A new Bill to crack down on dirty money in London has been criticised as feeble by the author of a study on the power of Russian oligarchs and kleptocrats.
The Queen’s Speech promises an Economic Crime Bill to “ensure Putin’s cronies do not benefit from the UK’s open society”, following Russia’s assault on Ukraine.
But Oliver Bullough said the legislation is on course to fail in a central task to precent the registration of hundreds of thousands of rogue firms at Companies House.
The author of ‘Butler to the World: How Britain became the servant of tycoons, tax dodgers, kleptocrats and criminals’ accused ministers of sprinkling “a little bit of sparkly crypto-dust” over existing regulation of the agency.
Branding Companies House “a sink of filth”, Mr Bullough said: “There are already laws regulating it, the problem is that they’re not enforced.
He tweeted: “If this was a real Economic Crime Bill it would come with promises of vastly greater resources for the National Crime Agency, Serious Fraud Office and City of London police.
“There is no point passing laws if you don’t also provide resources for them to be enforced. It’s like buying guns without also employing solders.”
An initial Economic Crime Bill was rushed through in the last parliamentary session, ending years of stalling by the government after Russian tanks invaded Ukraine
Ministers acknowledged its weaknesses by admitting a second Bill will be needed, to “tackle illicit finance” and to “crack down on the kleptocrats, criminals and terrorists”.
Fears have also been raised that it will still be possible to “cloak real property owners in anonymity”, using nominee directors and companies.
Crown dependencies and overseas territories are still facilitating corruption and money laundering by resisting open registers of beneficial ownership of companies, critics say.
Companies House allows 300,000 firms a year to be registered with no proper checks – in “moments, at minimal cost,” a former minister who quit over fraud warned.
The government said the Bill would:
* Give the Registrar of Companies more powers to become “a more active gatekeeper over company creation and custodian of more reliable data”.
* Introduce identity verification for people who run companies, to improve the accuracy of Companies House data.
* Create powers to seize and recover crypto assets, which are “the principal medium used for ransomware”.
The campaign group Transparency International UK was more positive, calling the announcement of the legislation “heartening”.
“For too long the UK’s lax company registration system has been open to abuse by those seeking to launder the proceeds of crime and corruption, said Duncan Hames, its director of policy.
“The changes in this Bill would represent a significant step toward ending Britain’s role as a global hub for dirty money, but far more will need to be done if we are to stop the corrupt and other criminals using this country as a safe haven for their ill-gotten gains.”
