On Monday, the House of Commons considered the Economic Crime Bill, which will create a register of overseas entities, broaden the scope of Unexplained Wealth Orders to target corrupt elites, and strengthen our ability to take actions against sanction breaches.
In light of Russia’s actions in Ukraine, it is important that we move to flush the use of illicit finance and ill-gotten gains out of the UK’s economy. Further measures will be brought forward in due course.
There are several key measures in this important piece of legislation. It creates a register of overseas entities – ensuring criminals cannot hide behind secretive chains of shell companies. The Register of Overseas Entities will apply to property bought in England and Wales by overseas owners in the past 20 years – or since December 2014 in Scotland – and will require anonymous foreign owners of UK property to reveal their true identities.
It broadens the scope of Unexplained Wealth Orders – ensuring they apply to a greater number of corrupt oligarchs. This will require entities to declare the beneficial owners of properties held in trust, increasing the time available to law enforcement to review evidential material, and protecting law enforcement agencies from incurring substantial legal costs during their investigations.
It applies broader and more enforceable sanctions – making it easier to hold responsible those who back Putin’s path of destruction. We are intensifying sanctions by introducing the more wide-ranging ‘strict civil liability test’ for monetary penalties (rather than the current ‘reasonable cause to suspect’ test), while allowing the Office for Financial Sanctions Implementation to publicly name organisations breaching sanctions.
Separately, the UK is establishing a new ‘kleptocracy’ cell in the National Crime Agency – helping to investigate those attempting to evade our sanctions. This new cell will prevent, catch, and punish those who seek to avoid the economic sanctions we have placed on them.
This piece of legislation will ensure that shell companies, trusts, and complex legal arrangements can no longer be used to anonymously abuse our property sector, and our law enforcement agencies will have more powers, resources, and time to crack down on those who seek to launder dirty money through the UK.