British Labour Party veteran Dame Margaret Hodge has welcomed the UK government's attempts to get to grips with dirty Russian money.
Four stages in the process of washing dirty money which form the focus of the legislation were set out by the Financial Times.
After spending several years stuck in legislative purgatory, the UK's Economic Crime (Transparency and Enforcement) Bill came into force in March, with Russia's invasion of Ukraine the force needed to get it over the line.
The bill seeks to establish a register of overseas entities and their beneficial owners, amend financial sanctions law, and reform the UK's Unexplained Wealth Orders to empower criminal investigators.
Ms Hodge said she was promised in 2015 by [former prime minister] David Cameron that it would become law.
However, the political climate was very different then, with Mr Cameron and his executive preoccupied first with a general election and then with referendum on the UK's membership of the EU.
A London awash with Russian money was not a pressing issue.
Even a year ago, when Ms Hodge raised the prospect of imposing sanctions on Chelsea owner Roman Abramovich in response to Moscow's alleged poisoning and imprisonment of opposition leader Alexei Navalny, the suggestion came to nothing.
“Navalny said that if the West really wanted to support democracy, we ought to take action by sanctioning Putin's cronies,” she said.
While London's reputation as a willing host for dirty money predates this century, its Londongrad nickname is well earned.
A significant factor was the UK's controversial golden visa scheme, which it scrapped in February this year.
The scheme was launched by the Labour government in 2008 and allowed people with a minimum of £2 million in investment funds and a UK bank account to apply for residency.
In essence, the more money an applicant possessed and intended to invest in the UK, the more their visa application was expedited. At the same time, the applicant was allowed to remain in the UK on indefinite leave.
The scheme effectively opened the floodgates to oligarch money. The problem was, the money often was not clean.
“In theory there were checks on this but, in practice, it didn't work,” Ms Hodge said.
“Of course, it was abused by oligarchs and kleptocrats who wanted to bring their dirty money into London and use the scheme to establish legitimacy and credibility in what was seen as a trusted jurisdiction.”
Illustrating the scale of the problem, 6312 golden visas — almost half of all those issued — were investigated by UK authorities for risks posed to national security, anti-corruption watchdog Spotlight said.
The four stages of money laundering
There are four stages in the process of washing dirty money: placement, layering, integration and defence. London provided a hospitable environment for all four.
Placement
The vehicles for placing dirty money into a financial system are shell companies.
In the UK, all companies should declare beneficial ownership on the government's Companies House register. Yet this process has been easy to exploit given the few statutory measures in place to check the veracity of the information concerned.
This has meant fake names could be entered with relative impunity: Mickey Mouse and Adolf Hitler were two noteworthy examples.
It has also led to some addresses in the UK having thousands of companies registered to them.
Applications have typically been approved within 24 hours.
It is this loophole that the government's new economic crime bill is intended to close.
Layering
With the dirty money placed in the system through shell companies, the next stage is to layer it, moving it around in a series of complicated economic transactions that distance the money from its source.
At this juncture the UK's pliant banking system comes into play. According to Transparency International, about 86 banks have been involved in moving corrupt wealth around the world. Tax haven British overseas territories such as the Virgin Islands are points on this pecuniary odyssey.
Integration
Once the money has gained some distance, the next stage is to integrate it. With the assistance of lawyers and property agents, procuring assets is the way to do this and property is the asset of choice.
Russian oligarchs like Abramovich, who in 2011 bought a £90 million Kensington mansion, have traditionally used Grade 1 or 2 listed mansions in the heart of London.
Not all oligarchs are as happy as Abramovich to put their name to their assets. Transparency International estimates about 84,000 homes in the UK are owned anonymously, and £6.7 billion worth of UK property has been bought with suspicious wealth.
Defence
The final stage is ring-fencing the wealth and its owner's reputation. The UK's libel laws are favourable to the wealthy, making high courts good places to bring headline but often vexatious claims.
It's not only levers of the state which have been oligarch friendly to this point — London has also served as the crucible for an entire industry to emerge which has the sole purpose of defending wealth from prying eyes.
Given the heft of those bankrolling it, it frequently outguns press and broadcasters who may have been thinking of investigating ill-gotten gains.
Ukraine invasion a tipping point?
The sanctions imposed on Russian oligarchs mark a short-term change in the war on dirty money, but how much impact Russia's invasion of Ukraine will have in the long term depends to a large degree on the success of the economic crime bill in casting light on opaque ownership.
If the legislation does have bite, then the war could well mark the point when Londongrad loses its “grad” suffix.
Oligarchs sanctioned by the UK — in pictures
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
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Zayed Sustainability Prize
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Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
Ovo's tips to find extra heat
- Open your curtains when it’s sunny
- Keep your oven open after cooking
- Have a cuddle with pets and loved ones to help stay cosy
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- Do a few star jumps
- Avoid alcohol
UAE currency: the story behind the money in your pockets
The specs
Engine: 2.0-litre four-cylinder turbo
Power: 268hp at 5,600rpm
Torque: 380Nm at 4,800rpm
Transmission: CVT auto
Fuel consumption: 9.5L/100km
On sale: now
Price: from Dh195,000
Fresh faces in UAE side
Khalifa Mubarak (24) An accomplished centre-back, the Al Nasr defender’s progress has been hampered in the past by injury. With not many options in central defence, he would bolster what can be a problem area.
Ali Salmeen (22) Has been superb at the heart of Al Wasl’s midfield these past two seasons, with the Dubai club flourishing under manager Rodolfo Arrubarrena. Would add workrate and composure to the centre of the park.
Mohammed Jamal (23) Enjoyed a stellar 2016/17 Arabian Gulf League campaign, proving integral to Al Jazira as the capital club sealed the championship for only a second time. A tenacious and disciplined central midfielder.
Khalfan Mubarak (22) One of the most exciting players in the UAE, the Al Jazira playmaker has been likened in style to Omar Abdulrahman. Has minimal international experience already, but there should be much more to come.
Jassim Yaqoub (20) Another incredibly exciting prospect, the Al Nasr winger is becoming a regular contributor at club level. Pacey, direct and with an eye for goal, he would provide the team’s attack an extra dimension.
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MATCH INFO
Serie A
Juventus v Fiorentina, Saturday, 8pm (UAE)
Match is on BeIN Sports
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
THE BIO:
Sabri Razouk, 74
Athlete and fitness trainer
Married, father of six
Favourite exercise: Bench press
Must-eat weekly meal: Steak with beans, carrots, broccoli, crust and corn
Power drink: A glass of yoghurt
Role model: Any good man
Mercedes-AMG GT 63 S E Performance: the specs
Engine: 4.0-litre twin-turbo V8 plus rear-mounted electric motor
Power: 843hp at N/A rpm
Torque: 1470Nm N/A rpm
Transmission: 9-speed auto
Fuel consumption: 8.6L/100km
On sale: October to December
Price: From Dh875,000 (estimate)
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
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Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Fatherland
Kele Okereke
(BMG)
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
UAE currency: the story behind the money in your pockets
KILLING OF QASSEM SULEIMANI
More on Quran memorisation:
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
UAE rugby in numbers
5 - Year sponsorship deal between Hesco and Jebel Ali Dragons
700 - Dubai Hurricanes had more than 700 playing members last season between their mini and youth, men's and women's teams
Dh600,000 - Dubai Exiles' budget for pitch and court hire next season, for their rugby, netball and cricket teams
Dh1.8m - Dubai Hurricanes' overall budget for next season
Dh2.8m - Dubai Exiles’ overall budget for next season
Autumn international scores
Saturday, November 24
Italy 3-66 New Zealand
Scotland 14-9 Argentina
England 37-18 Australia
Read more about the coronavirus
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
