s most attractive destinations for overseas investors. These factors make the UK attractive for legitimate business, but also expose the UK to money laundering risk. The proceeds of corruption and kleptocracy are not welcome in the UK. Following the full-scale Russian invasion of Ukraine, the Government has accelerated its pre-existing efforts to tackle illicit finance. In particular, we have: • Passed the Economic Crime (Transparency and Enforcement) Act 2022. These reforms included a new register of Overseas Entities to require those behind foreign companies that own UK property to reveal their identities; • Passed its successor, the Economic Crime and Corporate Transparency Act, in October 2023. This Act introduces world-leading powers which will allow UK authorities to proactively target organised criminals, the biggest reform to Companies House in its 180-year history, and new powers to deal with strategic lawsuits against public protection, known as SLAPPS, involving economic crime; • Created a new unit within the National Crime Agency, the Combatting Kleptocracy Cell, which is focused on targeting corrupt elites and their wealth in the UK. 21. These measures will harden the UK against all forms of illicit finance entering this country. The Government’s wider crackdown on money laundering is detailed in full in the 2023 Economic Crime Plan 2. 22. Separately, the FCDO is working with the Home Office to undertake an internal analysis of Serious and Organised Crime (including drugs) and illicit finance risks in Central Asia to inform HMG’s future response.