Boris Johnson has backed down on plans to allow Russian oligarchs 18 months to register ownership of luxury properties in the UK, slashing the proposed “grace period” to six months.
And he announced plans to streamline the process of sanctioning individuals with links to Vladimir Putin, by removing the legal requirement for government lawyers to show that measures are “appropriate” before implementing them.
But the changes fall well short of demands from Labour, who had called for a maximum 28-day delay before registers must be updated to identify the true owner of a property rather than a shell company.
Shadow foreign secretary David Lammy said the government’s tardiness in dealing with Russian “dirty money” in London has left the UK trailing behind the US and EU in imposing sanctions on Putin’s cronies in response to the invasion of Ukraine.
Mr Johnson’s decision to amend the Economic Crimes Bill before it comes before the Commons on Monday amounts to an admission that Britain’s sanctions regime has been less able to respond swiftly than its American and European allies, who have already sanctioned hundreds of individuals.
Legislation passed in the wake of Brexit to allow the UK to operate its own regime independent from the EU included measures requiring a watertight legal case to be established for each individual targeted – something which officials admit could take months.
Removing the “appropriateness” test will allow the designation of groups, allowing the UK to align its sanctions lists with those imposed by Washington and Brussels.
Those named could have travel bans imposed as well as asset freezes which prevent them from selling, renting, visiting or even repairing UK properties with a total estimated value of well over £1bn. Deputy prime minister Dominic Raab has even suggested the homes could be seized to house Ukrainian refugees.
London has so far sanctioned only 15 oligarchs, including Alisher Usmanov, who has had financial links with Arsenal and Everton football clubs.
Critics have warned that delays will allow billionaires who fear being put on the UK blacklist time to sell off assets and move their money abroad. Putin associate Roman Abramovich has announced plans to sell Chelsea FC, though there has been no official indication that he is being considered for sanctions.
Meanwhile, ministers said that keeping a six-month grace period for property registration would help crack down on money while giving people with legitimate reasons to hold property in overseas entities time to comply.
Mr Johnson said: “The UK has led the way with the toughest package of sanctions against Putin’s regime and we’re bolstering this with new powers in our arsenal to go further and faster.
“We will ramp up the pressure on those criminal elites trying to launder money on UK soil and close the net on corruption. They will have nowhere to hide.”
But Mr Lammy responded: “It is totally unacceptable that Putin-linked oligarchs who should have already faced sanctions are being allowed to move their money around because of government incompetence.
“Ministers should have introduced the laws needed to work in lock-step with our allies and partners months ago, not be left sanctioning hundreds fewer individuals and entities than the EU and the US.
“We welcome the government’s U-turn under pressure from Labor to tighten the law so we can move on more oligarchs tied to Putin’s regime, but we must also move faster, acting against these individuals in days not months.”
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.