Britain set out ways it would crack down on “dirty money” on Monday, introducing new legislation to “hobble” Russian President Vladimir Putin by making it more difficult for those close to him to use London as their playground.
The much-delayed Economic Crime Bill comes as lawmakers from across the political spectrum call on the government to do more to stop the flow of Russian cash into London, dubbed by some as “Londongrad”, in response to Putin's invasion of Ukraine.
But while anti-corruption campaigners said some of the measures to try to force property owners to reveal their identities and strengthen unexplained wealth orders, they said without new funding, law enforcement agencies would struggle.
The new law shows the government is “determined to root out the dirty money in our economy, and importantly, to hobble Putin and his cronies,” interior minister Priti Patel told parliament.
Duncan Hames, Transparency International UK's Director of Policy, said the most significant step was a new register requiring anonymous foreign owners of British property to reveal their identities to stop some from hiding behind shell firms.
“It is a seismic change it will bring into the open ownership of companies that are registered elsewhere in the world, and in that respect, it is really ambitious and ground-breaking, but as with all these things it is not enough to write good rules, you have to commit to enforcing them,” he said.
London has long been a top destination for Russian money and Prime Minister Boris Johnson has vowed to crack down on those using the capital as a luxury playground, enjoying upmarket hotels and educating their children at fee-paying schools.
But Johnson has come under fire for being slow to impose sanctions and asset freezes on Russia oligarchs and those close to Putin's administration after the invasion of Ukraine.
The government denies there is any delay in imposing sanctions but says it needs to make sure it has solid legal cases to support any against individuals. But critics point to the European Union and United States for moving more quickly.
Italian police have seized villas in its most prestigious locations such as Lake Como and yachts worth 143 million euros from five high-profile Russians, while France has seized a yacht belonging to Rosneft boss Igor Sechin.
Transparency International said 1.5 billion pounds-worth of property had been bought by Russians accused of corruption or links to the Kremlin. Some 830 million pounds-worth of this total is owned via offshore companies.
The new law will introduce the Register of Overseas Entities but will give anonymous foreign owners of property six months to reveal their real identities - a measure the opposition Labour Party gave them too much time to move assets elsewhere.
Some lawmakers called on the government to go further, asking ministers to allow the seizure of British assets from those oligarchs suspected of having links to Putin even before the authorities had imposed sanctions. It was unlikely the government would go so far.
The main opposition Labour Party says the governing Conservative Party has received around 1.9 million pounds from Russian donors since Johnson took power. Conservative officials say the party does due diligence on all donations and only accepts those from British citizens.