Boris Johnson on Friday said the UK would intensify pressure on “criminal elites trying to launder money on UK soil”, as the government announced amendments to its Economic Crime Bill with the aim of speeding up the process of imposing sanctions on oligarchs linked with Vladimir Putin’s regime in Russia.
The latest changes will allow the UK to align its sanctions package with other western allies, including the US and EU, through an urgent designation procedure. The amendments would remove the test of “appropriateness” for designations, enabling the UK to swiftly act against groups of individuals.
The move comes as the UK prime minister faced growing criticism over the pace of sanctions against individuals. The UK has issued restrictions on 12 oligarchs, while the EU has imposed sanctions on more than 25.
The legislation, which aims to crack down on the flow of illicit finance within the UK, includes the creation of a register of overseas entities to improve transparency within the property market and will strengthen unexplained wealth orders and the powers of the Office of Financial Sanctions Implementation.
Amendments, first reported by the Financial Times, will include the deadline for foreign companies to register their beneficial owners shortened from 18 months to just six.
An additional amendment will also strengthen criminal penalties for non-compliance, including fines — increased from £500 per day to £2,500 — and five-year prison sentences.
The legislation will be expedited through the House of Commons on Monday, the Foreign, Commonwealth and Development Office said.
Johnson said the latest proposals would mean criminal elites linked to Putin would have “nowhere to hide”.
Meanwhile, Liz Truss, foreign secretary, argued that the changes would allow the government to act “faster and harder” against those linked to Russia’s leader, adding: “Our message to Putin and his cronies has been clear from day one — invading Ukraine would have serious and crippling consequences.”
Truss has warned that the UK has drawn up a “hit list” of Russian oligarchs set to face sanctions. The government on Thursday froze the assets of Igor Shuvalov, Russia’s former prime minister, as well as Alisher Usmanov, founder of USM Holdings. The pair, who have a combined worth of £19bn, were also subject to travel bans as part of the measures.
The opposition Labour party welcomed the proposals but argued that the government ought to move more quickly against oligarchs and others tied to Putin’s regime.
“It is totally unacceptable that Putin-linked oligarchs who should have already faced sanctions are being allowed to move their money around because of government incompetence,” argued David Lammy, shadow foreign secretary.
“Ministers should have introduced the laws needed to work in lock-step with our allies and partners months ago, not be left sanctioning hundreds fewer individuals and entities than the EU and the US,” he added.
Some security experts warn that despite the amendments, those linked to Putin’s regime may have already taken advantage of the government’s delay.
“Over the past week, the UK has faced challenges operationalising its own sanction law for use against individuals despite the law being less than a month old,” said Tom Keatinge, founding director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute think-tank.
“These amendments suggest the government has to some extent thrown in the towel and will rely on the actions of allies to put in place these sanctions,” he added. “We can be certain that this unfortunate delay has been exploited by those who anticipate being in the government’s sanctions sights.”
