Pressure mounts on UK to step up economic crime measures | Serious Fraud Office

MPs and anti-corruption experts have warned the UK government must not delay long-awaited measures to tackle economic crime, after a minister resigned following the government’s failure to prevent more than 4.3 billions of fraudulent applications for Covid business loans.

Lord Agnew dramatically resigned on Monday as Treasury and Cabinet Minister responsible for overseeing fraud prevention, in another blow to the beleaguered Prime Minister. In a resignation letter to Boris Johnson, published on Tuesday, Agnew revealed that in a decision apparently taken last week, a key piece of legislation, the Economic Crimes Bill, had been rejected for consideration over the next parliamentary year. He called the decision “stupid.”

The bill was expected to propose measures, among other things, to improve the almost non-existent oversight of the UK’s business register, Companies House, and finally set up a public register of beneficial owners of property – revealing the people behind companies. offshore used to hold valuable UK homes and land. Tougher fraud laws and McMafia-style legislative changes to target the unexplained wealth of kleptocrats were also expected.

The responsibility for planning which bills to include in the annual Queen’s Speech at the start of each parliamentary session lies with Jacob Rees-Mogg, the leader of the house and head of the House’s Business and Legislation Committee.

Robert Palmer, executive director of Tax Justice UK, a campaign group, slammed the decision to “throw anti-corruption legislation back into the long grass yet again”.

“We need tougher rules to deter the rich and powerful from dodging tax or hiding their wealth. UK companies can still be used to funnel dirty money through the UK.

Many of the measures expected in the bill enjoy cross-party support, and the Prime Minister told the House of Commons on Tuesday that the government was proposing a “beneficial interests register” as part of its effort to “track the ‘Russian money in this country’, amid fears that Russia could invade Ukraine.

Andrew Mitchell, a Tory MP and former cabinet minister who campaigned for transparency measures to clean up what has become known as the “London Laundromat”, warned of further delays.

“Any rollback, especially at a time like this, would be extremely unfortunate,” Mitchell said.

Campaigners have long pointed to the UK’s role in laundering the proceeds of global financial crime and looting high-level corrupt states. Real estate in London and the South East of England is particularly popular.

Agnew resigned after highlighting huge levels of fraud detected in the UK’s Covid-19 business support schemes after the government decided to write off £4.3billion in loans found to be fraudulent. Many of these loans have been claimed by fraudulent front companies registered in the UK.

Money laundering and other forms of financial crime are facilitated by the UK’s relatively lax approach to business verification, after changes in 2011 under then Business Secretary Vince Cable. to speed up online business registration. Companies House sadly acknowledges at the top of its website that it “does not verify the accuracy of any information filed”.

This left him wide open to abuse. “Adolf the Tooth Fairy Hitler” was registered as a company director until his apparent resignation on December 31, while one of the few prosecutions for fraudulent information on Companies House involved a Warwickshire businessman who openly set up a company under the name of Cable to prove how open the system was to fraud.

It only costs £12 to set up a business in the UK. Margaret Hodge, a Labor MP who has campaigned hard for tougher measures against financial crime, has called for the cost to be raised to a ‘still cheap’ £50, a move that would massively increase Companies House’s resources .

For years, the government resisted reform of Companies House. The Covid loan fiasco shows it was wrong to do so, campaigners say. UK companies are not just being used for money laundering by bad actors in faraway foreign countries, but here in Britain on an industrial scale.

Tom Keatinge, director of the Center for Financial Crime and Security Studies at the Royal United Services Institute, a think tank, said: “The weak governance and toothless powers of Companies House enable fraud and economic crime around the world, and right here in the UK. . The Government’s inability to address this problem was starkly exposed by the large-scale Covid loan frauds – money stolen from British taxpayers due to indifference and negligence at the heart of government.

Duncan Hames, policy director at Transparency International UK, said suspending the reforms would allow even more illicit wealth to flow into the UK.

“With criminals exploiting some of the same weaknesses used to funnel dirty money to Britain, it is clear that a reformed Companies House could have played a key role in preventing the mountain of Covid loan fraud. who left billions of dollars to the public,” he said.

Hodge said any further delay in the Economic Crimes Bill would be a “gross betrayal on the part of this government”.

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They can no longer kick the road without economic crime causing further incalculable damage,” she said.

A government spokesperson said: “We remain committed to tackling economic crime.

“We are already taking action on multiple fronts to crack down on anyone who has sought to exploit our Covid-19 support programs.

“This includes investing more than £100m in a Taxpayer Protection Task Force of nearly 1,300 staff – which is expected to recoup a further £1bn of taxpayers’ money.”

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