Further measures announced to move faster with sanctions and clamp down on Putin's regime
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The Government has put forward a series of amendments to the
Economic Crime (Transparency and Enforcement) Bill to crack down on
corrupt elites and ramp up pressure on Putin’s regime. The first
set of amendments will allow the government to move faster and
harder when sanctioning oligarchs and businesses associated with
the Russian Government. The new provisions will help
streamline the current legislation so we can respond even more
swiftly and effectively to...Request free trial
The Government has put forward a series of amendments to the Economic Crime (Transparency and Enforcement) Bill to crack down on corrupt elites and ramp up pressure on Putin’s regime. The first set of amendments will allow the government to move faster and harder when sanctioning oligarchs and businesses associated with the Russian Government. The new provisions will help streamline the current legislation so we can respond even more swiftly and effectively to the current crisis in the way we sanction individuals. It will allow the UK to align more rapidly with the individual designations imposed by our allies such as the US, Canada and the EU via an urgent designation procedure. The amendments will remove the test of ‘appropriateness’ for designations, enabling the government to act more quickly and make changes to further facilitate the designations of groups of individuals. The Government has also brought forward amendments to shorten the deadline for overseas companies to register their beneficial owners from 18 months to 6 months. This will help crack down on money laundering through UK property, whilst giving people who hold their property in overseas entities for legitimate reasons appropriate time to comply with the new requirements. The vast majority of the beneficial owners of entities holding properties on the register will be entirely law-abiding companies and individuals. A 6-month transition period strikes a balance in allowing for the free enjoyment of property and maintaining the UK’s reputation as a stable investment environment whilst ensuring property owners register their beneficial owners. A further amendment will also increase criminal penalties for non-compliance from fines of up to £500 per day to up to £2,500 per day. As set out in the existing legislation, other sanctions will include prison sentences of up to 5 years and imposition of financial penalties for non-compliance. Prime Minister Boris Johnson said: “The UK has led the way with the toughest package of sanctions against Putin’s regime and we’re bolstering this with new powers in our arsenal to go further and faster. “We will ramp up the pressure on those criminal elites trying to launder money on UK soil and close the net on corruption. They will have nowhere to hide.” Foreign Secretary Liz Truss said: “Our message to Putin and his cronies has been clear from day one - invading Ukraine would have serious and crippling consequences. We have been true to our word, introducing the largest and strongest sanctions package in our history, but we are not stopping here. “The changes we are making will allow us to go faster and harder on those closest to Putin, including oligarchs, as we continue to ratchet pressure in the face of illegal and unprovoked Russian aggression.” The government will also bring forward an amendment which will commit the Government to publishing an annual report on the use of Unexplained Wealth Orders (UWOs). Data on the use of UWOs is already published in the annual Asset Recovery Statistical Bulletin, but the additional report will be laid before Parliament and provide further information beyond how many UWOs have been obtained and their estimated value. The Economic Crime (Transparency and Enforcement) Bill will be expedited through all its Commons stages on Monday and the Government is looking for swift passage in the Lords in order to get Royal Assent as soon as possible. The Prime Minister has so far announced the largest and most severe package of economic sanctions ever imposed on a major economy. We have brought in sanctions on President Putin, Sergey Lavrov, five Russian banks and more than 300 individuals and entities at the heart of Putin’s regime, and Belarus. The UK is also applying full asset freezes to three more banks in addition to the six already designated and we are preventing the Russian state from raising debt here and isolating all Russian companies from access to UK capital markets. The government will continue to ratchet up pressure and use sanctions to degrade the Russian economy on a scale that the Kremlin, or any major economy, has ever seen before. ENDS Notes to Editors:
The measures in the Bill include:
o UWOs will be more made effective against those who hold property in the UK via trusts and other complex ownerships o Individuals will no longer be able to hide behind opaque shell companies and foundations o The time available to law enforcement to review material provided in response to a UWO will be increased o Cost rules around UWOs will be reformed to protect law enforcement agencies from incurring substantial legal costs if they bring a reasonable case that is ultimately unsuccessful o The Government has today tabled an amendment to commit to publishing an annual report on the use of Unexplained Wealth Orders
o Register of Overseas Entities to be created, which will require anonymous foreign owners of UK property to reveal their real identities so they can’t hide behind shell companies and foundations o Entities who do not declare their ‘beneficial owner’ will face restrictions over selling their property, and those who break the rules could face up to five years in prison. o This will apply retrospectively to property bought by overseas owners up to 20 years ago in England and Wales and since December 2014 in Scotland. o It will be held by Companies House, with support from the UK’s Land Registries. o The Government has today tabled amendments to these provisions to shorten the transition period for overseas companies to register their beneficial owners from 18 months to 6 months. And to increase criminal penalties for non-compliance from fines of up to £500 per day to up to £2,500 per day. The legislation already contains other sanctions including prison sentences of up to 5 years.
o We will introduce a more wide-ranging ‘strict civil liability test’ for monetary penalties, rather than the current one which requires firms to have knowledge or a ‘reasonable cause to suspect’ sanctions are being breached. o This will make it easier for the Office for Financial Sanctions Implementation (OFSI) to impose significant fines. o OFSI will also be able to publicly name organisations that have breached financial sanctions but have not received a fine.
o The amendments will remove the test of ‘appropriateness’ for designations, enabling the government to act more quickly and make changes to further facilitate the designations of groups of individuals. o It will also remove similar requirements regarding the appropriateness of discretionary purposes of new regulations made under SAMLA, so we can act swiftly to establish new sanctions regimes. o The amendments will also remove some of the constraints around designation by description and seek to ensure the Government can designate groups of individuals more quickly. This will assist in listing all members of defined political bodies such as the Russian Duma and Federation Council. o In addition, the changes will ensure we can mirror the listings already adopted by our allies via a mechanism for the Foreign Secretary to have the power to designate individuals or companies already designated by, for example, the EU, US, Canada. |