Graphic: The Daily Telegraph
How to kick our dependence on both
Quite rightly there’s a debate about how we kick European dependence on Russian gas. But what about the London’s dependence on the Russian gravy train? So much Russian loot is laundered through London that around the world our capital is known as Londongrad. So how did the government fail so badly to get a grip of Russian economic crime?
Problem No. 1 is the gaping hole where a plan for tackling economic crime should be. We know the scale of the problem because the National Crime Agency has told us. It says that the scale of economic crime is some £100 billion a year in money laundering and £190 billion lost to fraud—a total of £290 billion. That is a significant chunk of our nation’s GDP, so this is not an insignificant problem: it is a monumental problem over which the Government are presiding. Secondly, the reputational damage is so serious that think-tanks in Washington are writing reports saying things like:
“uprooting Kremlin-linked oligarchs will be a challenge given the close ties between Russian money and the United Kingdom’s ruling Conservative Party”.
How on earth has the Conservative party got itself into this mess?
Well, it is quite a story. I am going to rattle through the 10 key steps that have led the Government to get into this mess.
First, they abolished the Minister in charge of economic crime. When Damian Hinds was was appointed he was given the title of Minister for Security and Borders, whereas his predecessor was known as the Minister for Security and Economic Crime. So the Government are taking economic crime so seriously that they deleted it from the title of the Minister.
Secondly, the Government have now tasked not one, not two but 12 different agencies with tackling the problem of economic crime without going to the trouble of appointing someone to be in charge of these 12 different agencies so as to lead the charge.
Thirdly, they have neglected to implement 60% of the measures in their own economic crime plan. Going through the list of measures rated “red” by the Royal United Services Institute, some of them are pretty significant, such as making sure that the police get serious about tackling fraud and economic crime.
Fourth, the Government have starved the National Crime Agency of so many resources that its director general says that it will not take on cases where it thinks the legal costs will be too high.
Fifth, they have failed to equip Companies House with the powers to check information sent in by people setting up shell companies. According to Parliamentary answers to me, there are now 11,000 companies on the register that still have not filed returns on who is the person with significant control, yet how many prosecutions have we had? One hundred and nineteen. It is pathetic; it is lamentable.
Sixth, they have failed to bring forward a register of beneficial ownership of property, like the multi-million-pound mansions in Westminster. How we target sanctions at the right people if we don’t know who owns what?
Seventh, they have failed to use our unique role in the global financial economy to light up where bad actors are doing bad things. SWIFT, the financial messaging system, is based in the UK. We are the global hub, along with New York, of financial settlement worldwide. We could be using the panorama of information to which we have access to light up bad people, to create intelligence packages and then to ensure that those people are pursued to the ends of the earth.
Eighth, we have failed to stop our courts being used as arenas to silence journalists such as Catherine Belton and Tom Burgis, who are pursuing bad and corrupt companies. Thank God for HarperCollins and Arabella Pike because, frankly, without such brave publishing houses, we would not have the truth brought into the public domain.
Ninth, we have the Government’s failure to introduce a foreign agents registration Act, despite the fact that it works in America and Australia.
Tenth, to cap it all, they have failed to offer us any kind of hard timetable for the economic crime Bill, which is an omission so serious that they lost their own Minister to it in the House of Lords.
Those 10 elements—this 10-step decent into chaos—is why we now have a situation where the grand total of unexplained wealth orders targeted against oligarchs is zero. Apart from the Magnitsky sanctions, which came from a list of the crimes handed to us in 2007, we have not proposed any sanctions for economic crime against Russian-born individuals since 2014.
Some might say that is benign neglect; others might say it is malign neglect; and others might say that the Conservative party has been paid to look the other way.