Liz Truss is expected to name hundreds of oligarchs, individuals and organisations to be added to the UK’s sanctions list on Tuesday, after a fast-tracked bill is passed that will make it easier for ministers to impose sanctions on those with Kremlin links.
Whitehall sources said the UK’s sanctions list would soon be on a par with the European Union after the legal reforms.
Officials were also understood to be exploring potential sanctions on Russia’s federation council members, equivalent to the US Senate. The EU imposed sanctions on 146 members last week after they had voted to approve recognition of Luhansk and Donetsk in eastern Ukraine as independent states.
“Liz has moved heaven and Earth to get this legislation done. It transforms our ability to sanction Russia and go further and faster than before,” one government source said.
MPs and peers sat late into the night to ensure the passage of the economic crime bill, with ministers redrawing parts to close a number of loopholes that would allow oligarchs and kleptocrats to evade scrutiny under a new public register of beneficial interests.
After criticism in the House of Commons last week, ministers have proposed a series of amendments in the House of Lords to toughen up the bill, including a new proposal that wealthy owners who try to sell off property in order to avoid it being listed in the register will be forced to declare their details upon sale.
Some MPs had hoped to force the government to go further and slash the grace period for declarations to the public register from six months to 90 days – but ministers are expected to see off any potential rebellion with a pledge to revisit the grace period after a review.
The bill targets those who hide wealth in the UK, particularly through property purchases. These include those who might be seeking to shelter illicitly acquired money.
The bill will reform Companies House in an attempt to verify the identity of every company director and beneficial owner, with the aim of preventing criminals or kleptocrats from hiding behind a UK shell company.
Ministers have also scrapped the defence that owners will not have committed an offence if they claim not to have realised they have provided false information, as it must be given “knowingly or recklessly,” after objections in the Commons by the Labour MP Chris Bryant.
Those who make an unintentional false declaration will still be penalised, but not as harshly, according to the government’s new amendment.
The government has also accepted a Lords amendment to close a loophole first highlighted by the Liberal Democrat foreign affairs spokesperson, Layla Moran, which would have given the government the power to grant individuals an exemption from its registration requirements if it was in “the interests of the economic wellbeing of the United Kingdom.”
The government plans a second economic crime bill in the next parliamentary session, including further reforms of Companies House, in an acknowledgment that the fast-tracked bill is imperfect.
MPs and peers have expressed significant concern about the enforcement of the new requirements, as well as new sanctions and the low budget for implementation compared with countries such as the US.
The author and anti-corruption campaigner Oliver Bullough said there were numerous ways for oligarchs to get around the transparency declarations, including owning the offshore company in equal shares of 16.67% with five close relatives so none reach the 25% ownership level required to count as the person of “significant control”.
Bullough said falsified ownership records had also been used for decades – because there were little to no checks on the information provided.
