Our letter to UK Government: essential measures to counter illicit finance

Dear Foreign Secretary,

CC: Chancellor of the Exchequer, Home Secretary

We are writing to you as Chairs of the UK Anti-Corruption Coalition (UKACC) which brings together the UK’s leading organisations working on anti-corruption, illicit finance, and public integrity. The Coalition would like to welcome you to your new roles.

The Labour Party has engaged with members of our Coalition over the last few years on the issues of corruption and illicit finance - not only to ensure effective scrutiny of the previous government’s economic crime legislation - but also in the development of its own commitments for a new government. We welcome the strong commitments made in the manifesto and in speeches to tackle this issue.

Addressing corruption and illicit finance requires a high level of cross-Whitehall collaboration with ministerial leadership. Cross-departmental coordination is also necessary to deliver many of the manifesto’s commitments - from working with international financial centres to tackle corruption and money laundering, to protecting the public purse from fraud and corruption.

To deliver on these commitments and truly make the UK the anti-corruption capital of the world, we urge your departments to work together to deliver the following crucial upgrades to the UK’s anti-corruption framework:

1. Bring forward a new, ambitious 5-year Anti-Corruption Strategy to be published by January 2025.

Many manifesto commitments require a joined-up, cross-government strategy with strong leadership to ensure that all departments play their roles. We urge you to give the Joint Anti-Corruption Unit a full mandate to begin multi-stakeholder consultation on a new strategy at the earliest opportunity and to draw up a delivery timeline. We have already written to the Prime Minister to urge his government to appoint a new Anti-Corruption Champion to oversee the strategy as soon as possible. Additional clarification on the Government’s plans for the ongoing Economic Crime Plan 2 would also be welcome.

2. Fix remaining economic crime loopholes

Despite the introduction of two Economic Crime Acts in recent years, major loopholes remain. Firstly, Companies House must be able to publish the details of trusts controlling offshore companies holding land in the UK, which is currently a major gap for perpetrators of illicit finance to exploit. Secondly, the Government must close the transparency gap which allows for the opaque ownership of non-Scottish Limited Partnerships by bringing these entities under the UK’s broader PSC regime. Thirdly, we must enable Companies House to require more information on the identification of shareholders - another major gap in our economic crime defence.

3. Lay out a timeline, and agenda, for multi-stakeholder engagement on the international summit of financial centres to tackle dirty money

One of the main commitments from the Labour Party before the election was for a UK-hosted summit to launch a sustained initiative to tackle corruption and money laundering. International financial centres play a critical role in laundering and facilitating dirty money across the planet. As one of the world’s leading financial centres, the UK has a particular responsibility to show leadership, in particular through the introduction of public registers of beneficial ownership in its offshore financial centres. We would welcome the opportunity to engage in multi-stakeholder consultations about the details and objectives of the summit.

4. Review the ‘invest to save’ case for reinvesting recovered assets back into economic crime enforcement.

Economic crime fighting bodies in the UK are facing huge challenges of morale, retention, and recruitment across the board. Smart investment in specialist skills and technology is critical to ensure that bodies such as the NCA are fit for purpose. We urge the new government to consider fundamental reform to ensure that bodies get a fairer share of the seized assets and fines they bring into the public purse. Greater ringfenced reinvestment in law enforcement capability will yield huge rewards not just in increased receipts for the Exchequer, but in lowering the costs of economic crime to society as a whole.

5. Commit to ambitious Anti-Money Laundering reform

The Government should publish the outcomes of outstanding anti-money laundering consultations by the end of the year, in particular the consultation on the UK’s anti-money laundering supervisory system and commits to ambitious reform and consolidation of that system. This reform should include relieving failing supervisors of their responsibilities and drafting legislative provisions for consolidation of the professional body supervisors, with new bodies given the necessary powers, resources and transitional arrangements.

With consideration to the above points - preparations are already underway for the Financial Action Taskforce review in 2027, which will require the UK to demonstrate greater effectiveness in anti-money laundering supervision. Our coalition will be seeking to engage the Government on the evaluation, and a commitment to include civil society during the onsite visit.

As a coalition of the UK’s leading anti-corruption organisations, we are keen to support you to deliver this agenda and would be delighted to discuss the issues outlined in this letter in more detail.

Yours sincerely,

Gavin Hayman - Co-Chair of UK Anti-Corruption Coalition and Exec. Director, Open Contracting Partnership

Thom Townsend - Co-Chair of UK Anti-Corruption Coalition and Exec. Director, Open Ownership