Responding to illicit and emerging finance
Foreign Affairs Committee
Closed
Inquiry
This inquiry will look at how effectively the UK is responding to the challenge of illicit finance flows across borders, building on the predecessor Committee’s report “Moscow’s Gold”. It will also explore the impact that emerging forms of finance could have on the international norms and rules that govern the …
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11
Recommendations
6
Conclusions
1
Report
1
Oral session
1
Event
Activity timeline 4 events
26 Oct
2022
2022
18 Oct
2022
2022
Oral evidence
18 Oct
2022
2022
Formal meeting (oral evidence session) · Room 8, Palace of Westminster
30 Jun
2022
2022
Oral evidence sessions 1 session
18 Oct 2022
View on parliament.uk
Foreign Affairs Committee
Adam M Smith · Gibson, Dunn and Crutcher LLP
Maria Nizzero · RUSI
Oliver Windridge · The Sentry
Reports 1 report · click to expand
| Title | HC No. | Published | Items | Response |
|---|---|---|---|---|
| Second report - The cost of complacency: illicit finance and th… | HC 168 | 30 Jun 2022 | 17 | Responded |
Recommendations & Conclusions
9 results
1
Conclusion
Accepted
Second report - The cost of compla…
The Committee underlines the imperative of implementing beneficial ownership rules and robust reform of Companies...
The Committee underlines the imperative of implementing beneficial ownership rules and robust reform of Companies House, including new powers for the company registrar to verify information to ensure accuracy as well as discretionary powers to remove corporate entities from the …
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Government Response
The government agrees and is reforming Companies House through the upcoming Economic Crime and Corporate Transparency Bill to broaden the Registrar's powers, introduce new objectives, improve data accuracy, and enhance investigation and enforcement capabilities.
Foreign and Commonwealth Office
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2
Recommendation
Accepted
Second report - The cost of compla…
We recommend that the FCDO ensures there must be timely and effective implementation of the...
We recommend that the FCDO ensures there must be timely and effective implementation of the Companies House register of overseas entities that own UK property.
Government Response
The government agrees and created a new Register of Overseas Entities through the Economic Crime (Transparency and Enforcement) Act, requiring overseas companies owning or buying property in the UK to provide information about their true owners to Companies House. The Register went live on 1 August 2022.
Foreign and Commonwealth Office
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4
Conclusion
Accepted
Second report - The cost of compla…
The Government’s unwillingness to bring forward legislation to stem the flow of dirty money is...
The Government’s unwillingness to bring forward legislation to stem the flow of dirty money is likely to have contributed to the belief in Russia that the UK is a safe haven for corrupt wealth. It is shameful that it has …
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Government Response
The Government notes this conclusion and states that it is already taking action, including setting up the Combatting Kleptocracy Cell in the National Crime Agency (NCA) and sanctioning over 1,100 Russian individuals linked to the Kremlin regime.
Foreign and Commonwealth Office
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7
Recommendation
Accepted
Second report - The cost of compla…
Greater public access to information about beneficial ownership would improve private sector compliance with sanctions,...
Greater public access to information about beneficial ownership would improve private sector compliance with sanctions, pre-empt sanctions evasion and improve transparency about designated individuals. If the Government and Overseas Territories had achieved this by December 2020, as originally expected, these …
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Government Response
The government states that Overseas Territories and Crown Dependencies are separate, self-governing jurisdictions with their own governments responsible for domestic affairs, including fiscal matters and financial services policy. They point to the freezing of Russian assets and the Exchange of Notes procedure to proactively request information about non-transparent companies and assets.
Foreign and Commonwealth Office
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8
Conclusion
Accepted
Second report - The cost of compla…
We welcome the consultation on SLAPPs, to which we have submitted a memorandum.
We welcome the consultation on SLAPPs, to which we have submitted a memorandum. We will return in our further report to ways in which the FCDO can work in concert with other departments to curb professional enablers who wittingly or …
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Government Response
The government welcomes the committee’s support and outlines plans for a legislative definition for SLAPPs and early dismissal process, supported by a formal costs protection scheme.
Foreign and Commonwealth Office
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11
Recommendation
Accepted
Second report - The cost of compla…
We are concerned the Government’s recent rhetoric about action on “dirty” Russian money implies that...
We are concerned the Government’s recent rhetoric about action on “dirty” Russian money implies that the current raft of sanctions is a part solution to the UK’s problem of kleptocratic wealth. We welcome the issuance of sanctions, which have frozen …
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Government Response
The government notes the recommendation and states that law enforcement agencies are currently able to freeze and seize foreign assets with links to criminality or unlawful conduct by using powers granted under the Proceeds of Crime Act 2002.
Foreign and Commonwealth Office
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12
Recommendation
Accepted
Second report - The cost of compla…
The primary reason for early ineffective action on sanctions was inadequate preparation and foresight by...
The primary reason for early ineffective action on sanctions was inadequate preparation and foresight by the leadership of the FCDO and consequent understaffing within the sanctions unit. The skillset of staff within the sanctions unit and the coordination between departments …
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Government Response
The FCDO has established a permanent Sanctions Directorate and a cadre of sanctions experts to build enduring expertise. This includes training for staff across the FCDO and wider government.
Foreign and Commonwealth Office
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13
Recommendation
Accepted
Second report - The cost of compla…
The Government has an obligation to help guide institutions through the sudden gear change in...
The Government has an obligation to help guide institutions through the sudden gear change in policy, not least because it has introduced strict liability for breaches. We endorse the Treasury Committee’s call for clear guidance for the private sector. (Paragraph …
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Government Response
The Office of Financial Sanctions Implementation (OFSI) undertakes regular engagement with a variety of different industry sectors and provides a variety of sanctions guidance available online to support stakeholders, and keeps this regularly under review.
Foreign and Commonwealth Office
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14
Recommendation
Accepted
Second report - The cost of compla…
Given the impressive coordination with the EU and US on sanctioning individuals and entities in...
Given the impressive coordination with the EU and US on sanctioning individuals and entities in relation to the war in Ukraine, we urge the Government to build on this initiative and to develop a comprehensive transatlantic partnership to curb kleptocracy. …
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Government Response
The government agrees that transatlantic collaboration is vital and emphasizes working with partners bilaterally and multilaterally to tackle illicit finance. They cite existing partnerships with the US and UAE, participation in the G7 and G20, and involvement in the US-led Summit for Democracy’s Financial Transparency and Integrity Cohort.
Foreign and Commonwealth Office
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