Statement on corporate transparency and measures against economic crime

With your permission, Mr President, I would like to make a statement on the reforms the government will be proposing to improve transparency over the ownership of businesses and property in the UK and to strengthen the enforcement of financial sanctions. These are key elements of our strategy to fight dirty money from Russia and elsewhere.

Mr. President, the openness of our economy to investment from all regions of the world is one of our greatest strengths.

However, we are also committed to attracting the right kind of investment. As many in this House know, oligarchs and kleptocrats in Russia and elsewhere have used the veneer of legitimacy provided by UK registered companies and partnerships. They also used high-end properties to help launder the proceeds of corruption.

At present, Companies House has very limited powers to prevent such abuse. In light of Russia’s outrageous actions in recent days, it is necessary that we warn these criminals and send a message that the UK will not tolerate their corruption here.

So, to this end, I am announcing 2 immediate measures.

First, my department is today releasing a white paper on corporate transparency and registry reform. And this white paper outlines a comprehensive set of Companies House reforms.

The agency will be transformed into a repository of accurate and detailed information – ensuring we can crack down on those who seek to abuse UK corporate structures to launder money.

Anyone starting, running, owning or controlling a business in the UK will need to verify their identity with Companies House, who can then challenge questionable information and notify security agencies.

Agents of foreign companies will no longer be able to set up companies in the UK on behalf of foreign criminals or secret oligarchs.

These reforms will not only tackle illicit finance, but will directly support the millions of legitimate businesses that transact with Companies House every day.

Alongside this white paper, we will also legislate for other measures, including reform of limited partnerships law, new powers to seize crypto assets, and reforms to help companies share information about suspected money laundering.

Secondly, Mr President, tomorrow we will introduce legislation in Parliament to speed up other measures which will have an immediate deterrent effect on dirty money from Russia and elsewhere.

The bill we will introduce tomorrow will create a Foreign Entity Registry to crack down on foreign criminals using UK assets to launder their money. The new registry will require anonymous foreign owners to reveal their true identities to ensure criminals cannot hold property behind secret chains of shell companies. By legislating now, we will send a clear warning to those who use or plan to use the UK property market to launder ill-gotten gains, especially those linked to the Putin regime.

Tomorrow’s bill will also reform Unexplained Wealth Orders, removing key barriers to their use by law enforcement. And it will include amendments to financial sanctions legislation, helping to deter and prevent sanctions violations.

The new Property Register and Companies House reforms will once again see the UK take innovative and cutting-edge action to tackle anonymous shell companies. We have been running this program since we were the first major economy to implement, Mr. President, a public register of beneficial owners for all domestic companies in 2016.

We cannot only pay tribute to the heroic efforts of the Ukrainian people to defend their democracy and their freedom. These small but important measures will put pressure on the kleptocrats and oligarchs who have abused our hospitality for their own nefarious purposes.