On Monday, the United Kingdom unveiled plans to combat “dirty money,” adopting new regulations aimed at “hobbling” Russian President Vladimir Putin by making it more difficult for individuals connected to him to use London as a playground.
The long-awaited Economic Crime Bill arrives as legislators from all parties call on the government to do more to stem the flow of Russian wealth into London, called “Londongrad” by some, in retaliation to Putin’s invasion of Ukraine.
However, anti-corruption groups claimed that without extra funds, law enforcement authorities would struggle to force property owners to reveal their identities and reinforce unexplained wealth orders.
Interior Minister Priti Patel told parliament that the new law demonstrates the government’s “will to root out the corrupt money in our economy, and, more crucially, to hamstring Putin and his cronies.”
The most significant measure, according to Duncan Hames, head of policy at Transparency International UK, is a new register forcing anonymous foreign owners of British property to divulge their identity in order to prevent some from sheltering behind shell companies.
“It is a seismic change it will bring into open ownership of firms that are registered elsewhere in the world, and in that respect, it is truly bold and ground-breaking,” he added. “However, it is not enough to set good regulations; you must commit to implementing them.”
London has long been a popular destination for Russian money, and Prime Minister Boris Johnson has promised to take action against individuals who use the metropolis as a luxury playground, staying in high-end hotels and sending their children to fee-paying institutions.
After the invasion of Ukraine, Johnson has been chastised for taking too long to implement sanctions and asset restrictions on Russian oligarchs and people close to Putin’s administration.
Since Johnson seized office, the main opposition Labour Party has received roughly 1.9 million pounds from Russian contributors, implying that the ruling Conservative Party is in the thrall of Russian funders. Officials of the Conservative Party claim that the party does due diligence on all donations and only accepts those from British people.
After accusations that it was taking too long to target those with ties to Putin, the administration denies there is any delay in applying sanctions, but says it wants to make sure it has sound legal grounds to back them up.
Five high-profile Russians have had their villas in Italy’s most renowned locales, such as Lake Como, and yachts worth 143 million euros taken, while a yacht belonging to Rosneft CEO Igor Sechin has been seized in France.
According to Transparency International, Russians accused of wrongdoing or having ties to the Kremlin purchased property worth 1.5 billion pounds. Offshore corporations own around 830 million pounds of this total.
The new law would establish the Register of Overseas Entities, but will give anonymous foreign property owners six months to reveal their true identity – a step critics say gives them too much time to relocate assets elsewhere.
Some lawmakers urged the government to go even further, urging ministers to authorise the seizure of British assets from oligarchs suspected of having ties to Putin before sanctions were implemented. The government was unlikely to go that far.