Britain fast-tracks economic crimes laws to target Russian wealth

Measures include forcing property owners to reveal their identities rather than hide behind shell companies

Campaigners say London's property market has been fuelled by dirty money. Reuters
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Britain is bringing forward planned new laws this week that will give the government powers to seized foreign wealth that has accumulated in the UK, particularly its property sector, to target the wealthy allies of Russian President Vladimir Putin.

The long-delayed Economic Crime Bill is being introduced on Tuesday to increase transparency over the ownership of multi-million-pound properties and to make it easier for police to seize what they believe to be criminal assets.

The legislation has been fast-tracked and follows complaints by many MPs that not enough is done to stop the flow of Russian money into London and spent on properties, luxuries and private schooling for the Kremlin-friendly elite.

The plans include a Register of Overseas Entities that requires the true owners of properties to reveal their identities rather than hide behind anonymous chains of shell companies.

"There is no place for dirty money in the UK,” said Prime Minister Boris Johnson. “We are going faster and harder to tear back the facade that those supporting Putin's campaign of destruction have been hiding behind for so long.

“Those backing Putin have been put on notice: there will be nowhere to hide your ill-gotten gains,” he said in a statement.

Those that fail to comply with the rules will have restrictions placed on selling property. Those who have broken them will face up to five years in prison.

The legislation will apply retrospectively to property bought by overseas owners up to 20 years ago in England and Wales and since December 2014 in Scotland.

Campaigners have long complained that opaque ownership rules and a network of complicit financial experts, bankers and estate agents have allowed "dirty money" to be pumped into the UK’s property market. More than £100 billion ($134bn) is believed to be laundered through the UK from all criminal sources every year, according to the National Crime Agency (NCA), which tackles serious and organised gangs.

One London home, owned by the family of Muammar Qaddafi but in the name of a British Virgin Islands front company, was seized in 2012 in a rare victory for authorities chasing looted money.

Referring to the bill on Sunday, Foreign Secretary Liz Truss said that officials had drawn up a “hit list” of Russians close to Vladimir Putin.

The government said the new bill would also help ensure that more “corrupt oligarchs” could be handed Unexplained Wealth Orders, which allows authorities to seize their funds without the need for a criminal conviction.

Only six of the orders have been used so far since they were introduced in 2018, as other new confiscation orders have proved more effective.

Some of the first UWOs have been locked in long and costly court battles and the new bill protects the authorities from paying high costs if cases are unsuccessful.

The Treasury is also strengthening its enforcement of the economic sanctions regime by introducing a less onerous burden of proof for investigators. A new "kleptocracy" cell based at the NCA, announced last week, will investigate sanctions evasions.

Only six fines have been issued since the Office of Financial Sanctions Implementation (OFSI) was set up in 2016, according to the Financial Times newspaper.

Updated: February 28, 2022, 11:44 AM