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Thursday, June 30, 2022

Government failing to stem the tide of Russian money

The UK has a reputation as the world centre of money-laundering due to our lax regulations and the influence bought by 'dirty money', and that does not appear to be changing anytime soon, despite Ministers' so-called crackdown on Russian oligarchs.

The Independent says that MPs believe Boris Johnson‘s pledge to crack down on Russian dirty money in London will fail because of a lack of funding and expert staff.

They say that a Foreign Affairs Committee report has found that the prime minister’s “rhetoric” in quickly pushing through the Economic Crime Act – following the Ukraine invasion – is not matched by the “reality” of resources available, and they have demanded to know if action will be taken against wealthy foreign investors handed fast-track residency “without due diligence” before the scheme was hurriedly scrapped.:

The highly critical report, published on Thursday, called it “shameful” that it took the war for ministers to act and echoed previous warnings that the legislation does “not go far or fast enough”.

“The government’s rhetoric is not matched by reality,” said Tom Tugendhat, the committee’s Conservative chair.

“Sanctions against Russian individuals and businesses can only achieve so much. We need much more fundamental – and long-lasting – legislative changes to weed out the scourge of dirty money.”

The rising Tory star added: “New laws are only half the battle. Enforcement agencies need funding, resources and highly specialised staff in order to do their job effectively.”

The report warned against sanctions becoming a form of “criminal justice light” in which “assets are held indefinitely without subsequent prosecution”.

It recommended that authorities “now take advantage of the time these asset freezes provide to consider if there is a criminal case for asset seizure”.

The Queen’s Speech promised a further Economic Crime Bill to ensure “Putin’s cronies do not benefit from the UK’s open society”, following an initial crackdown after the invasion.

But fears have been raised that it will still be possible to “cloak the real property owners in anonymity”, using nominee directors and companies.

Crown dependencies and overseas territories are still enabling corruption and money laundering by resisting open registers of beneficial ownership of companies, critics say.

And Companies House allows 300,000 firms a year to be registered with no proper checks – in “moments, at minimal cost”, a former minister who quit over fraud warned.

The foreign affairs committee demands powers for the company registrar to verify information and to “remove corporate entities from the register for wrongdoing”.

On past failings, it states: “The government’s unwillingness to bring forward legislation to stem the flow of dirty money is likely to have contributed to the belief in Russia that the UK is a safe haven for corrupt wealth.”

So, once more the rhetoric is not being matched with action. In typical Boris Johnson style, the government is pursing polices that are all frills, and no knickers.
When Johnson and his party have had a 'love in' with Russian money for some time I can see Johnson acting but without putting teeth into the bill for he will loose the 'luxuries'he has been used to.
He also notes which way public opinion goes then heads to the front to say 'follow me'.His 'U turn' continuing whilst Russian 'goodies' ,that help Putin keep flowing into overseas accounts.
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