"Morally bankrupt billionaires using the UK as a safe deposit box"
30 June 2022
The Foreign Affairs Committee publishes its report The Cost of Complacency: illicit finance and the war in Ukraine.
- Read the report [HTML]
- Download the report [PDF 525B]
- Inquiry: Responding to illicit and emerging finance
- Foreign Affairs Committee
The Committee calls on 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, so far, 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”.
Enforcement and resourcing
Sanctions against oligarchs and those who support, or receive benefit from, the Russian Government are not in and of themselves enough. The Committee calls for consideration of whether prosecutions can be brought and whether criminal cases can be built. The report finds that legislation targeting enablers should be strengthened.
The report concludes that without the necessary means and resources enforcement agencies are toothless. The Committee calls for a substantial increase in funding and expert resourcing for the National Crime Agency, Serious Fraud Office and other responsible agencies.
The Committee calls on the Government to publish its long-awaited review of the Tier 1 Investor visa scheme. The Government should also explain what action will be taken in relation to those who were granted a visa without due diligence, particularly those who now hold permanent residency or British citizenship, and what action it has taken against those it has deemed to be a national security risk.
This is an interim report and the inquiry into illicit and emerging finance will continue.
Chair of the Foreign Affairs Committee, Tom Tugendhat MP, said:
“Dirty money brings corruption to our homes and turns our institutions against us. It attacks our society and our security. For far too long successive Governments have allowed malign actors and kleptocrats to wash their dirty money in the London ‘laundromat’. Complacency has left the door open to corrupt wealth taking root and morally bankrupt billionaires using the UK as a safe deposit box.
We first reported on the threat of foreign corruption in our 2018 report ‘Moscow’s Gold’. The Foreign Affairs Committee has called for a clampdown on the illicit finance that flows through our capital. It is shameful that it took a second invasion of Ukraine to force the Government’s hand.
While the Economic Crime Act is welcome, it is also long overdue. Current legislation does not go far enough and the Government’s rhetoric is not matched by reality. 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 international response to Russia’s invasion of Ukraine was laudable and we need to build upon the progress already made. Working closely with allies will be critical to the success of any new legislation, ensuring that dirty money has nowhere to hide.
But new laws are only half the battle. Enforcement agencies need funding, resources and highly-specialised staff in order to do their job effectively.
It isn’t just our financial legislation that needs a rewrite. Tier 1 Visas were golden tickets for wealthy investors, who were able to purchase access to the UK. The Government must do its due diligence to investigate all individuals applying for visas, no matter the size of their bank account.
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.”
Image: Adobe stock