Money Laundering

Monday 19th March 2018 Commons Chamber

15:34

[John McDonnell (Hayes and Harlington) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the Government’s action to address dirty money being laundered in the UK.

[The Minister for Security and Economic Crime (Mr Ben Wallace)]

I thank the shadow Chancellor for giving the Government the opportunity to come here today to say what they have been doing on dirty money and money laundering in the United Kingdom. It is a long list, Mr Speaker, so I ask you to have a bit of patience and I will try to be as quick as possible in reading it.

We have made it harder for crooks to launder money through property, jewellery and betting. We have reversed the burden of proof so that people we think have links to organised crime have to prove where their assets come from. If they cannot prove it, we will seize the asset and dispose of it, or keep it to distribute it to countries where it may have been stolen. We have, for the first time, through the Magnitsky amendment made it possible to confiscate assets from people guilty of gross human rights abuse. We will complete that with an amendment to the Sanctions and Anti-Money Laundering Bill currently going through Parliament. I pay tribute to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) and the right hon. Member for Barking (Dame Margaret Hodge), who actually led the campaign on the Magnitsky amendment, not Labour Front Benchers.

We have made it easier to seize criminals’ money from bank accounts. We have introduced new powers to be able to freeze terrorists’ assets, and we did so on the very day that the provision came into force. We have made it a criminal offence to fail to prevent tax evasion, both at home and overseas. We are currently exploring the potential of widening other areas where failure to prevent may apply in economic crime.

We have brought a number of prosecutions under the Bribery Act 2010 of those involved in bribery, and we have had the first conviction of a company for failing to prevent bribery. [Interruption.]

[Mr Speaker]

Order. There is quite a lot of noise. I know that the Minister is keen to rattle through, and we are deeply obliged to him for doing so, but I just say very gently to him that there is no prohibition on breathing during the delivery of an answer to an urgent question.

[Mr Wallace]

We introduced deferred prosecution agreements to ensure that we maximise incentives for companies to face up to fraud and corruption. We are setting up the National Economic Crime Centre within the National Crime Agency. We have brought together the many strands of economic crime under one Minister—namely myself. We have bolstered the Serious Fraud Office by ensuring access to blockbuster funding so as to ensure that big business and overseas oligarchs cannot use their wealth to obstruct justice. The previous Prime Minister, David Cameron, initiated an international anti-corruption summit. In response to the Panama papers, we established a joint financial analysis centre within the NCA. We have established one of the world’s first public registers of beneficial ownership of companies. We have helped to establish in all overseas territories and Crown dependencies a register of beneficial ownership, with mutual and, in some cases, live-time access to law enforcement. We have committed to establishing a public register of overseas owners of property in the United Kingdom.

This Government have taken real steps to tackle criminal finance in this country. Whoever the crooks are, wherever they are from, and no matter what their nationality, we will pursue them and their cash.

[John McDonnell]

I thank the Minister for his response.

Twelve months ago, I raised in an urgent question the issue of the Russian laundromat, as it was called, laundering £20 billion of criminal funds through the City of London. Despite all that the Minister has said, the National Crime Agency estimates that £90 billion from the rest of the world is still laundered through the City each year, while the United Nations estimates that $100 billion has been lost in the British overseas territories. Despite all the actions that he set out, there is still a major problem. At the weekend, the Government said that they would enter into “detailed discussions” on further reform proposals. I therefore have a number of questions to ask the Minister.

Let me be clear: we welcome the Government’s new willingness to incorporate Labour’s proposals for Magnitsky measures to be included in the Sanctions and Anti-Money Laundering Bill, but we would welcome, in the spirit of co-operation, full and thorough discussion of the final drafting of the new clauses and amendments. We all agree that there is a need for complete openness and transparency in our financial system if we are going to be effective in tackling money laundering. Back in 2015, the Government initially promised, following two consultations, a date for a register of owners of UK property based overseas. After repeated delays, why are we now told that a register will not be published until 2021? There is minimal checking of the UK’s own register of company ownership. Indeed, it was possible for a journalist to set up a company called Crooked Crook Crook Ltd. Have the Government undertaken an assessment of the number of fraudulently registered companies in the UK? If not, when will they do so?

In the recent Sanctions and Anti-Money Laundering Bill Committee, the Government justified their lack of action on foreign trust or company service providers by saying that they were lower risk than the UK’s own trust or company service providers. In the light of the most recent evidence of money laundering via overseas TCSPs, will the Government revisit that assessment?

Why have the Government not included trusts in the register of beneficial ownership, as Labour has so long asked for? Given the concerns about corrupt funds being laundered through properties in the UK, will they now consider including Labour’s proposal for an offshore company property levy in their reforms? Will they finally join Labour in accepting the need for public, transparent registers for overseas territories and Crown dependencies?

Finally, 634,000 suspicious activity reports have been filed since October 2015. What will the Government now do to ensure that the enforcement agencies are fully resourced to tackle this scourge on our society?

[Mr Wallace]

This is interesting, because we have done a lot of work on criminal finance. I have stood at this Dispatch Box on numerous occasions, and the Government have taken many pieces of legislation through the House. The Treasury has also stepped up to the plate. Indeed, it has its own levy: where a property is bought by an overseas company or a UK company, it attracts an extra high level of stamp duty of 15%, which of course matches the levy that the right hon. Gentleman is talking about.

We have committed to a public register of overseas ownership of property, and we will introduce the Bill in 2018. We have to make sure that this is right. [Interruption.] The Opposition shout, but the reality is that we are taking many steps to deal with criminal finance, and there are only so many months in the year. We should not forget that, as we saw over the weekend, this is really a distraction by the Labour party from its woeful response last week to our national security.

This is an attempt by the shadow Chancellor to say, “Nothing to see here. Look over there—it’s all about oligarchs.” Before coming to the Chamber, I looked up in Hansard when the shadow Chancellor last mentioned oligarchs. The last time he mentioned them was in 2016, in a debate on the schools White Paper, in which he talked about the tax rate for cleaners. He should raise that with Hansard if he would like to.

The reality is that this Government and the coalition Government have been absolutely determined to deal with the threat posed by dirty money going through the City of London and being harboured here in a number of properties. The best example of how we have done the work in this House and how this is all last-minute Labour is that one of the complaints they made over the weekend was that unexplained wealth orders were not used by this Government. An unexplained wealth order was used in under two weeks of coming into force on 31 January. It was served against an overseas oligarch, on £22 million of property. That was action within a fortnight, contrary to the Labour party’s idea that no unexplained wealth orders have been issued. The other measure introduced by that Bill was used before midnight on the first day. I suggest that Labour does its homework, tries to put right its disaster of last week and stops trying to distract from the reality about the Russian threat.

[Several hon. Members rose—]

[Mr Speaker]

Order. A very large number of hon. and right hon. Members are seeking to catch my eye, but I remind the House that there are two further urgent questions to follow, meaning that there is a premium now upon brevity, which, as always, will be brilliantly exemplified by Sir Desmond Swayne.

[Sir Desmond Swayne (New Forest West) (Con)]

How much have we secured since the implementation of the Proceeds of Crime Act 2002?

[Mr Wallace]

My right hon. Friend asks a pertinent question. It is well over £1 billion—it is about £1.6 billion, I think, and it has increased in the last few years. We have been determined, through the use of confiscation orders and the provisions we used to improve the Act through the Criminal Finances Act 2017, to start increasing the seizure and freezing of assets, to make sure that criminals lose their ill-gotten money.

[Stewart Hosie (Dundee East) (SNP)]

I welcome what the Minister said about the Magnitsky amendment, but can he confirm that it will be genuinely tough and will allow the authorities to seize money very quickly? When does he intend to take action on Scottish limited partnerships, which are one of the main routes for filtering dirty money into the UK and laundering it? In addition, when will he finally fix the loopholes at Companies House, where to all intents and purposes absolutely no due diligence is done when a new company is registered?

[Mr Wallace]

The hon. Gentleman is doing exactly what Scottish National party Members did during the passage of the Criminal Finance Act, which was to work with us and make some sound suggestions about how to tackle criminal finance. We listened to them—for example, we lowered the thresholds of unexplained wealth orders to fit with some of the concerns in Scotland. I have taken up the issue of Scottish limited partnerships—the Department for Business, Energy and Industrial Strategy is driving forward that work—because, like the hon. Gentleman, I realise that it has to be tackled.

When it comes to a Magnitsky Act, I give the hon. Gentleman the absolute assurance that we will deal with anyone convicted of gross human rights abuses, whether through sanctions, seizing their assets if they are obtained criminally or controlling their movements through visa bans and any other measures. The intention of this Government is to make life incredibly hard for people who have committed human rights abuses and to prevent them and their families from enjoying the benefits they currently enjoy should they come to Europe to spend the money.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I congratulate the Government on moving towards supporting the Magnitsky amendment. There are three elements to such an amendment: first, asset seizures; secondly, visa bans; and thirdly and very importantly, a public list of named individuals. A public list makes it difficult for those named to access finance, and encourages others not to get on the list. Will the Minister set out his position on a public list?

[Mr Wallace]

My hon. Friend makes a very sound suggestion about a public list. As hon. Members will know, the Government are consulting within the various Departments on how to make sure that the amendment we put forward actually makes a difference. That is why we opposed the Labour proposal in Committee: it was not because we disagreed with having a Magnitsky amendment, but because we wanted to make sure we had one that worked. [Interruption.] Labour Front Benchers are saying, “Point of principle”. Would they rather we accepted a flawed amendment that did not do the job, or would they like this Government to deliver action, as we have done with unexplained wealth orders, by getting the law right in the end?

[Dame Margaret Hodge (Barking) (Lab)]

I acknowledge that the Government have taken some steps, but I put it to the Minister that they have not taken enough. Others have raised the issues of property and of our tax havens, and I want to raise another issue with the Minister, which is the tier 1 investor visas—the golden visas. Anybody who wants one of those visas needs to demonstrate that they have £2 million they wish to invest in the UK, and we know that Russia is one of the two top countries taking advantage of tier 1 investor visas. What steps will the Minister take to enable us to understand where the £2 million-plus comes from, so that we can be assured it is not dirty money and that these are not unsavoury individuals?

[Mr Wallace]

Not for the first time, the right hon. Lady makes a very good suggestion. When it comes to dealing with foreign oligarchs and serious organised criminals from overseas, we are clear that this is as much about the free movement they enjoy as about the actual assets they are moving around and harbouring. We already have the powers in our visa regime to take action, and as she quite rightly says, we will be looking at that tier to make sure we do better due diligence, if we need to, on where the money comes from.

In all of this we must be clear that the difference between us and, for example, Russia is that we believe in the rule of law. Under the Equality Act 2010, we cannot talk about Russians in a blanket fashion; we have to recognise that there are certainly legitimate Russians and other people from overseas who come here to invest in this country, and I am sure the shadow Chancellor would not like us to break the Equality Act. We have to make sure that we act on the basis of evidence. We will do so, and where we find wrongdoing, people will be refused a visa.

[Julian Knight (Solihull) (Con)]

Will the Minister confirm that the UK was the first country in the G20 to introduce a register of company beneficial ownership, and that we rank as one of the most efficient countries in terms of tax collection in many international league tables?

[Mr Wallace]

Yes. The tax gap is the lowest it has ever been, and much lower than it was under Labour. We have recovered a record amount of tax that should have been gathered—£160 billion over the past few years—and that has been a major contribution to the coffers. On the register of beneficial ownership, this country has led the way. David Cameron set out his ambition for the Government, and it is still the ambition of this Government. We have led the way, and now Montserrat, one of the overseas territories, also has a public register of beneficial ownership. The key is that the territories all have a register, and it is our ambition for them to be public, but in the meantime our leadership is starting to make a difference around the world.

[Ms Angela Eagle (Wallasey) (Lab)]

My right hon. Friend the Member for Barking (Dame Margaret Hodge) asked an extremely important question, to which she did not get an answer from the Minister. I wonder if we can try again. What changes are the Government planning to make to the due diligence for the golden visa, which establishes that someone must have £2 million they are investing in the UK before they get access to free movement here? What changes are the Government going to make to check that that money is clean? He did not answer—answer now.

[Mr Wallace]

The hon. Lady will know that there are numerous registers for people’s money. CIFAS and a range of other organisations record people who have been involved in fraud and other criminal actions. There are also the Government registers, such as the police national computer. We will continue with diligence based on applications for visas. [Interruption.] Members need to come to the House and say, “This person was allowed in based on their £2 million and we have prima facie evidence that they should not have been.” We will base it on evidence. Where we find evidence that someone got the money through the wrong means, they will not be allowed a visa to come into this country.

[Rebecca Pow (Taunton Deane) (Con)]

Will my right hon. Friend update the House on how the swift application of unexplained wealth orders under this Government is making a significant difference in tackling money laundering and terrorist finance, thereby demonstrating how seriously the Government take the issue?

[Mr Wallace]

When an unexplained wealth order is made, the National Crime Agency or the Serious Fraud Office, for example, goes to the court to apply for it. A judge can give a period of time for the person to respond to the charge that the law enforcement agencies have made. If they cannot, we move to seizure. Usually, at the same time as an unexplained wealth order is applied for, we also apply for a freezing order to make sure that the person does not move the money or the property when the order is made. We believe that it is a very important tool and there are many more in the pipeline. We used it within 14 days of it coming into law on 31 January.

[Mr George Howarth (Knowsley) (Lab)]

Does the Minister share the concern voiced by some that online platforms are being used for the purposes of money laundering? Will he ensure that the regulatory bodies and agencies concerned in the UK have all the necessary resources and the agility to counter that problem?

[Mr Wallace]

The right hon. Gentleman makes some important points. The first is about the development of new technologies, such as platforms and cryptocurrencies, which all present a challenge for law enforcement agencies around the world. The Governor of the Bank of England recently commented on that, and it is something that we will all have to think through. There is no easy answer on some of them.

On the issue of regulation and supervision, we are obviously working closely with the Financial Conduct Authority and Her Majesty’s Revenue and Customs—the tax authorities—to make sure that we spot when people move money without paying tax. It is also important to gather evidence from that movement. Of course, this country is bound by a number of directives on money laundering that we follow. We are currently subject to the Financial Action Task Force inspections on how we deal with money laundering. That leads to an independent international report that judges and ranks us. All hon. Members are welcome to comment on that and we will be held to account.

[Tim Loughton (East Worthing and Shoreham) (Con)]

When the Home Affairs Committee looked at this issue in 2016, witnesses pointed to a lot of hot Russian money in the London property market, yet out of 1.2 million property transactions in that year, only 355 suspicious activity reports were raised. There were problems with the fragmented regulatory landscape. Will my right hon. Friend tell us what progress has been made by the NCA-led joint money laundering intelligence taskforce in coming up with a more joined-up approach to this issue?

[Mr Wallace]

My hon. Friend asks a very good question. In fact, one of the first things I did when I became the Minister for Security and Economic Crime was to use the Home Affairs Committee report to hold the Department to account and ensure that we put right some of the things that clearly had not happened in the area of asset recovery. On SARs reform, it is worrying that SARs predominantly come from the banks—about 83% of them—and only the rest come from the facilitators. I have been determined, as has the director general of the NCA, to start focusing on the facilitators. It is the lawyers, accountants and people who sell things like boxes at football stadiums and Bentleys around the world who need to do more to report suspicious activity. When they do, we will stop it.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

May I take the Minister back to the question that the hon. Member for Huntingdon (Mr Djanogly) put to him? Have the Government compiled a list of politically exposed people from Russia, such as First Deputy Prime Minister Igor Shuvalov, who could be the subject of unexplained wealth orders? If they have such a list, will it be published and will the Minister give us a timetable for its implementation?

[Mr Wallace]

The right hon. Gentleman knows that I will not come to the House and publish the names of individuals who may or may not be the subject of an investigation or of operations against them because it could threaten our ability to have an effect on them. Needless to say, we are determined to ensure that we use intelligence-led policing to find money and deal with those individuals, whether they are from here or abroad.

[Nigel Huddleston (Mid Worcestershire) (Con)]

These crimes can be horrendously complex. Can we be confident that the SFO, the NCA and other bodies have the skills and resources to investigate them properly?

[Mr Wallace]

Yes. As I said at the beginning, one of the challenges of taking on people with deep pockets or large corporations is that they have no qualms about setting off to the Supreme Court or the High Court to challenge us. We are keen to ensure that we support the NCA with unexplained wealth orders, because some of the people to whom they serve them have a brass neck and are happy to challenge us. That is why we put in blockbuster funding for the SFO, which means that when there is a case of significant scale, it can access funding directly from the Treasury to ensure that money is not a barrier to taking on some of those very bad people.

[Liz Kendall (Leicester West) (Lab)]

The Minister has just talked about blockbuster funding for the crime enforcement agencies, but how many criminal cases have been opened in the UK in response to the Magnitsky case?

[Mr Wallace]

That is a matter for the NCA—[Hon. Members: “Zero!”] No, no. The NCA has appeared before many parliamentary Committees and been asked those questions. They are a matter for operational partners. It is not for Ministers to come to the House to talk about potential ongoing operations, which could expose our police officers or our methods to the risk of people getting away with it.

[Vicky Ford (Chelmsford) (Con)]

Does the Minister agree that the UK is one of the most transparent jurisdictions in the world for financial services, which are a key contributor to our economy, and that suggesting that money laundering is somehow rife in the UK risks talking Britain down?

[Mr Wallace]

It is interesting that no Opposition Member mentioned the fact that, only in the last few weeks, the UK went from 10th to eighth on Transparency International’s register of least corrupt places in the world. That speaks volumes.

[Helen Goodman (Bishop Auckland) (Lab)]

It is three years since I raised the case of Dmitry Firtash, a Putin associate, who was arrested in Vienna on corruption charges at the FBI’s instigation. The Ministry of Defence sold him Brompton Road tube station for an undisclosed price. I know that the Minister cannot comment, but notwithstanding the fact that Dmitry Firtash donated £200,000 to the Tory party, may I suggest that an unexplained wealth order be put out for him?

[Mr Wallace]

I said earlier that the difference between us and Russia is that Ministers here do not sit around directing who to pick on and who not to pick on. Our operational partners are independent of Government. That is the difference. We will ensure that any case is evidence led and that we follow the rule of law. That is how we make a difference and send a message internationally.

[Tom Pursglove (Corby) (Con)]

What steps is the Minister taking to bolster international co-operation on tackling this?

[Mr Wallace]

The best example I can give is that, after the Panama papers were published, we set up the joint financial analysis centre with the NCA and HMRC to ensure that we went through them and worked internationally to deal with some of those involved, collect some tax and potentially prosecute people. That happened through joint working at home, bringing together our partners, and internationally.

[Mr Ben Bradshaw (Exeter) (Lab)]

Over the past eight years, the brave campaign of Bill Browder, who has done more than anyone to expose this criminality, presented the UK Government on five separate occasions with dossiers of evidence of Russian money laundering in London as a direct result of the crime that Sergei Magnitsky uncovered. Twelve other countries have begun criminal proceedings, based on the evidence that Mr Browder gave them. Not a single case has begun in the UK. Why does the Minister think that is?

[Mr Wallace]

I met Mr Browder and he presented me with his portfolio of evidence. I have raised it a number of times with the NCA, the Serious Fraud Office and the police. I would be delighted to meet the right hon. Gentleman to discuss this specific issue directly. It is up to the operational partners to make a decision. [Interruption.] He may say it is about evidence, but we have make sure that it is evidence up to a level that can produce prosecution in court. I am happy to explore that further with him. My door is open.

[Alex Burghart (Brentwood and Ongar) (Con)]

Will the Minister update the House on what is being done to confiscate the assets of those guilty of gross human rights violations?

[Mr Wallace]

If there are criminal assets, we now have the powers to do that. We will bring forward any cases where we have collected the evidence and prepared a case. As I said, the Criminal Finances Act became law on 31 January, so we now have those powers. On sanctions, the sanctions Bill is currently transiting the House. We will bring forward our amendment in due course on Report. I hope we will work across the House to ensure the amendment is acceptable.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Minister will be aware of the allegations in the press that the First Deputy Prime Minister of Russia owns two flats in Whitehall through a company worth over £11 million. Does the Minister believe that he has the powers to know whether that is true? If he does not, when will those powers be in place?

[Mr Wallace]

I do not think I have to tell the Chair of the Home Affairs Committee about standing at the Dispatch Box and commenting on an individual case. She will know that, through our intelligence agencies, the police and a variety of partner organisations, we have the ability to find out information about people and gather evidence, if it is there, to make sure we make a case either to serve some of the new measures I have mentioned in the Criminal Finances Act or take action under the Proceeds of Crime Act 2002 and other measures that have been around for some time. We will not hesitate to do that if we feel that it is the right thing to do. It does not matter who that person is—whether they are a politically exposed person, or whether they are linked to friendly countries or adversaries—we will take action to take that money. I do not want that reputation for London and I know the right hon. Lady does not.

[Bim Afolami (Hitchin and Harpenden) (Con)]

On a recent trip to Washington with the Public Accounts Committee, it was notable that officials from both the International Monetary Fund and the US Treasury were very positive about Britain’s leadership in tackling money laundering. Will the Minister further explain the work the Government are doing on a multilateral and international basis to ensure that this issue is dealt with not just in Britain but across the world?

[Mr Wallace]

Through the NCA, the Government have invested in a network of overseas officers working around the world to make sure they have the best liaison and best access to other investigators, such as the FBI. I recently visited officers in Singapore whose job on a day-to-day basis is to put together international cases, either for this country or for their host country, to make sure we go after these people no matter where they are all around the world.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Can the Minister rule out any dirty Russian money having made its way to any politically exposed person in the UK, political party or think-tank? Will he say whether the database of PEPs is being run routinely against known sources of dirty Russian money?

[Mr Wallace]

The hon. Gentleman will know that the Electoral Commission is the arbiter of policing political funding. I know what he is trying to get at. We are confident that all our donations are in accordance with the law, as set out for UK citizens. I would rather be taking money under that premise than from Max Mosley.

[Kevin Foster (Torbay) (Con)]

I welcome the overall tone of the Minister’s responses. Will he reassure me that the Government will continue to focus on the evidence base to deal with those who have committed human rights breaches and what may be corruption, rather than just apply a broad brush that might actually target those whose only offence is holding a passport of a nation whose leader wants to become a dictator?

[Mr Wallace]

It is very important that we tackle transnational criminals using a much more co-ordinated Government response. The Prime Minister has brought together many strands of economic crime and put them under one Department and one Minister, so that we can co-ordinate them better. It is incredibly important that we recognise that we have to use the rule of law. It has to be evidence-based, so that we can take action and remind those countries that this is about an international world order and the international rule of law and so that we can show that this country is a beacon around the world, not some client state that targets people willy-nilly.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Further to the questions asked by my hon. Friend the Member for Leicester West (Liz Kendall) and my right hon. Friend the Member for Exeter (Mr Bradshaw), proceeds of the crime that Sergei Magnitsky exposed and was killed over were laundered into a number of countries, in particular, by accounts from Dmitry Klyuev. No fewer than 12 other countries have, at the very least, initiated investigations into money laundered from this crime, because they believe that the necessary level of evidence has been met. Why has not one of the five UK authorities presented with this complaint over the past eight years, at the very least, done the same?

[Mr Wallace]

If the hon. Lady has an issue about whether or not the National Crime Agency or the police have taken action, it is a matter for her to raise with the National Crime Agency. I have raised the same issues with the National Crime Agency—I have asked it, but it is operationally independent. What I can say is that by using the Proceeds of Crime Act, since 2010, we have recovered £1.4 billion of assets from crime. That is making a difference; it is taking the money out of the pockets of criminals, both internationally and domestically.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. Friend agree that although the Labour party talks about money laundering and tax evasion, the record clearly shows that it is this Government who are leading the world in dealing with these issues?

[Mr Wallace]

If we look at the tax gap, that absolutely shows that this Government have the lowest tax gap. It is far, far better than it was under the Labour party.

[Several hon. Members rose—]

[Mr Speaker]

Order. I note that Members only on the Opposition Benches—a large number of them—are standing. True to form, I am sure that they will want to behave in a comradely fashion towards one another, recognising that a long question by one will stop another. I am sure that they are not the sort of people who would want that to happen.

[Toby Perkins (Chesterfield) (Lab)]

Further to the questions that have been asked, the Minister might hide behind operational independence, but what does it say about this country when we are the only one that does not believe the threshold of evidence has been met? What leadership is the Minister providing, so that the UK takes this seriously, as all these other countries are doing?

[Mr Wallace]

Unless the hon. Gentleman can come up with an alternative to operational independence and the rule of law, he has to understand that that is how we operate. The National Crime Agency has been asked on a number of occasions, before a number of Select Committees in this House, about exactly that case. I refer him to the answers that the National Crime Agency gave to those Committees.

[Ian Murray (Edinburgh South) (Lab)]

What proportion of Scottish limited partnerships have not provided ownership information, and how many have been fined for not doing so?

[Mr Wallace]

I cannot give the hon. Gentleman the answer from this Dispatch Box, but like the Scottish National party, I have been concerned that Scottish limited partnerships are remarkably popular with countries such as Russia and Ukraine. Far greater numbers are being used by those countries than they currently are by Scotland. I shall write to him with a detailed answer to his question.

[Alison McGovern (Wirral South) (Lab)]

Given the importance of wider economic sanctions to protect those in the most vulnerable countries in the world who are currently having their human rights routinely abused, what review has the Minister undertaken of the effectiveness of economic sanctions against businesses?

[Mr Wallace]

I will ask the Treasury, which leads on economic sanctions, to write to the hon. Lady with exact details of what assessment it has made of their impact. Sanctions, of course, do work in a number of scenarios. That is why we are keen to get the Sanctions and Anti-Money Laundering Bill through the House of Commons, working together to make sure that we get the Magnitsky amendment correct. It is certainly why this piece of legislation is very important.

[Stephen Kinnock (Aberavon) (Lab)]

France, Germany, Switzerland, Spain and many other countries have opened criminal investigations into the people who are directly responsible for the brutal murder of Sergei Magnitsky. Why is the United Kingdom the only country not to have done so?

[Mr Wallace]

Is the hon. Gentleman asking about opening an investigation or prosecuting? As I said earlier, we are not commenting on what investigations we have live and open. That has been very clear: we cannot comment on whether or not an investigation is open into anyone. Whether it is a Russian oligarch, people who are alleged concerning Magnitsky, or someone under investigation in the hon. Gentleman’s local constituency, that is not how it operates in this country, because we protect the operational independence of the police.

[Ian Austin (Dudley North) (Lab)]

The best way to target Putin is to go after the people around him who enrich themselves to the tune of billions. It is estimated that people closely linked to Putin own property here in London worth more than £1 billion. The Minister could start by looking at the activities of Igor Shuvalov, who, as we have heard today, is reputed to own—just a few hundred yards from where we are standing now—flats worth £11.4 million, yet he earns just £112,000. That is clearly the result of corruption; what is the Minister going to do about it?

[Mr Wallace]

As the hon. Gentleman will have heard me say numerous times this afternoon, there are plenty of individuals who get pointed out to us and into whom we open investigations. What we cannot do is provide a running commentary on who is under investigation. As I have stated and as we have demonstrated in our legislation over the past few years, we on the Conservative Benches are determined to investigate and deal with overseas corruption and oligarchs putting money here. The best example I can give is the unexplained wealth order issued only a few weeks ago: it related to an overseas oligarch who was also a PEP and to £22 million of property in the south-east. We will continue to target such people because we think it is the right thing to do.

[Kate Green (Stretford and Urmston) (Lab)]

Foreign nationals still come to the London financial markets to raise funds and then repatriate them to organisations that may be the subject of western sanctions. What action are the Government taking to prevent that?

[Mr Wallace]

The Sanctions and Anti-Money Laundering Bill, which is coming through the House, will give us new and more tools to deal with such behaviour. When the Criminal Finance Act 2017 transited the House and people made the point about the Magnitsky amendment, I pointed out that it was against criminal assets, and when the sanctions Bill comes forward, we will take steps to address the issue. So we raised this problem long before it was an issue in the sanctions Bill—last year, during the passage of the 2017 Act. Overall, we are determined to tackle this and to send the right message. The hon. Lady will have heard the long list with which I tested your patience at the beginning, Mr Speaker, and I find it ironic that the Labour party, which came up with precisely almost nothing in government, is criticising this Government, who are actually capturing proceeds of crime and taking them away from bad people.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The laundromat scheme was first exposed in The Independent in 2014, and since then The Herald newspaper in Scotland has done excellent work highlighting the use of Scottish limited partnerships in that process. Given that the Government are now listening to my colleagues’ calls for action, can the Minister confirm a timeframe for legislation to address SLPs?

[Mr Wallace]

The hon. Gentleman is absolutely right. We are determined to try to deliver on that. The work is being led by the Department for Business, Energy and Industrial Strategy, and the Home Secretary and I are pressing the case to give hon. Members more solid answers about exactly when we will deal with it. I pay tribute to The Herald. Throughout all this, it has often been journalists who have made the difference in exposing all sorts of corruption around the world—and some have paid for it with their lives—which is one reason the Conservative party think that press freedom is so important.

[Alex Norris (Nottingham North) (Lab/Co-op)]

In the Sanctions and Anti-Money Laundering Bill Committee, Ministers stated that the British property register would not be ready for three years and rejected amendments on tax havens in the overseas territories and Crown dependencies. The events of the past week or so have made this approach look pedestrian and too modest. Will Ministers now support similar amendments?

[Mr Wallace]

We are often up against some of the best-resourced and sophisticated crooks in the world, so we want to get it right and make sure it works. This will be the first measure of its kind in the world if we do it. Let us make sure it is correct and accurate, so that we can then act on it, gather evidence, seize assets and make the difference. I am sure the hon. Gentleman would not want us to rush through a half-hearted register that does not work.

[Wes Streeting (Ilford North) (Lab)]

An unacceptably large number of the Minister’s answers have involved being redirected to other agencies—people might wonder why the Government are so unaccountable on these issues—but perhaps he can answer a question about tier one investment visas. Many such visas were issued to Russians during a period when almost no background checks were carried out. What are the Government doing to look retrospectively at those cases to make sure that individuals with wealth obtained through dubious means cannot operate freely in our city and country?

[Mr Wallace]

The relevant part of the Home Office keeps a continual check on existing visas and new visa applications, and we will of course make sure that when something is wrong we take action either to remove a visa or prevent one from being issued.

[Catherine West (Hornsey and Wood Green) (Lab)]

A recent review of legal practices showed that only one third of them had taken the mandatory risk assessment approach to money laundering. What can be done to further push legal and accounting firms to do the right thing in the City of London?

[Mr Wallace]

The hon. Lady makes a very important point. I am leading the SARs reform programme, which we think will address the problem of “quantity not quality”. We want to ensure that those who submit suspicious activity reports do some of the work and to ensure that they produce reports of good quality, so that we can act on them. They have been used too defensively: banks have just loaded them up and left it to the operational partners to sift through them. We are also working with the regulators to ensure that we send strong messages to all the other facilitators who for too long have been let off taking a strong role in stopping money laundering.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Minister was not able to respond immediately to the question from my hon. Friend the Member for Edinburgh South (Ian Murray) about Scottish limited partnerships and their ownership structure, perhaps because 71% of SLPs are registered in anonymous overseas companies and tax havens such as the British Virgin Islands. When will he legislate to bring SLPs within the scope of the persons of significant interest register to ensure that there is real transparency and to stop the siphoning of money?

[Mr Wallace]

I think that I did answer that question and the one asked by the hon. Member for Dundee East (Stewart Hosie). I made the point, as the hon. Gentleman has, that the vast majority of such arrangements are being used not by Scottish companies but by overseas companies. We are working with the Department for Business, Energy and Industrial Strategy to ensure that we get this right, but I am keen for measures to be introduced to stop their use by organised criminals around the world.

[Chris Bryant (Rhondda) (Lab)]

There does not seem to have been very hasty action by the Government in relation to the Magnitsky Act. Members on both sides of the House have been calling for that for a long time, and, indeed, the House signed up unanimously to an agreement many years ago.

Has the Minister ever tried to do a little piece of elementary research on a trust fund? Has he tried to find out who is the beneficial owner, or, for that matter, the controlling interest? Who actually benefits from any of these trust funds? Having had to do quite a lot of research myself recently, I know that it is impossible to find out anything. It is all tied up. No one can even find out who has appointed the trustees. It is a complete mystery. Let me say to the Minister that until he deals with that issue of trust funds in this country, we will never manage to deal fully with the money laundering or the corruption in the City.

[Mr Wallace]

The hon. Gentleman makes a powerful point. The hiding of identity is a big challenge for law enforcement agencies, and we must do more to tackle it. We expect 150,000 trusts to be on the register by this March, starting with the public register of beneficial ownership.

As I have said, there is more to be done about Scottish limited partnerships. On most occasions, we manage to find out who is behind them, but, as the hon. Gentleman has said, it takes a lot of effort, which I believe could be reduced. Once we know who is behind these shadowy organisations, we can sometimes take even more action against them.

[John McDonnell (Hayes and Harlington) (Lab)]

On a point of order, Mr Speaker.

[Mr Speaker]

I think the point of order appertains to the recent exchanges, and I will therefore take it now.

[John McDonnell]

I am grateful to you, Mr Speaker. We were hoping for a much more bipartisan approach today, but the Minister started off by making a statement in which he implied something that I do not think he wanted to imply, namely that we had not raised the issue recently. He implied that I had not raised it since, I think, 2016.

On 21 March 2017, Mr Speaker, you were kind enough to allow me a very similar urgent question, in which I asked the Government to address the allegations

“that, via an operation referred to as the “global laundromat”, banks based in Britain have been used to launder immense sums of money obtained from criminal activity in Russia linked to the FSB spy agency there.”—[Official Report, 21 March 2017; Vol. 623, c. 777-8.]

I am sure that the Minister would not want in any way to mislead the House, but I think it important for him to correct the record and to confirm that we have raised the matter consistently, not just in that urgent question but time and again during the Committee stage of the Sanctions and Anti-Money Laundering Bill.

[Mr Speaker]

The right hon. Gentleman has put the position very clearly on the record. The Minister is welcome to reply if he wishes. He is not obliged to do so, but if he does, it will stand in the Official Report.

[Mr Wallace]

rose—

[Mr Speaker]

Is the Minister bobbing?

[Mr Wallace]

I am grateful to the right hon. Member for Hayes and Harlington (John McDonnell) for referring to his stance back then. Before coming to the Chamber, I carried out a Hansard search for the word “oligarchs”, to which he has not referred. The only time it came up was in a 2016 report, when the right hon. Gentleman spoke about the schools White Paper. If Hansard was incorrect or I did not see that, I apologise to the right hon. Gentleman, but the clear point that I was trying to make was that Labour was almost entirely silent on all the measures that the Government introduced in the Criminal Finances Act 2017. This is all about something other than money.

[Mr Speaker]

I am grateful to the Minister. I simply say to him that Hansard is not incorrect, and it is very important that we acknowledge the magnificent work of those who prepare the Official Report. I am not going to call the right hon. Gentleman the Minister, whom I have known for a long time, a semantic pedant, because that would be unkind, but his point seemed to focus on the use of the word “oligarch”. He has made his own point in his own way, but the shadow Chancellor’s factual recollection is also very clearly on the record.