Wednesday, March 02, 2022

Tacking economic crime and dirty money

This week the UK government has brought forward the Economic Crime Bill – cracking down on economic crime and dirty money in the UK following Russia’s invasion of Ukraine. 

  • In light of Russia’s appalling invasion of Ukraine, it is imperative that we move forward with firm action to flush the use of illicit finance and ill-gotten gains out of the UK’s economy.
  • That is why the government is bringing forward the Economic Crime Bill, which will create a register of overseas entities, broaden the scope of Unexplained Wealth Orders to target corrupt elites, and strengthen our ability to take action against sanctions breaches. The government has also introduced a Corporate Transparency and Register Reform White Paper – delivering comprehensive reform of Companies House.
  • This legislation will help to crack down on economic crime – preventing foreign owners from laundering their money in the UK’s property and financial sectors.  


Paul Holdsworth said...

Despite Russian oligarchs and kleptocrats routinely laundering their dirty money through their associates and relatives, rather than splashing it around themselves, your party is still hiding behind the fig-leaf that it has received no funding direct from Russian oligarchs - ignoring the questions we're all asking about eye-watering sums being accepted by your party from those self-same associates and relatives.

P.S. If you don't want to be challenged robustly on some of the hagiographic quotes from aspiring Tory party leaders and anodyne, CCHQ-sanctioned posts on your blog, Chris, just say so. I seem to be getting around 20% of my comments past the "Chris Whiteside Objectionable Material" filter at the moment, if that.

Chris Whiteside said...

Following the actions of the Putin regime over the last few years, particularly in Syria and Ukraine, it is clearly high time for a fundamental reappraisal of our attitude to that regime and other corrupt regimes: that reappraisal is happening and is already producing strong action.

Legislation is being put on the statute book which will be there after this crisis has come and gone.

Our dispute is with Putin and his puppets, not with every Russian: the fact that someone who is now a British citizen was born in Russia or has Russian ancestors does not automatically prove that they are an ally of Putin or their money is dirty - even Bill Browder had a Russian grandmother and even some former allies of Putin have been his opponents for years.

But we do need to have greater transparency on money from Russia. The Economic Crime Bill and other measures being put in place will do this.

The new legislation will help the National Crime Agency prevent foreign owners from laundering their money in UK property and ensure more corrupt oligarchs can be handed an Unexplained Wealth Order (UWO).

The new register will require anonymous foreign owners of UK property to reveal their real identities to ensure criminals cannot hide behind secretive chains of shell companies.

Those who hold property in the UK in a trust will be brought within scope and the definition of an asset’s ‘holder’ will be expanded to ensure individuals can’t hide behind opaque shell companies and foundations.

The reforms will remove barriers to the use of UWOs by increasing time available to law enforcement to review evidence and reforming cost rules to protect law enforcement agencies from incurring huge legal costs if they bring a reasonable case.

This will make it easier for the Office for Financial Sanctions Implementation (OFSI) to impose significant fines..

The Register of Overseas Entities, introduced in this week's legislation, will apply retrospectively to property bought by overseas owners up to 20 years ago in England and Wales and since December 2014 in Scotland.

These new measures are being introduced as one part of Britain's response to tackle the scourge of economic crime in the UK and will safeguard our reputation as a clean and safe place for legitimate investment.

In addition, the government has published a detailed White Paper setting out its plans to upgrade Companies House, which will mean:

* anyone setting up, running, owning or controlling a company in the UK will need to verify their identity with Companies House
* Companies House will be given the power to challenge the information that appears dubious, and will be empowered to inform security agencies of potential wrongdoing
company agents from overseas will no longer be able to create companies in the UK on behalf of foreign criminals or secretive oligarchs

Reform of Companies House will form part of further legislation which will be introduced in the coming months via a further Economic Crime Bill to clamp down on illicit finance and improve corporate transparency, which will include:

* new powers to seize crypto assets and bring them within scope of civil forfeiture powers to tackle the growing threat from ransomware and crypto money laundering
* strengthened anti-money laundering powers

A new ‘Kleptocracy’ cell based in the National Crime Agency is being set up immediately to investigate sanctions evasion.

I think there will and should be more to come, but if Putin thought he had bought the government in London, the fact that it is both sending weapons to the Ukranians and enacting these measures demonstrates pretty clearly that he hasn't and it's a good start on making sure neither he not any other corrupt foreign tyrant can do it in the future.

Paul Holdsworth said...

It would be great to see some action from the government on this, after years of delay. But your long reply only contains aspirations for future action. You say it is "high time" for change. It's not, it's way past time.

You say the government is "bringing forward" the Economic Crimes Bill. Nonsense. The Bill has been delayed for years. Lord Agnew resigned over the endless delays. And there is no indication your party will return any of questionable funding it has taken from associates and relatives of Russian oligarchs.

BTW, I didn't know the Tories had accepted funding from Bill Browder, and I certainly didn't know anyone was asking for its return.

Chris Whiteside said...

There is action on this and the legislation is likely to be fast-tracked through the Commons on Monday with bipartisan support.

Yes, I would accept that it would probably have been better if some of these legislative measures had been brought forward sooner - I think all four of the largest parties in the UK have been complacent in the past about money coming into London from corrupt elites overseas. I also welcome the fact that all four parties appear to have woken up to this and that there is general cross-party support for these measures and, I hope, for further ones.

I have seen it suggested that this may have a "mirror clause" added enabling us to immediately copy sanctions imposed by our allies the USA and the EU and I would strongly support this because unified and co-ordinated sanctions will be far more effective.

The Conservative party only accepts money from UK citizens who have to be on the electoral register, and declares all sums over the £5,000 requirement to report to the Electoral Commission. It's not the openly declared donations from British Citizens that are the problem, it's the hidden money and especially funds held by shell companies whose ownership is secret. That is what the new legislation will uncover, and yes, it is past high time.

I think you know perfectly well that I was not suggesting that Bill Browder has given money to the Conservative party. As far as I know, he hasn't. I gave him as an example of someone with some Russian ancestry who used to do business in Russia but who nobody in their right mind could accuse of being a crony of Putin.

Paul Holdsworth said...

It's bizarre how comments fail to be published on this blog, for no apparent good reason. My second post on this thread was submitted a while back, got completely ignored, but then, when I resubmitted it in exactly the same terms, it appears after all! There is absolutely nothing in there that could be considered offensive or libellous, and the fact that it (eventually) got published suggests Chris feels it is a constructive contribution to the debate.

I can only conclude that Chris Whiteside moves in mysterious ways, his wonders to perform...

Chris Whiteside said...

The reason for the delayed publication on that one was the final sentence which gave what we might politely call an ironic misinterpretation of what I had written about Bill Browder.

I eventually concluded that this final sentence, unhelpful though it was, didn't justify blocking the contribution to debate made by the rest of the post, but it took me longer to come back to it than I had intended when I first saw it. If you want an apology for the delayed decision, you can have one.

Chris Whiteside said...

I am thinking about how this blog should develop going forward including how the comments function operates.

There are thoughts relevant to comment both which have appeared on this thread, and to those which I have not accepted, on the post about the future of the blog which appears at