Beneficial Ownership Registers: Overseas Territories and Crown Dependencies

Debate between Margaret Hodge and Nigel Evans

Thursday 7th December 2023 Commons Chamber

[Dame Margaret Hodge]

I am not sure I can answer that, because I do not know whether they know, but there have been one or two instances where whistleblowers have come to see me—about Jersey, for example. It has been very difficult to find out and identify how much the Jersey authorities knew, and why or whether they took action on the information that is available. It would be wonderful if the right hon. Gentleman’s Committee could look at this issue in greater detail to establish that.

Illicit finance is not just an evil in itself: it is the golden thread that runs through all serious crime, from drug smuggling to people smuggling. It threatens our national security, hits the poorest countries the hardest, and starves our public services of much-needed investment. It was in recognition of that importance that we established the strong cross-party consensus in the House that led to the 2018 law, which was agreed unanimously in this House. Ten years have passed since David Cameron first openly supported public registers, and five years have passed since we legislated, but we are still waiting. That is not good enough.

It is the job of the Executive to implement the will of Parliament. To that end, I ask the Minister to take two actions. First, will he now lay an Order in Council, requiring the overseas territories to introduce public registers of beneficial ownership forthwith? Secondly, will he legislate to require Crown dependencies to do the same? If the Government do not act, I can assure him that Parliament will, for we must—for the sake of our economy, for the sake of our security and for the sake of our reputation. I urge the Government to move forward on this issue.

[Mr Deputy Speaker (Mr Nigel Evans)]

Five people have indicated that they wish to speak, and the wind-ups will begin at 4.30. That means eight minutes for Richard Thomson, 10 minutes each for Stephen Doughty and Mr Rutley, and two minutes for Margaret Hodge to wind up. If people stick to five minutes, everybody will get equal time.

Lawfare and Investigative Journalism

Debate between Margaret Hodge and Nigel Evans

Monday 17th October 2022 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

I am grateful to the right hon. Gentleman for giving way and congratulate him on securing this debate and on making a fantastic speech. He has been a passionate and effective campaigner on the growing problem of egregious strategic lawsuits against public participation—SLAPPs—and has argued, along with the hon. Member for Isle of Wight (Bob Seely), for urgent action to stop these abuses.

I want to raise the case of Dmitry Leus, a UK resident of Russian-Turkmen origin, who is threatening libel action against Chatham House because of his inclusion in its excellent report, “The UK’s Kleptocracy Problem.” Leus was a Russian banker, convicted of money laundering in Russia in 2004, who arrived in the UK on a Cypriot passport. He has donated to the Conservative party and chaired his local Conservative association. He tried to donate £500,000 to the foundation of the then Prince Charles, but the donation was spurned when the charity learnt of his conviction. In July my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) said in this House that Leus is “absolutely dependent” on the Russian security services.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is an intervention so it will have to brief.

[Dame Margaret Hodge]

Yes, I will be very brief.

Since coming to Britain, Leus has tried to make us believe that his conviction was overturned, but this is untrue: it was struck off his records so that he could engage in business. After seven months of increasing demands, and due to the costs of defending the case—estimated at some £500,000 before trial—Chatham House has been forced to agree to his meritless claim and excise the report of all mentions of Mr Leus.

Does the right hon. Member for Haltemprice and Howden (Mr Davis) agree that this case appears to be yet another example of a powerful, wealthy Russian abusing the British legal system through lawfare to muzzle important research in the public interest?

[Mr Deputy Speaker]

I was extraordinarily generous.

Economic Crime: Law Enforcement

Debate between Margaret Hodge and Nigel Evans

Thursday 7th July 2022 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

It is a bizarre day to be debating a really important issue. I am grateful to the Backbench Business Committee for selecting it, and it is a privilege to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake), with whom I am working closely on many of these issues. I will say something a bit general before moving on. Have I got 10 minutes, Mr Deputy Speaker, or a little bit more?

[Mr Deputy Speaker]

You are not constrained. All I would say is to focus—

[Dame Margaret Hodge]

I will keep it tight.

It is shocking but true that it was the tragedy of the war in Ukraine that got our Government to start thinking about the serious threat that the country faces, in both our economy and our society, from the spiralling menace of illicit finance and all that goes with it. I have said many times in the House, and I repeat today, that we will never enjoy sustained, good economic prosperity on the back of dirty money. We earned the reputation on which our superb, successful financial sector was built by being a trusted jurisdiction, and we must maintain that. Today, we are in danger of losing that trust.

The US sees us as a high-risk jurisdiction similar to Cyprus, and Londongrad is becoming a popular term among many. We have moved off our perch as the world’s leaders in fighting economic crime. Moody’s has downgraded us, and we are slipping down the ranks of Transparency International’s corruption perception index. Everything is moving in the wrong direction. That is no surprise because, as the hon. Member said, economic crime is now massive. It costs the country £290 billion annually—more than a quarter of the Government’s total public expenditure—and all of us who are concerned with this area know that that figure is conservative. The latest figures from UK Finance that came out last week suggest that in 2020 there was an 8% increase in fraud, which of course is the biggest component of economic crime.

Much illicit finance, but not all, comes from Russia, through Russian companies and Russian individuals. As various Select Committee reports on the subject show, for too long we have turned a blind eye to the threat that Putin’s kleptocratic regime poses to our economy. Why did we do nothing after the assassination of Alexander Litvinenko in 2006, or after the poisoning of Sergei Skripal in 2018? Those were two brutal attacks on British soil.

We must add to that the findings of a recent report by Buzzfeed News investigations, which established that between 2003 and 2016, there were 14 more suspicious deaths in the UK of individuals who were hostile to the Russian state. I will mention just three of them. Stephen Curtis, the British lawyer who helped the laundering of money—potentially billions of pounds—in the UK for wealthy Russian oligarchs, died in a helicopter crash in 2004. Alexander Perepilichnyy blew the whistle on a multimillion-pound Government fraud in Russia. He flew to Britain, and died of a so-called heart attack when jogging near his home in Surrey in 2012. The coroner’s inquest said that he died of natural causes, but evidence given, I gather, behind closed doors for national security reasons said that there was no natural cause determined. Some suspect that he was poisoned. Boris Berezovsky, who made his wealth during the collapse of the Soviet Union, was famous because he was key in supporting Putin and getting him into power in Russia. In 2013, he was found hanged in his home.

Those are only three of 14 cases, but in all of them the police concluded that the deaths were not suspicious. There was no investigation, or indeed any suggestion that those were Russian state-sanctioned murders, although the US intelligence services told our police that they thought the deaths were likely sanctioned by the Kremlin. Were the police just incompetent? I doubt it. Was there pressure from somewhere else—from either our security services or our Government—to turn a blind eye to the possibility that those were state-sanctioned murders? American intelligence officials told Buzzfeed journalists that Russian killers had been able to kill in Britain with impunity. They said that one of the reasons for the reticence of enforcement agencies to act was

“a desire to preserve the billions of pounds of Russian money that pour into British banks and properties each year.”

As we debate the failures of our enforcement agencies in tackling illicit wealth, we should bear in mind that the problem goes well beyond the funding, the skills and the effectiveness of the enforcement agency. If we are really to eradicate dirty money, we require action on a wide number of fronts, as the all-party parliamentary group for fair business banking and the all-party parliamentary group on anti-corruption and responsible tax have said. We have put together a good manifesto that could form the start of concerted action to rid us of this terribly bad thing. We talk in the manifesto about action on four fronts. We need smart regulation, much greater transparency, proper accountability and enforcement. We are debating enforcement today.

All those measures are interdependent, and I worry a lot that the Government’s response through the economic crime Bill, which should be with us in the autumn, will be too little and too fragmented. Reform of Companies House, for which we have argued for a long time, is necessary but not sufficient. So are reform of anti-money laundering regulations, and an open register of property owned by foreign countries. We need co-ordinated action on many fronts if we are to clean up dirty Britain.

Today, we are focusing on enforcement. Our performance is abysmal, our record in successfully bringing bad players to account is miserable and our commitment to doing the job properly is questionable. The evidence—the hon. Member already talked about some of it—is overwhelming. The Bribery Act was introduced in 2010, and in the UK we have had 99 criminal convictions and six deferred prosecution agreements. The USA, with a similar legislative framework, has had 236 convictions in the same period. As I understand it—I could not find one, but if I am wrong, I stand to be corrected—we have never pursued a criminal prosecution against a bank for money laundering or sanctions busting. We use civil measures, but never criminal ones. In 2019, we had civil fines of £260 million. In the same year, the Americans pursued criminal action against and secured £2.5 billion from just six banks, and they secured £5 billion in civil fines.

As the hon. Member said—it is worth repeating, because it is so shocking—the Financial Conduct Authority fined HSBC £64 million in 2021 for AML failures, but nearly a decade before, it was fined £1.4 billion in America for AML offences. Standard Chartered is a British bank, so we ought to be the ones who are really responsible for ensuring that it behaves itself. What do we get from it? Fines for wrongdoing under anti-money laundering regulations of £102 million. What do the Americans get? Over 800% more: £842 million. Yet we know from the FinCEN—the Financial Crimes Enforcement Network—files that too many of our banks and too many individuals who work in our banks either passively collude with economic crime, or actively promote and facilitate money launderings. The banks that are implicated are so often the biggest British-based banks: HSBC, Barclays, Standard Chartered.

What we do in Britain is pursue the little businesses, the little men and women who are trying hard to establish new businesses here. That came home to me very much when I chaired the Public Accounts Committee and we had the leaks relating to HSBC—they were called the Falciani leaks. There were more documents relating to British accounts than, I think, for any other nation. There were 3,600 British accounts. At the time, the tax authorities said to us that there was cause for concern with about a third of those. Out of that third—about 1,200—they finally found 150 cases. How many did they pursue? One individual was charged. I could not find, in my search of Google, whether that individual was ever convicted. Look at how other countries dealt with it: every other country managed to charge more people, fine more people and get some compensation. The only thing that happened with us was that Rona Fairhead, now in the House of Lords, was on the board of HSBC at the time and was responsible for the audit committee. I cannot understand how anybody with that responsibility could not have seen a red flag when looking through the accounts from the Swiss branch of HSBC and seeing the profits being secured. The only thing she said was that she declared that the whistleblower was a criminal and that the only thing that HSBC should do was pursue the whistleblower and try to get him imprisoned.

Fraud is the crime that now affects one in 11 adults in the UK, yet convictions for fraud have collapsed by two-thirds in the past three years—cases up and convictions down. The number of criminal cases the Serious Fraud Office, in which we had great confidence, has under investigation has halved over the past three years. There have been some disastrous failures in the courts through the SFO with Serco and Unaoil, where it lost cases simply because it did not share information in a proper way—it failed to disclose relevant material to the defendants. There are lawyers in the Chamber. I am not one, but I cannot believe that it actually did that.

Sanctions

Debate between Margaret Hodge and Nigel Evans

Tuesday 1st March 2022 Commons Chamber

[Dame Margaret Hodge]

My right hon. Friend is absolutely right. That is why the Government should readily undertake that action, and I would add to that list that places in English public schools can be identified and halted very quickly.

I have been handed a list today of 105 oligarchs. I think that these names are not on the list that the hon. Member for Oxford West and Abingdon mentioned. These are wealthy businesspeople who are involved in companies of strategic importance to the Russian economy, in such things as energy, metals, chemicals, pharmaceuticals and construction. The list is of men—they are all men, I think—who have made a lot of money by robbing assets from the Russian people. That is where the money has come from and they have made their money only because they are close to the Kremlin, and they sustain their wealth only because they remain close to the Kremlin.

You will be delighted to hear that I will not read out the whole list, Mr Deputy Speaker, because I know that you think I go on a bit too long—

[Mr Deputy Speaker (Mr Nigel Evans)]

Never.

[Dame Margaret Hodge]

I will not read the list of more than 100 names, but I have picked out 10 that demonstrate not only the importance of tackling individuals, but their links to the UK. So we are complicit in this and we are facilitating it by not tackling this.

Alexander Abramov—my apologies if I mispronounce names—is the co-owner and chair of a multinational company registered and headquartered here in London, Evraz, which is a metals company. Together with his partners Roman Abramovich and Alexander Frolov, he owns a nearly 25% stake in TransContainer, which is the largest Russian container railway operator. His wealth is estimated at $6 billion.

Andrey Guryev is the majority owner and deputy chairman of PhosAgro, which is one of the world’s largest producers of fertilizers. It might well have been involved in the disaster in Lebanon—I am not alleging that, but the explosion in Lebanon arose from fertilizer that came through Russia. He has given 20% of the company to Putin’s university professor Vladimir Litvinenko, who is thought to be a proxy for Putin. He owns Witanhurst palace in London, which is valued at about £450 million, and his joint wealth with his family is estimated at $5.5 billion.

Leonid Mikhelson is the founder and chairman of natural gas producer Novatek, which is also listed on the London stock exchange. In 2017, he bought a 17% stake in petrochemical company Sibur from Putin’s reported former son-in-law, increasing his stake to 48%. His partner is Gennady Timchenko, a billionaire who is also a close friend of President Putin and whom the UK has also sanctioned. His wealth is estimated at $21 billion.

Mikhail Fridman has already been sanctioned by the EU. Fridman controls Alfa Group and LetterOne, both headquartered in Luxembourg. Fridman was investigated by the Spanish National Court between 2019 and 2021 for his role in the Zed bankruptcy. He owns £90 million of property and permanently resides in London. His worth is estimated to be $13 billion.

Vladimir Lisin is majority shareholder and chairman of NLMK Group, a leading manufacturer of steel products and responsible for one fifth of Russian steel production. NLMK is listed on the London stock exchange. Lisin also owns the railway operator First Cargo, as well as some ports and shipping companies. His estimated worth is $24 billion.

Petr Aven has been sanctioned by the EU. He is head of the largest Russian private bank, Alfa Bank. With his partners German Khan, Alexei Kuzmichev and Mikhail Fridman, Aven co-owns Alfa Group and LetterOne, both headquartered in Luxembourg. He is tipped to be the group’s direct link to Putin from his days as the Russian Minister of Foreign Economic Relations. He owns a mansion in Surrey and is a renowned art collector. His worth is estimated at $5 billion.

Suleiman Kerimov was sanctioned by the US in 2018. He gets most of his fortune from his 76% stake in Russia’s biggest gold producer, Polyus. He profited from co-investing in Russian shares together with the then First Deputy Prime Minister Igor Shuvalov, who was responsible for the Russian economy. The FinCEN files show that Kerimov paid £6 million to the Chernukhin family, who have been well exposed in the UK press. Kerimov’s family is worth some $10 billion.

Vladimir Potanin acquired a stake in Norilsk Nickel during Russia’s privatisation in 1995. Today, he owns just over a third of Russia’s largest nickel and palladium producer. Norilsk Nickel is also listed on the London stock exchange. Potanin also owns a pharmaceutical company, Petrovax Pharm, and a ski resort, Rosa Khutor, near Sochi. His worth is nearly $26 billion.

Yelena Baturina—sorry, she is a woman; Russia’s wealthiest, apparently—is the widow of Yury Luzhkov, who was the mayor of Moscow from 1992 to 2010. During her husband’s time as mayor, Baturina owned the construction company Inteko and cement factories, which benefited from the city’s commissions. She was the previous owner of the British property Witanhurst.

Finally—I have only chosen 10 out of the list—we have Vladimir Yakunin. He is an ex-KGB colleague of Putin. He ran state-owned monopoly Russian Railways between 2005 and 2015. He and his family extracted nearly $4 billion in assets and commissions from Russian Railways, in Navalny’s estimates. Most of those assets are now administered by his London-based son via a Luxembourg-registered investment fund. Yakunin is the founder and president of the Putin-linked World Public Forum “Dialogue of Civilisations”. We do not know, because we do not have a public register of ownership, but we think he owns two north London properties. I will undertake to send the Minister the complete list, from which I have raised only 10 examples.

Online Anonymity and Anonymous Abuse

Debate between Margaret Hodge and Nigel Evans

Wednesday 24th March 2021 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab) [V]]

I congratulate the hon. Member for Stroud (Siobhan Baillie) on securing this debate.

Legislating on online harms gives us a vital opportunity to call a halt to the extremism, misinformation and avalanche of harmful abuse that has become commonplace on social media. Whether on big platforms such as Twitter or fringe platforms such as Telegram, harmful content is now all-pervasive. Recently, another tsunami of racist abuse was directed at the footballers Marcus Rashford, Lauren James and Anthony Martial. Sometimes, the perpetrators can be identified, but too often those responsible do not reveal who they are. In the past, we argued that online anonymity supported open democratic debate; I am now convinced that anonymity encourages online harm that is not just hateful in itself but is used to spread lies about individuals and aims to undermine their credibility and so shut down their voices. Far from nurturing democratic debate, anonymity undermines democracy.

My work challenging Jew-hate reached a climax last autumn, with the publication of the Equality and Human Rights Commission report into antisemitism in the Labour party. Community Security Trust found that my public comments at that time led to 90,000 mentions on social media. The vast majority were abusive, racist and misogynistic.

Let me share just a few; some are very offensive.

“I hope she dies soon. Dumb bitch”;

“nothing but a couple of shit-stirring…cum buckets, bought and paid for by Israel.”

I was told I was a “Mossad agent”, a “Zionist stooge”, a wrinkly “pedo-lover”. “Traitor.” “Snake.” “Rat.” “Shill.” “Nazi”. This abuse is aggressive, harmful, yet sometimes I have no idea who said it.

Ending anonymity for those who promulgate hate or harm is key to effectively combating it. We must compel social media companies to be able to identify all users. We know that is easily done. Take the online payment company PayPal. Everyone using PayPal must provide their identity when setting up an account. Users’ identity is not public, but it can be traced if required. If social media companies acted similarly, those who use online anonymity for good, such as whistleblowers, or victims of child abuse or domestic abuse, could continue to do so, but those who use anonymity to spread harmful content would be identifiable, and could be dealt with by the appropriate authorities. Knowing that would, at a stroke—

[Mr Deputy Speaker (Mr Nigel Evans)]

I am sorry; we will have to leave it there. Time is up.