Launch of Economic Crime Manifesto II
The All-Party Parliamentary Groups on Fair Business Banking and Anti-Corruption & Responsible Tax have today published a landmark new ‘Economic Crime Manifesto’.
The document sets out what any future government must do to tackle the UK’s ‘economic crime crisis’, which is still costing the UK economy £350 billion a year, according to some estimates.
The Manifesto recommends that a future government:
· Further strengthen transparency so that we can follow the flow of dirty money. To achieve this, we must:
§ Implement existing legislation and insist on public registers of beneficial ownership in the UK’s Overseas Territories as well as push the UK’s Crown Dependencies to honour their commitment and establish public registers. It is unacceptable that legislation from six years ago has not been implemented and these tax havens remain hubs for money laundering and tax evasion.
§ The Register of Overseas Entities should publish information on the owners of UK properties. At present, the owners of 45% of properties in the UK owned by foreign entities hide their identity behind opaque trust structures. This loophole is being exploited by oligarchs and kleptocrats.
§ Insist that all companies provide complete information on beneficial ownership to our corporate register - Companies House. At present English, Welsh and Irish Limited Partnerships are excluded and this loophole is being taken advantage of by money launderers.
· Introduce smart regulations to deter wrongdoing and end the UK’s dirty money culture. To achieve this, we should:
§ Extend the Government’s new ‘failure to prevent’ offence to include all companies and create a new offence to cover money laundering, making it clear that professionals can have no part in enabling economic crime.
§ Introduce criminal liability for senior decision makers in companies if they have willingly, or through sheer negligence, allowed companies to engage in economic crime. Both these measures will provide a strong incentive for all professionals to change their behaviour and tackle the UK’s dirty money culture.
· Properly resource chronically under-funded enforcement agencies without placing an additional burden on the taxpayer. Delivered by:
§ Creating a ringfenced ‘Economic Crime Fighting Fund’ that can reinvest fines secured and criminal assets confiscated to fund further enforcement activity. It is scandalous that prosecutions for fraud have fallen by 67% since 2011 and prosecutions for money laundering have fallen by 56% since 2010.
· Strengthen the UK’s crumbling sanctions regime. The overhaul must begin by:
§ Closing the loopholes that allow Russia to continue to export and trade oil products with the UK and its allies.
§ Stopping sanctioned individuals from hiding their assets and wealth - often transferred to trusts, transferred to relatives, or held in a UK tax haven – from enforcement agencies so to sidestep sanctions.
§ Providing global leadership on the seizure of frozen Russian state and individual assets, and repurposing these assets for the reconstruction of Ukraine.
· Restore accountability to boost dwindling public trust in the UK’s key political institutions. This can be delivered by:
§ Extending the current regulatory framework to include all lobbyists. 96% of lobbyists work outside the current regulatory framework and cannot be held accountable.
§ Strengthen the Electoral Commission and increase its powers so it is an independent and effective watchdog. Political parties should be compelled to rigorously check the sources of their donations and the Electoral Commission should be able to prosecute wrongdoing.
§ There should be a new Select Committee of both Houses of Parliament to oversee the UK’s efforts combating economic crime and corruption, working under Privy Council terms.