Summit on Illicit Finance

Edward Morello Excerpts

Tuesday 9th June 2026 Westminster Hall

[Edward Morello (West Dorset) (LD)]

It is an honour to serve with you in the Chair, Sir Roger. I join right hon. and hon. Members in thanking my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this vital and timely debate, as well as for his broader work on illicit finance. I also thank the APPG for its work.

The illicit finance summit 2026 presents a significant opportunity for the United Kingdom to demonstrate leadership in tackling corruption, money laundering and the flow of dirty money around the world. The Government’s decision to delay the summit from June to December has understandably raised concerns and is certainly disappointing. However, we now have a second chance to get it right. The additional time should not be wasted, because illicit finance is not a victimless crime. It funds organised crime, human trafficking, corruption, sanctions evasion and hostile state activity such as Putin’s illegal war in Ukraine. It undermines confidence in democratic institutions and deprives countries, particularly developing nations, of resources needed for schools, hospitals and economic growth. As has been widely stated in this debate, recent analysis estimates that up to £788 billion in illicit finance flows through the UK, its overseas territories and Crown dependencies each year. That should concern every Member of the House.

As a Member of the Foreign Affairs Committee I have heard repeatedly that the challenge is now not necessarily the lack of legislation, so the priority must be implementation, enforcement and closure of the remaining loopholes that allow illicit finance to continue to flow through the global financial system. Enforcement remains a particular concern. Despite progress in freezing criminal assets, they are not being recovered at a sufficiently high rate. Current estimates suggest that only £1 in every £4 of frozen criminal assets is ultimately recovered. That is money that should be returned to the public purse, used to compensate victims and reinvested in the fight against organised crime and corruption. The summit must therefore focus on not only identifying illicit wealth, but ensuring that enforcement agencies have the powers, the resources and—importantly—the international co-operation necessary to recover it.

As several hon. Members have highlighted, beneficial ownership transparency is an area where progress is required. The Liberal Democrats support the Government’s ambition to improve transparency across the UK overseas territories and Crown dependencies. We welcome the progress already made in places such as Gibraltar, Montserrat and St Helena. However, more needs to be done. That should not be approached confrontationally. The overseas territories and Crown dependencies are valued partners. Many have taken meaningful steps forward. The role of the UK should be to engage constructively, to provide support where needed and to work together to ensure that meaningful access to beneficial ownership and corporate information is in line with international standards. That means achieving transparency that meets, at a minimum, standards comparable to those required under the EU framework. It is also important that we recognise the economic realities faced by some of those jurisdictions. Financial services play a significant role in their economies. If we want proper, lasting reform we must help to support economic diversification and resilience so that transparency and prosperity go hand in hand.

The UK will assume the G20 presidency immediately after the summit takes place. We will also take on the presidency of the Financial Action Task Force, the world’s leading anti-money laundering body. We therefore have a unique opportunity to shape the international agenda. The summit must deliver concrete commitments that include stronger international information sharing, improved asset-recovery arrangements, enhanced co-operation on cryptocurrency regulation, and greater transparency on property ownership. International co-operation will be essential if we are to tackle criminal networks that operate across borders, move assets between jurisdictions and exploit gaps between national regulatory systems.

The summit must also address the growing threat posed by cryptocurrency and other digital assets. We have already seen evidence of cryptoassets being used to evade sanctions and move money across borders beyond the reach of traditional financial controls. Criminal networks and hostile actors adapt quickly; regulators and Governments must do the same. That is another area where international co-operation is indispensable, allowing Governments, regulators and financial institutions to share intelligence rapidly and respond to emerging threats before they become entrenched. The success of the summit will be measured by whether it creates momentum that continues through the UK’s G20 presidency, our leadership of the FATF and beyond.

We must also reflect the priorities of the countries most affected by illicit finance. Too often developing countries lose billions through corruption, tax abuse and illicit financial flows, while also having the fewest resources to tackle those issues. Ultimately, this matter is about more than financial regulation; it is about national security, economic fairness and defending democracy and public trust. It is about ensuring that the United Kingdom remains a leader on the world stage.

The delay of the summit was disappointing, but the Liberal Democrats believe it has created an opportunity and a rare second chance. I hope the Government will use the months ahead wisely.