Political

Economic Crime Bill: Lib Dems close ‘Oligarch Loophole’

A Lib Dem press release brings the news:

The Liberal Democrats have closed a major “oligarch loophole” in the Economic Crime Bill after the Government accepted their crucial amendment.

Liberal Democrat MP Layla Moran and Liberal Democrat Peer Lord Chris Fox both tabled an amendment to the legislation which sought to close a backdoor route for oligarchs to avoid meeting crucial anti-money laundering requirements contained within the Bill. 

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The Bill establishes a register of beneficial ownership for overseas entities. However, as originally drafted, it gives the Government the power to grant individuals – which could include Kremlin-linked oligarchs – an exemption from its registration requirements on the broad basis of “the interests of the economic wellbeing of the United Kingdom”. 

The Liberal Democrats warned that this loophole could give ‘carte blanche’ to oligarchs and their enablers to aggressively lobby the Government for exemptions – with the risk that Kremlin-linked individuals continue to operate in the shadows, with no transparency around the ownership of their assets and no disruption to their operations in this country.

This evening, as the bill is fast-tracked through the House of Lords, the Government has confirmed they will accept the Liberal Democrat amendment and drop the loophole from the bill altogether.

Commenting on the news Layla Moran MP, Liberal Democrat Foreign Affairs Spokesperson, said:

This is a good day for all those who have argued that we should be clamping down on Putin’s cronies.

I am pleased that the Government has seen sense on this vital measure and backed Liberal Democrat proposals. It simply would have been unsustainable to pass this crucial legislation without closing this oligarch loophole.

We must be in no doubt, Putin’s cronies and their enablers will be poring over this new legislation looking for ways to get around it. We might have shut this backdoor route – but we should be in no illusions about what they will do next.

So there is still much more to do – starting with using these new powers to catch-up with our allies. We are lagging behind in terms of sanctions when we should be leading the way. It’s time to end the era of Russian interference in the UK, once and for all.

Full text of the Liberal Democrat amendment to the Economic Crime Bill

Member’s explanatory statement

This amendment removes the ability of the Secretary of State to exempt an individual from the requirements to register their overseas entities on the grounds of the economic wellbeing of the United Kingdom.

Clause 18

Page 11, line 18, leave out paragraph (b)

18 Exemptions 

(1) The Secretary of State may, by giving written notice to a person, exempt the person under this section if satisfied that to do so is necessary— 

  • (a) in the interests of national security; 
  • (b) in the interests of the economic wellbeing of the United Kingdom; 
  • (c) for the purposes of preventing or detecting serious crime.

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