Released on Monday (21 May), a UK Foreign Affairs Select Committee Report called Moscow’s Gold: Russian Corruption in the UK, accuses Russian oligarchs as using London as a base to hide corrupt assets.
“The Government responded robustly to the attack on Sergei Skripal and his daughter, Yulia, in Salisbury in March 2018.
“But despite the strong rhetoric, President Putin and his allies have been able to continue ‘business as usual’ by hiding and laundering their corrupt assets in London.
“These assets, on which the Kremlin can call at any time, both directly and indirectly support President Putin’s campaign to subvert the international rules-based system, undermine our allies, and erode the mutually-reinforcing international networks that support UK foreign policy,” the committee says in the report.
To combat this corruption, the report says the UK Government must show stronger political leadership in ending the flow of dirty money into the UK.
BOTs must step up
One of the key measures suggested to combat this corruption is that the UK Government must “do everything in its power” to make sure BOTs adopt public registers of beneficial ownership.
On 1 May, the UK government backed an amendment to the Anti-Money Laundering Bill that will force BOTs to introduce public registers that disclose who owns the assets in companies registered in each jurisdiction.
The BOTs have hit back at the amendment, with a collective sentiment it undermines constitutional independence.
The British Virgin Islands premier Orlando Smith said the public register “destroys any trust between the BVI and the United Kingdom”.
While Cayman Islands premier Alden McLaughlin said it is “reminiscent of the worst injustices of a bygone era of colonial despotism”.
However, the committee says the UK has the constitutional right to introduce public register sanctions on BOTs as it is a matter of national security.
“The Overseas Territories and Crown dependencies are important routes through which dirty money enters the UK. This cannot continue.
“While we recognise the important innovations that Overseas Territories such as the British Virgin Islands have made in making registers of beneficial ownership available to UK law enforcement, the scale of the problem and the implications for the UK’s security now demand a greater response.
“The Government should do everything in its power to enable the Overseas Territories to put these registers in place voluntarily, before the end of 2020,” the committee says.
Moving forward, the committee says the UK Government must set out its plan for assisting the governments of the BOTs to establish public registers before 31 December 2020.
“We also call on the Government to provide the same level of assistance to the Crown dependencies, and to encourage them to take steps to meet the same standard of transparency,” the committee says.