UK outlines measures to clamp down on Russian oligarchs using the ‘London laundromat’
The UK has announced a package of measures today to help ban corrupt Russian oligarchs from laundering their money in London, which will aim to force foreign owners of British assets to reveal their true identities.
Business secretary Kwasi Kwarteng said the package will stop “oligarchs and kleptocrats from Russia and elsewhere” who “have used the veneer of legitimacy provided by UK registered companies and partnerships”.
The new measures come in two stages, with Kwarteng today publishing a White Paper that will set out how the government intends to improve Companies House to transform the body into a “custodian of accurate and detailed information, ensuring we can clamp down on those who seek to use UK corporate structures to launder money”.
The second stage will come tomorrow when the government introduces the Economic Crime Bill to parliament.
The new legislation will see the government create a “register of overseas entities” that will force overseas owners of British assets to reveal their true identities to ensure criminals “can no longer hold property behind secretive chains of shell companies”.
This will mean that overseas agents can no longer create companies on behalf of “foreign criminals or secretive oligarchs”, Kwarteng said.
The legislation will also see the reform of limited partnership law, new government powers to seize crypto assets and reforms to help businesses share information on suspected money laundering.
“It is necessary that we put these criminals on notice and send a clear message that the UK will not tolerate their corruption here,” Kwarteng told MPs.
“These measures in a small, but significant, way will put pressure on kleptocrats and oligarchs who have abused our hospitality for their own nefarious purposes.”
London has become a hub for international money laundering, with the capital often called the “London laundromat”.
Transparency International says more than £1bn has been laundered by Kremlin-linked oligarchs and Russian organised crime gangs in the London property market since 2016.
Kleptocracy expert at Exeter University Professor John Heathershaw claims Kwarteng’s measures were a “short-term response” and at risk of yielding “half-baked reforms”.