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Ministers slammed for failing to tackle London’s reputation as money laundering hub | Business

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The government was forced to deny claims it had dropped a crucial economic crime bill on Wednesday, as MPs across the House hit out at ministers for failing to attack reputations of the British capital’s “Londongrad” as a money laundering hub used by Russian oligarchs, criminals and kleptocrats.

The scathing comments in the House of Commons follow the shock resignation of junior minister Lord Agnew on Monday, which revealed in his departure letter that the government had only last week taken the “senseless” decision to kill the bill in the next parliamentary year.

As recently as December, Prime Minister Boris Johnson pledged a “year of action” against fraud at a summit hosted by US President Joe Biden, saying the government would target “illicit finance that undermines democracy everywhere, strengthening our law enforcement powers to prosecute”. criminals who abuse our corporate structures”.

Agnew had also slammed the government for failing to take action against Covid loan fraud, which critics say could cost taxpayers billions of pounds. The damning accusations prompted Rishi Sunak to assure that the government “will do everything possible” to recover the stolen funds. “I’m not ignoring it, and I’m certainly not ‘cancelling it,'” the Chancellor said on Twitter on Wednesday.

Figures from HMRC show around £5.8billion has been lost to fraudulent furlough claims and other business relief schemes. Reports suggest HMRC stole £4.3billion of that sum as unrecoverable. However, the government declined to confirm the figure.

MPs said the Economic Crimes Bill was needed to tackle issues of Covid loan fraud raised by Agnew and the use of London as a money laundering destination by kleptocrats from Russia and other countries. other diets.

Campaigners had been pushing for the bill to be included in the next parliamentary session, which runs from the end of this year until 2023, and will be announced during the next Queen’s Speech. It was to include reforms to Companies House, the lightly-policed ​​UK Companies Registry and rules requiring those who hold property through offshore shell companies to declare their identity.

Paul Scully, the Parliamentary Under-Secretary for the Department for Business, Energy and Industrial Strategy, was called to the House of Commons to answer an urgent question about the status of the bill. He said, “There was nothing at all.” But Scully said no legislation would be introduced until the still unscheduled Queen’s Speech, which opens a new parliamentary year.

The government has yet to set a date for the speech, but last year held the official opening in May.

It comes as Downing Street considers sanctions against Russia if Moscow pursues an invasion of Ukraine.

“Up to 50% of the money circulating in Russian laundromats – often used for tax evasion, stolen public funds and to launder money from organized crime – passes through British front companies,” said Conservative MP Kevin Hollinrake, who kicked off the debate by tabling the urgent question.

“It’s not a theoretical white-collar offense,” he added. “It affects real people in very tangible ways. Terrorists and drug traffickers rely on it to launder and legitimize their money through UK banks, businesses and properties.

SNP MP Alison Thewliss urged the government to set a date for the introduction of the Economic Crimes Bill, saying the lack of action suggested complacency on the part of Prime Minister Boris Johnson’s cabinet . Why is this government so reckless that the UK is considered ‘Londongrad’, notorious for laundering dirty money? »

John Penrose, the Conservative MP for Weston-super-Mare also accused the government of moving too slowly. “The well of excuses after three or four years of promises of this bill, or its related elements, has now dried up. And it’s absolutely essential for the credibility of his country and this government, especially at a time when we have a crisis in Ukraine, and all kinds of Russian oligarchs who are waiting to bring money into this country. they can…that we don’t back away from the centerpiece of the legislation,” he added.

Labor MP Chris Bryant said the UK rules as they currently stand are too “soft to the touch” and that “if we want to send a strong message to Russia in particular at this time, we have to act quickly and not say ‘oh, I can’t get into legislation that we might think about in the future.

But Scully refused to get drawn into speculation about when the bill will be introduced. ‘What I cannot do is anticipate what Her Majesty will say in the Queen’s Speech,’ he said, adding that she would ‘clarify government programming in due course’.

Ministers slammed for failing to tackle London’s reputation as money laundering hub | Business

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