Britain has launched a sanctions regime for people smugglers that it hopes will tackle a multibillion-dollar industry sending record numbers across its borders.
Officials are targeting gang leaders, corrupt police officers and companies selling small boat equipment for Channel crossings. Those involved in the trade in Europe, the Middle East and beyond face having their assets frozen and being banned from travel to the UK.
David Lammy, the Foreign Secretary, said sanctions introduced to target anyone involved in assisting illegal immigration to the UK would be imposed as soon as Wednesday.
The target group ranges from those involved in supplying and financing small boats, suppliers of fake passports, and middlemen putting cash through the hawala system, a legal money transfer system that enables the payments linked to Channel crossings.
The first wave of sanctions will publicly name anyone sanctioned, so it will be illegal for UK businesses and banks to deal with the so-called Mr Bigs of the trade.
First named
The measure is expected to include more than 20 designations, and could include corrupt public officials and police officers in steps to tackle the multibillion-dollar industry.
“For too long, criminal gangs have been lining their corrupt pockets and preying on the hopes of vulnerable people with impunity as they drive irregular migration to the UK,” Mr Lammy said. “We will not accept this status quo.
“That’s why the UK has created the world’s first sanctions regime targeted at gangs involved in people smuggling and driving irregular migration, as well as their enablers.”
Legislation under the Border Security, Asylum and Immigration Bill is designed to increase enforcement powers for police forces and partners to investigate and prosecute people smugglers.
New sanctions aim to target organised crime gangs wherever they are in the world and disrupt their flow of cash, including freezing bank accounts, property and other assets, to hinder their activities.
“It will allow us to target the assets and operations of people smugglers wherever they operate, cutting off their funding and dismantling their networks piece by piece,” said Home Secretary Yvette Cooper.
“There is no hiding place for those who exploit vulnerable people and put lives at risk for profit.”
Experts gave the announcement a cautious welcome as the latest statistics showed more than 23,000 migrants have crossed the English Channel since the start of the year. The rate is running 50 per cent higher than last year, despite government promises to “smash the gangs”.
“Targeting fixers and infrastructure suppliers aims to make them untouchable in the illegal migration business and represents a new front in the UK’s efforts to control a business model that brings profit to the enablers and misery to those caught up in this crime,” said Tom Keatinge, director of the Centre for Finance and Security at the Rusi think tank.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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