MPs have today accused “morally bankrupt” billionaires of using the UK as a “laundromat” for illicit finance despite a slew of fresh sanctions.
In a new report: “The Cost of Complacency: illicit finance and the war in Ukraine”, the foreign affairs committee urges the government to act now, while sanctions against Russia are in place, to tackle the flow of illicit finance through London.
The committee finds that the government’s rhetoric of “clamping down” has not been matched with constructive action.
The report concludes that the government’s lack of willingness to bring forward legislation stemming the flow of Russian money has directly contributed to the UK’s status as a safe haven for corrupt wealth. It is “shameful that it has taken a war to galvanise the government into action”.
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The committee argues that sanctions against oligarchs or those who support or receive benefit from the Russian government are not sufficient. Their report suggests that they examine whether prosecutions could be brought and whether criminal charges can be built. The report states that legislation should be strengthened to target enablers.
The report concludes without the necessary resources and means enforcement agencies are toothless. It urges for an increase in funding and expert resource for the National Crime Agency and Serious Fraud Office.
The committee requests that the government publish the long-awaited review on the Tier 1 Investor visa program. The government should also provide details on what it will do about visa holders granted without due diligence, especially those with permanent residency or British citizenship, as well as what it has done against those it deemed to be a threat to national security.
The report is an interim one, and the committee’s inquiry into illicit and emerging finance is ongoing.
Tom Tugendhat MP, chairman of the foreign affairs committee, stated today: “New laws are only half the battle. Enforcement agencies require funding, resources, and highly-skilled staff to do their job effectively. It isn’t just our financial legislation that needs a rewrite. Tier 1 Visas were a golden ticket for wealthy investors. They allowed them to buy access to the UK. No matter the size of a person’s bank account, the government must investigate all visa applicants.
“Allowing illicit finance to fester has wide-ranging ramifications, corroding trust in our institutions and undermining national security. The UK’s status as a safe haven for dirty money is a stain on our reputation. The government must bring legislation in line with the morals of the British people and close the loopholes that allow for such rife exploitation.”
A spokesperson for the government stated Politics.co.uk in light of the report: “There is no place for dirty money in the UK, not least that linked to Russia. We have taken tough action to combat illicit finance. This includes tightening enforcement and transparency requirements to target corrupt elites. We also set out our plans earlier this year to go further to punish anyone who attempts to abuse the financial system.
“We are one of the most active countries in financial sanctions enforcement in the world and our experts are on constant alert to combat the threat.
“In lockstep with our allies, the UK has been tightening the ratchet with ever stronger sanctions against Russia since day one of Putin’s war. We have kept up the largest and most severe economic sanctions that Russia has ever faced, and have tripled the size of the FCDO’s sanctions team to enable that”.