Boris Johnson has said that Russian oligarchs will no longer have a hiding place for their “ill-gotten gains” in the UK under legislation being introduced in parliament this week. A new register of overseas entities is intended to stop the foreign owners of property in Britain from hiding their identity, and separate measures are expected to give some teeth to the unexplained wealth order mechanism, which until now has proved relatively ineffective. The new laws will be contained in an economic crime (transparency and enforcement) bill, which has long been called for by campaigners concerned about the UK’s reputation as a haven for dirty money. Ministers had been accused of dragging their feet over this legislation, but Johnson announced that it would be fast-tracked after the invasion of Ukraine. Some measures, though, are being held back for a further economic crime bill. “There is no place for dirty money in the UK,” Johnson said. “Those backing [the Russian president, Vladmir] Putin have been put on notice: there will be nowhere to hide your ill-gotten gains.”
His announcement came as the UK government committed £40m in aid to provide vital medical supplies and other help to Ukraine. “The UK will not turn our backs in Ukraine’s hour of need,” said Johnson. “We are providing all the economic and military support we can to help those Ukrainians risking everything to protect their country.” Transparency campaigners have long complained that oligarchs have been able to park their wealth in UK property, using shell companies and other complicated legal structures to conceal the identity of the real owners. Under the new legislation, a register of overseas entities will be set up, applying retrospectively to property bought up to 20 years ago in England and Wales, and from 2014 in Scotland. Entities that do not declare the beneficial owner will face restrictions on selling the property, and people who break the rules could face up to five years in jail. The legislation will also make it easier for the authorities to use unexplained wealth orders (UWOs) – powers that enable them to confiscate criminal assets without having to prove to a criminal law standard that the property was obtained as a result of a crime being committed. UWOs have been available since January 2018, but they have only been obtained nine times in relation to four cases, and none has been secured since the end of 2019. The new rules will expand the definition of property that can be covered by an UWO, to include homes held in trust, or owned by shell companies. Law enforcement agencies will also get more time to make their case, and they will be protected against having to pay substantial costs if the attempt to secure an UWO fails. The government is also publishing a white paper on plans to give Companies House new powers to verify the identify of people setting up and running companies. This will form the basis of a future economic crime bill due to be introduced later this year. In a related move the government is also making it easier for the Office for Financial Sanctions Implementation – the body in charge of punishing banks and other organisations that do not enforce sanctions rules – to penalise offenders. On Sunday the foreign secretary, Liz Truss, said there were more than 100 billionaires in Russia and that some of them would face “a rolling programme of sanctions” as officials compiled the evidence to justify their assets being frozen in the UK. “We are targeting oligarchs’ private jets, we’ll be targeting their properties, we’ll be targeting other possessions that they have,” she told Sky’s Trevor Phillips on Sunday. “There will be nowhere to hide.”