No 10 pressured me to drop anti-money laundering measures, says ex-minister | Foreign Police
A former Tory minister, once at the heart of efforts to tackle money laundering in London, has revealed that during Theresa May’s tenure as Prime Minister, No 10 ‘leaned on him’ when he tabled amendments to introduce a public register of property owners abroad.
Lord Faulks said he first tried to put the register in the Criminal Finances Bill in 2017 and then again in a Government Money Laundering Bill in 2018. He described the foreign ownership of dirty money in London as an obscenity.
Faulks, a distinguished barrister and now an independent peer, told the Guardian he was called by Downing Street during the May term and was due to attend a meeting where he met officials from four government departments, including the Ministry of Foreign Affairs, trade officials and the Ministry of the Interior. . They told him to drop the amendments – for which he had a majority vote in the Lords – because they assured him that Whitehall had the problem in hand.
He told the Guardian: “I was obviously misled because nothing happened afterwards. I can only think that a delusional desire to protect the City of London led to all these delays.
“It’s a real irony that our reputation for upholding the rule of law is one of the things that attracts people who themselves have very little respect for the rule of law and come from countries that almost completely ignore.
“Quite frankly, I was leaned on. I was backed up at 10 Downing Street and summoned to a meeting of officials from all sorts of different departments, who told me it was very unfortunate that I was going to do this because the matter was pending.
He recalls that in return for dropping his amendments, Foreign Secretary Lord Ahmad had assured him in May 2018 that legislation on a property register would be passed in 2019, in time for it to be operational no later than early 2021. He has been asked to chair a joint committee of both houses to consider the government’s Foreign Entities Bill, the measure that would introduce the register.
The Department of Foreign Affairs has been approached for comment.
Its joint committee duly reported back in May 2019, noting that time was running out, and proposed improvements including audit controls to ensure trusts could not be used to disguise the ultimate owners of assets. When releasing his report, ministers assured him they understood the urgency.
Faulks, who has just completed a government-commissioned report on judicial review, said: ‘Over a period of five years, successive ministers offered me soothing promises that the matter was on its way. What happened? Absolutely nothing. In the meantime, frankly, we seem like a laughing stock. We are not responding to the threat of economic crime. Instead, we give out golden visas and the rest of the world must think we just don’t care.”
He called the unexplained wealth orders pathetic, pointing out that only four had been issued and said the issue of National Crime Agency resources was critical. He pointed out that the idea of a register of overseas landowners was first raised by David Cameron in 2015 and in a speech at an anti-corruption summit he called in 2016. He may have said that “the climate is changing because we hate Russians now”.
A growing number of Tory MPs are calling for unequivocal assurances that an economic crime bill containing the register will feature in the next Queen’s Speech whether or not Russia invades Ukraine.
Tom Tugendhat, chairman of the Foreign Affairs Committee, said the government had done ‘nothing’ to stem the flow of illicit funds into Britain from Russia and urged ministers to act to stand up to the Kremlin .
In a Twitter post, he accused Vladimir Putin of running a ‘mafia-like organisation’ and said ministers should stop ‘turning a blind eye’ to dirty Russian money in Britain.
“Dirty money has been a problem for decades, but its poison seeps deeper into our system,” he said. “For decades, Russian companies have used our markets to raise funds – stocks and debt – to fund the Kremlin.”
His committee has reopened its investigation into the extent of Russian finance in the UK financial system.