The UK has one of the world’s largest and most open economies, with the City of London enjoying an outstanding reputation as a global financial centre and attractive destination for overseas investors.
With all global financial centres, the sources of many financial flows have become more complex and challenging. Dirty money and illicit finance have become the norm for many overseas investors, including the kleptocrats linked to President Putin, who have funded his illegal war in Ukraine.
Wednesday marks the Independence Day of Ukraine as well as six months since Russia launched its war on the country. In that time, this Government, including my department, has taken unprecedented action to stifle the finances behind the Kremlin’s war machine.
We have led our international partners by implementing the strongest set of economic sanctions ever imposed against a G20 country.
In the UK, we’ve sanctioned more than 1,100 individuals and over 100 entities linked to the Russian state, including over 120 oligarchs with a combined net worth exceeding £130 billion. This has led to their assets being frozen, them and their family members hit with travel bans, and their business interests restricted.
I have led the support for the National Crime Agency by establishing the Combating Kleptocracy Cell, to enforce sanctions on Kremlin-linked entities as well as target the sectors that facilitate their criminal transactions. This has prompted many Russian kleptocrats to divest their UK wealth as they realise the UK will never be a haven for their corrupt financial practices and assets.
Our Economic Crime Act now forces any foreign company buying properties in the UK to give information about their true owners to Companies House - clamping down on shady shell companies.
The Act also removed key barriers to the use of Unexplained Wealth Orders by extending the time law enforcement agents can investigate the origins of suspected criminals’ wealth. These tools are additional to the host of powers available to recover the proceeds of crime.
The UK remains a global leader in tackling economic crime. Long before Putin’s invasion, we were judged by the global standard setter - the Financial Action Task Force - to have one of the most robust records on anti-money laundering in the world. Since 2006-07, nearly £1.3 billion of the assets recovered under the Proceeds of Crime Act 2002 has been used to fund law enforcement and other work that protects the public from harm.
But the Russian invasion has placed a harsh spotlight on many global vulnerabilities, including the tradecraft associated with illicit finance in our own country. If we are to protect our homeland, then we must continue to drive out the corrosive practices that undermine our institutions.
I have been clear about the need to go after those criminals even harder and make them pay for their corruptly-obtained assets. I want law enforcement to make much greater use of powers to seize any UK assets linked to criminality.
We’ve invested £400 million over the next three years to tackle economic crime. This will enhance the intelligence capacity in the NCA so they can progress vital complex criminal investigations and put some of these kleptocrats, as well as the lawyers, property agents and accountants who enable them, behind bars.
We won’t stop there. Our upcoming Economic Crime and Corporate Transparency Bill will reform Companies House to halt the use of thousands of UK companies as vehicles for facilitating international money laundering.
The Bill will do more to prevent abuse of limited partnerships, ensure targeted information sharing to tackle money laundering and economic crime, introduce new intelligence gathering powers for law enforcement, and give extra powers to seize suspect crypto assets - which are increasingly used by organised criminals in destructive ransomware attacks. We will also publish a new Economic Crime Plan with an even greater focus on tackling kleptocracy and sanctions evasion.
Putin’s assault on Ukraine has shown the true extent of the international financial flows linked to Russia and the serious risks this poses to our country. We will never cease in our determination to change our laws to root out corruption, dirty money and protect our national security.
