Labour welcomed the reduction of the register grace period to six months, but said it needed to be reduced further.
06 March 2022
Labour has accused the Government of giving Russian oligarchs a “get out of London free” card by still allowing them six months before foreign-owned UK property needs to be registered under new plans.
The Government’s Economic Crime Bill is due to be debated by MPs on Monday, and ministers have already put amendments forward to reduce the time given to comply with new rules from 18 months down to six.
But Labour said this would still give oligarchs linked to Russia too long, and instead this should go down to just 28 days.
The Bill is designed, in part, to try and help tackle the swathes of Russian money thought to be in the UK.
The money is often buried in property, with the true owners hidden behind shell companies that only exist on paper, sometimes registered in offshore tax havens.
But under new plans when ownership of property and land is registered, lawyers will need to also record who ultimately benefits from the asset. If they do not, it will be frozen and cannot be sold or rented out.
The Government has also tabled new amendments to ensure it can act “harder and faster” and remove red tape to impose further sanctions.
Prime Minister Boris Johnson said: “Punishing sanctions are meaningless until properly implemented, and these changes will allow us to pursue Putin’s allies in the UK with the full backing of the law, beyond doubt or legal challenge.”
MPs will consider the amendments in the Commons on Monday, when the Bill will pass through all stages in one day due to its urgency.
Foreign Secretary Liz Truss said: “These amendments give us the chance to bring even more crippling sanctions against Putin and his regime.”
However, Labour’s shadow business secretary Jonathan Reynolds said: “It’s not good enough that the Government want to give Putin’s cronies months to sell up and escape sanctions. The invasion of Ukraine and continued Russian aggression demands action now, not in six months’ time.
“The Conservatives want to give Putin’s pals a ‘get out of London free’ card while Labour has been taking the action needed to tighten the net now on those profiting from misery in Ukraine.
“This is a chance for the Government to work with Labour in the national interest and run dirty Russian money out of our economy in days, not months.”
The Government is fast-tracking plans to tackle “dirty money” and expose foreign oligarchs who launder their wealth through the UK’s property market in the wake of Russia’s invasion of Ukraine.
The legislation is set to establish a new register of overseas entities requiring foreign owners of property in the UK to declare their true identity in a move intended to ensure criminals cannot hide behind secretive webs of shell companies.
People who fail to comply will have restrictions placed on selling the property while those who are found to have broken the rules will face fines or up to five years in prison.
A further amendment will increase criminal penalties for non-compliance from fines of up to £500 per day to up to £2,500 per day.
Another change will tie the Government to publishing an annual report on the use of Unexplained Wealth Orders (UWOs).
Ms Truss said the changes will “allow us to go faster and harder on those closest to Putin, including oligarchs”.
Sir Keir Starmer said on Sunday that there was a bit of “frustration” in relation to the Bill as “these issues are not new”.
He told ITV News: “There’s a bit of frustration there, I have to say, because these issues are not new.
“There was something called the Russia report of two years ago now that pointed out why we needed some of these measures and the Government hasn’t acted quickly enough. So, there’s a frustration.
“I am determined that that frustration doesn’t lead to division because I think that Putin wants to see us divided and we’re not going to let him see us divided. We’re going to be united standing up to Russian aggression.”