What links cybercrime, terrorism and illegal trade? Dark money

Despite fraud and money laundering costing the UK billions of pounds a year, they were not mentioned in the Queen’s speech

In March, the government published its review of all the threats facing this country, and how it would respond to them, from hostile autocracies and cybercrime to terrorism and trade. Running through the pages of this huge and complex document, like lead through a pencil, is one consistent vulnerability: dark money.

No matter who you identify as our adversaries – mafia groups, al-Qaida, whoever – they all hide their wealth in the shadows of the financial system: by obscuring ownership with shell companies, or using dodgy banks, or by holding wealth in the form of physical assets, such as fine art. And shining light on those shadows will expose their secrets and help make us all safer. It will also make us more prosperous: more than 2,200 acts of fraud are reported every day in Britain. Those crimes cost us billions upon billions of pounds, and often most affect older and vulnerable people.

So last week’s Queen’s speech was important. How would the government tackle the threat it had identified? Well, here is the sum totalof what Boris Johnson had asked Her Majesty to say about it.


For those concerned about the damage wrought by rampant fraud and corruption, this absence was depressing. We hadn’t been expecting much either. Officials had managed expectations downwards before the speech, insisting Johnson’s top priority was to repair the damage caused by Covid-19. And it’s true that many of the proposed measures in March’s review were qualified with the usual “when parliamentary time allows”.

However, the problem wasn’t just that the government was refusing to make new commitments; it was actually dropping old ones. In the previous Queen’s speech, in December 2019, the government promised to force the owners of the UK’s 100,000 offshore-owned properties to declare their identity, a step that would help to rip away the cover that kleptocrats have long used when buying their boltholes in Belgravia. That promise has since evaporated; and the long-delayed plan to impose order on Companies House, the place British and foreign fraudsters alike use to register their dodgy shell companies, is no nearer adoption either.

Of course, there is a huge amount of Covid-related damage to focus on, but the idea that the government was stopped from tackling dodgy money by this overwhelming priority is absurd. Johnson found time to promise that people would only be able to vote with photo ID, to introduce freeports, to “protect freedom of speech” in universities, and to limit judges’ ability to review the government – all of which are unrelated to the pandemic, but are also solutions to problems that barely exist, if at all.

In my opinion, freedom of speech is under threat, but not from right-on students excluding rightwing speakers. Instead it is from wealthy people using British courts to shut down investigations into their wealth. Catherine Belton, a journalist, is currently being sued by four different Russian billionaires and Rosneft, the largest state-owned oil company in Russia, over her book Putin’s People. I don’t know what the truth of the allegations are, but the prospect of facing this kind of threat deters journalists from writing about the super-rich. Neither this issue nor the tracing of the billions possibly lost to fraudulent claims of Covid relief featured in the Queen’s speech.

The government is storing up foreign policy problems. In restricting access to voting and justice, and in creating freeports – regulation-free zones for businesses to do what they like – Johnson is moving in precisely the opposite direction to the United States, where Joe Biden’s White House has promised to prioritise the battle against kleptocracy and illicit money.

Johnson’s government did intend to piggyback on the Biden agenda last month with a new sanctions regime, promising to target the assets of corrupt officials. Some were delighted at how enthusiastically the plan was welcomed in Washington, but in reality the scheme is a cherry on a non-existent cake.

The flaws in the UK’s approach to fighting illicit finance go far deeper than just some broken promises and missing legislation. Chronic underfunding of the relevant enforcement agencies over decades have rendered them barely able to use the tools already in existence.

The strategy of the National Crime Agency (NCA) to drive dirty wealth out of the housing market revolves around unexplained wealth orders (UWOs), introduced three years ago and trumpeted by ministers as the “McMafia law”. This was ruined last year by a humiliating defeat. The NCA is now facing a huge costs bill, which will inevitably make it extremely cautious about taking on plutocrats ever again. The NCA’s own director, Lynne Owens, has admitted that she is:

“bluntly, concerned about the impact on our budget, because these are wealthy people with access to the best lawyers”.

Her concern is depressing, if unsurprising. The NCA’s international corruption unit has an annual budget of little more than £4m – the kind of sum an oligarch could easily spend on a couple of trips to Harrods. Its officers are so fed up of being underpaid that staff turnover is reaching crisis levels. Financial institutions and ordinary citizens use tools such as suspicious activity reports and the police’s Action Fraud hotline to report suspicions of financial crime. But there are not enough officers to read them all, so they pile up unread.

The UK’s defences against dirty money are ramshackle, when they are not absent entirely. Rebuilding them will require years of patient, costly and hard work all across government. Sadly, on the evidence of last week, the Johnson government lacks the stamina, patience or dedication for the task.

That is good news for the world’s crooks and thieves, and extremely bad news for the rest of us. There is a hole where Britain’s policy towards dirty money should be, and I hate to think who will ride through before the government gets round to blocking it.


By Oliver Bullough, May 18, 2021, published on The Guardian

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