Tory MPs have urged Boris Johnson to revive a long-awaited economic crime bill — designed to crack down on the flow of dirty money to the UK — after the legislation was hit by further delays.
John Penrose, the government’s anti-corruption champion, said on Friday the prime minister should accelerate the bill to send out a signal to Vladimir Putin, the Russian president, over Ukraine.
“London’s financial markets are a huge economic asset, but they’re also magnets for dirty cash and, with Russian troops on the border of Ukraine, Putin will be looking for any signs of weakness that we aren’t serious about threats to sanction his oligarchs,” he said.
“The legislation to plug all these gaps . . . has been promised for years and, if we postpone it yet again, at the moment when the rubber is really hitting the road, no one will believe we’re serious.”
The bill was expected to include crucial reform of Companies House to crack down on the abuse of shell companies as well as powers to unmask the real owners of offshore companies that own UK property and tougher powers to challenge kleptocrats’ unexplained wealth.
The reforms have won cross-party support owing to widespread concerns about the £100bn in dirty money that the National Crime Agency estimated has been channelled through the UK from countries, including Russia, and the rise in fraud related to Covid-19 state support.
A 2020 government report said “corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds.”
Lord Theodore Agnew wrote in the FT that the economic crime bill had been “foolishly rejected” last week after he resigned as a Cabinet Office minister on Monday over the government’s record in tackling Covid-related fraud.
The bill was recently put before the Parliamentary Business and Legislation Committee, chaired by leader of the House of Commons Jacob Rees-Mogg, as a contender for the Queen’s Speech in May which will set the legislative agenda for the 2022-23 parliamentary session.
But government insiders said the committee, which assesses the government’s legislative priorities, had decided the economic crime bill should be “pushed down the list.”
Kevin Hollinrake, a Conservative member of the Treasury select committee, said it appeared that ministers wanted to prioritise other measures with “more mass appeal” instead. “But it is not right that this is being delayed,” he said. “We need to demonstrate to the public that this is something that affects everyone, it’s really important.”
Campaigners have also called for the bill to include a long-awaited reform of corporate criminal liability, in order to more easily prosecute corporates for economic crime.
Officials said on Friday that the government could still change its mind and accelerate the legislation given the unfolding situation on the Ukraine border.
Johnson’s pledged last month to make 2022 a “year of action” on fraud with anti-corruption groups warning that outdated laws and under-resourced law enforcement agencies have made the UK a haven for illicit finance.
Sue Hawley, executive director of Spotlight on Corruption, said on Friday: “UK companies are the vehicle of choice for the mafia, kleptocrats — including people linked to Putin and Russian security services, fraudsters and organised crime because of the lax rules at Companies House.”
She added: “Real vulnerabilities in our defences against fraud, money laundering and organised crime are undermining the UK’s reputation as a clean place to do business.”