Dirty Russian money must be taken out of the UK in days, not months. The Government must side with Labour on the Economic Crime Bill and send a clear, united message – Putin backed oligarchs are not welcome in our economy.
The Government has today brought forward their Economic Crime Bill to Parliament. I welcome the need for this type of bill as we desperately need to bolster the UK’s defences against corrupt Russian money.
The National Crime Agency estimates that £100bn of dirty money washes through the UK each year, much of it funnelled into our country via opaque legal structures used by those profiting from the Russian regime and laundered through our property market.
I welcome the Government’s decision to bring forward legislation to set up a register of overseas entities holding UK property and land and their beneficial owners. Labour has been calling for these measures for years and have consistently raised the alarm about the role of Kremlin backed capital in the UK and the lack of action from the Conservative government. That alarm has reached fever pitch as the unprovoked and unjustifiable Russian invasion of Ukraine continues at horrific human cost.
The Conservatives first promised a register of overseas ownership in 2016 and draft legislation has been in the public domain for this since 2018. It is deeply frustrating that the Government has dragged their feet on stopping dirty money flowing through our economy and that it took the invasion of one of our allies before they finally acted.
Our country is respected across the world as a prime financial destination, but sadly it has also become the destination of choice for Russia’s kleptocrats under this Government. Britain has a completely deficient system of corporate registration that permits layers of secrecy in which those who prop up Putin and the Russian state are hiding. Transparency International research has shown that UK property worth £1.5 billion has been bought since 2016 by Russians accused of corruption or links to the Kremlin.
This is not simply a matter of targeting individuals or entities through sanctions but about fixing a broken system that helps to sustain Putin's invasion of Ukraine. Britain’s openness to fraud and money laundering, inadequate regulation of political donations, lax mechanisms of corporate governance, and weakness to foreign interference threatens our national security.
I am deeply concerned that the Bill contains an 18-month transitional period before which any foreign entity needs to apply to join the register. By including a transition period this legislation offers no deterrent now and gives oligarchs a huge window to escape sanctions. Labour wants the obligation to register to come into effect within weeks, not years and that is why we have tabled an amendment to tighten the net on Putin’s cronies now by shortening the grace period to 28 days.
We cannot give oligarchs a head start - dirty Russian money must be taken out of the UK in days, not months. The Government must side with Labour to protect our security and show solidarity with the people of Ukraine by taking the action needed to send a clear, united message – Putin backed oligarchs are not welcome in our economy.