Overseas Territories: Tax Transparency

Rachel Blake Excerpts

Wednesday 5th February 2025 Westminster Hall

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

I thank my hon. Friend the Member for Kensington and Bayswater (Joe Powell) for securing this debate. I have joked in previous debates that I could be known as the Member of Parliament for frozen assets; nothing could be truer today, as that is the topic at hand.

At least £5.9 billion in suspect funds has entered the UK property market via shell companies registered in the overseas territories. Over half of that money can be found in my constituency of Cities of London and Westminster. These forces blight our communities, driving out residents and local businesses and replacing them with empty shells of buildings owned by empty shells of companies.

Over the past few months, key pillars of the City and Westminster communities have been at risk of closure, including the Jubilee Hall gym and the Prince Charles cinema. Most notably, the central London YMCA, the oldest YMCA in the world, will close its doors this week. These institutions have always had to compete against the great and the good of London’s residential and business community, but they are increasingly being crowded out. They are bidding in a rental market against shadowy owners with nigh unlimited funds.

Individuals who have frequently made their wealth from corruption and the abuse of power, by skimming money from state procurement contracts or directly acquiring assets, are funnelling the proceeds of this ill-gotten wealth into our property market. They include Alexander Zakharov, the creator of the deadly Lancet drone being used to terrorise the people of Ukraine, whose family own a £1.5 million flat overlooking Big Ben; Daim Zainuddin, a former Malaysian Minister of Finance accused of extraordinary misappropriation of public funds, who owns a £28.6 million office in the City of London; and Mikhail Gutseriev, a major backer of the Belarusian dictator Alexander Lukashenko, whose son Said owns a £160 million portfolio of properties across the Cities of London and Westminster. The immense level of money laundering in London corrodes our communities, damages democracy around the world and blocks the growth prospects of our capital’s economy.

We have already heard why it is so important for the overseas territories, particularly the British Virgin Islands, to implement public registers of beneficial owners. Knowledge about property ownership is a vital tool for protecting our country from kleptocrats. Stonewalling by the authorities in the BVI leaves those who work tirelessly to expose cases of corruption fighting with one hand tied behind their back. Currently, only those in law enforcement can access information about beneficial ownership, and they have to apply for it on a case-by-case basis. The move to fully public registers of beneficial owners is sorely needed and long overdue. Public registers were first meant to be implemented by the end of 2020, which was 1,497 days ago, or 30 Liz Truss premierships.

The BVI has now, finally, suggested an approach, but it is simply not good enough. It will require applicants to identify the beneficial owner when requesting corporate data; essentially, it asks them to know the precise information that they are after. Under the draft policy, applicants could get hold of company ownership information only if they were involved in regulatory or legal proceedings about financial crime or a criminal case in which a court has determined that the data could help to solve the investigation. Most alarmingly, the BVI registrar would be required to tip off beneficial owners within five days of an application being made, allowing beneficial owners to liquidate or move assets.

At this stage, we really need to ask whose side are the BVI authorities on. Do they stand with local communities like mine, with Parliament and with my constituents in the fight against corruption, or do they stand with the kleptocrats who are using the property market as a rainy-day fund? I am pleased to see that this is a priority for our Government and our relations with the overseas territories. This Government are pushing for greater transparency from them. I wholeheartedly support the Government in those efforts. I look forward to further updates and further opportunities to speak about the issue.

[Several hon. Members rose—]

Frozen Russian Assets: Ukraine

Rachel Blake Excerpts

Monday 6th January 2025 Commons Chamber

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

I thank the hon. Member for Tunbridge Wells (Mike Martin) for securing this debate. I speak today as the constituency Member of Parliament for many of the assets we are discussing. It is easy to throw around the many billions of Russian-owned wealth across the country; for that reason, when referencing the luxurious wealth of Putin’s cronies, all of my calculations today are going to be in the unit of Storm Shadow missiles, each of which costs £800,000. These are the weapons of war that we talk about when we discuss funding the conflict in Ukraine.

In total, 28,375 Storm Shadows’ worth of Russian wealth is sanctioned, with profits from that wealth used to repay the extraordinary revenue acceleration funding the UK’s support of Ukraine. To put that in perspective, the UK’s total stock of Storm Shadows was estimated in 2023 to sit between 700 and 1,000. In Westminster alone, according to research by Transparency International, 537 Storm Shadows’ worth of property is owned by Russians accused of corruption or with links to the Kremlin, property that stretches from Belgravia to St James’s and St John’s Wood. Indeed, the most valuable home in the UK, Hanover Lodge, was sold last year for 141 Storm Shadows by Andrey Goncharenko, a former Gazprom executive with ties to the Kremlin. A great deal of that property is owned by or connected to sanctioned individuals, including former Deputy Prime Ministers Igor Shuvalov and Vladimir Potanin.

The existence of this property is not just an economic issue; its impact also reaches into the very hearts of our communities. Our buildings and neighbourhoods are weakened when they are used for profit rather than purpose. A strong community is one in which neighbours can be the ones who look after your kids when you have a job interview. It is those communities that are undermined when we let towers of vacant investment properties propagate and turn a blind eye to foreign wealth emptying out British homes. Most recently, these communities have opened their arms to hundreds of thousands of Ukrainians fleeing from Putin’s illegal invasion. I am the constituency Member for a number of those refugees, and it is thinking of them that gives the overwhelming majority of us in this House the resolve to use every tool at our disposal.

That brings us to today’s topic: the seizure of sanctioned assets. As we heard earlier, the significance of this step and the precedent it would set should not escape us as legislators. The first ever permanent seizure of frozen assets occurred only last year, when the National Crime Agency confiscated the assets of Petr Aven for suspected evasion of sanctions. To set out an intentional policy of seizing those assets would be a bold step, and one that would doubtless lead to legal challenge. However, it must be worth us considering every option available for sanctioned assets, particularly when there is a clear argument that it would be justified to use them in supporting the Ukrainian people.

Putin’s invasion of Ukraine is in complete contravention of international law and violates the sovereignty and self-determination of the Ukrainian people. Furthermore, as has been confirmed by the UN’s independent international commission of inquiry on Ukraine, it has enabled a string of other war crimes, including indiscriminate attacks, violations of personal integrity, including executions, torture and ill treatment, and sexual and gender-based violence. As was made clear during the application of the original sanctions, the sanctioned individuals are playing a direct part in this war. They range from propagandists spreading disinformation about the conflict to garner public support, domestically and across the globe, to industrialists manufacturing the chemicals used in Russian weapons, and military and security personnel directly contributing to the invasion.

When the war in Ukraine is over, questions will remain about what we do with the 28,000 Storm Shadows of sanctioned wealth belonging to those who funded, championed, and even fought in Putin’s illegal invasion. We must take this opportunity to consider what sort of country we want to be when it comes to that dirty money, and to ensure that we do not let our economy be complicit in the forces that fund evil across the world.

Oral Answers to Questions

Rachel Blake Excerpts

Tuesday 26th November 2024 Commons Chamber

[Hamish Falconer]

We considered this question at exhaustive length yesterday. I repeat that the shadow Attorney General has written on the question of which elements of international law are most properly followed in this case, and the Attorney General is set to respond, although we suspect that this case would go to the courts in the usual way.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

My constituent, the British citizen Jimmy Lai, is in failing health, and I thank the Foreign Secretary and his Department for all their work to uphold his rights under international law. Can the Foreign Secretary share his assessment of the scale of international support for Jimmy Lai’s release?

[Mr Lammy]

“Massive” is probably the word I would use. His case is being raised in America and across the European Union, and we are raising it too. His trial has begun, and he is now well into his 70s, which is why I have made the case to the Chinese that he should be released. This is becoming cruel and unusual punishment, frankly.