Labour has unveiled proposals that it will bring to parliament in a bid to encourage the UK government to take “tougher action to drive out the malign influence of Russian money from Britain’s economy”.
At Prime Minister’s Questions on Wednesday, Keir Starmer announced that Labour would try to amend the economic crime bill to ensure that action against Russian oligarchs can be taken without delay.
The long-awaited piece of legislation has been introduced to parliament amid the Ukraine crisis, but its measures would not come into force for existing owners of UK property until 18 months after the bill is approved by legislators.
“Why are we giving [Vladimir] Putin’s cronies 18 months to quietly launder their money out of the UK property market and into another safe haven?” the Labour leader asked Boris Johnson, before offering “support to speed this up”.
Labour’s Jonathan Reynolds has written to the government asking it to back the opposition party’s amendments, which would require a new register of interests to come into force within weeks rather than the 18 months proposed by ministers.
Given the fast-moving situation in Ukraine, the Shadow Business and Industrial Strategy Secretary has warned that an 18-month delay “offers no deterrent now and gives oligarchs a window to escape sanctions”.
Labour MP Chris Bryant has claimed that Roman Abramovich, the Russian oligarch and Chelsea football club owner, is “terrified of being sanctioned” and rushing to sell his UK properties in order to avoid potential financial sanctions.
Abramovich announced on Wednesday that he is selling Chelsea FC. He said the sale would follow due process, he would not ask for loans to be repaid, and net proceeds will be donated to victims of the war In Ukraine.
Labour has also encouraged government ministers to back a change to the bill that would “bring forward reform to Companies House” and reveal the details of “Kremlin-backed shell companies, as well as property and land”.
The amendments seek to introduce “basic ID checks” in the new register of overseas interests for beneficiaries and to boost “transparency”, exposing the owners of UK property and those who “seek to hide behind shell companies”.
While Labour has criticised the government for repeated delays in bringing forward the legislation, first promised in 2016 and drafted in 2018, Reynolds said he was writing in a shared “unified and determined spirit”.
In his letter to Kwasi Kwarteng, Reynolds wrote: “In the spirit of ending malign influence in our economy, we hope that the government will support our amendments, which seek to strengthen our ability to hit Russian oligarchs as quickly and effectively as possible.”
Below is the full text of Labour’s amendments to the economic crime bill.
Commitment to bring forward reform of Companies House
- New clause
[38A] Further reforms to Companies House
(1) Not later than 28 days from when Part 1 of this Act comes into force, the Secretary of State must publish draft legislation for the purpose of making further reforms to Companies House, including to support the effective functioning of the register of overseas entities.
(2) The draft legislation must include –
-
- New powers for the registrar to aid the verification of foreign entities applying for registration as set out in section 4 of this Act;
- New powers for the registrar to better share data with enforcement agencies;
- Reforms that will improve the quality and veracity of the information on the register.
Explanatory note:
This new clause would compel the Secretary of State to publish draft legislation on reforms to Companies House, including reforms that would support the operation of the Act.
Reducing the transition period
Labour will amend the Bill to change the grace period in which foreign entities must apply to the register from 18 months to 28 days except for property bought before 1999, which are currently out of the scope of the Bill, to give the Government time to find a way of making sure pre 1999 purchases are also included in the final Bill to ensure all foreign owned entities are included on the register
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