In a new manifesto, MPs outline their vision for UK anti-corruption laws. What does this mean for the future of bribery and corruption regulation?

A cross-party group of MPs want the next government to ensure that the UK is no longer a haven for dirty money by enacting legislation that would tighten up current corporate anti-corruption legislation. Senior MPs have called for a drastic expansion of regulated entities under the UK’s money laundering regime to include universities, PR agencies, property developers, all letting agents, commodity traders, and litigation.

The All-Party Parliamentary Group (APPG) on Anti-Corruption and Responsible Tax and the APPG on Fair Business Banking jointly launched the economic crime manifesto in which the group lays out four principles for pragmatic reform to clean the UK’s finance sector: Transparency, regulation, enforcement and accountability.

While the group acknowledged progress in recent years, specifically the passage of the UK’s two Economic Crime Acts in 2022 and 2023, they say there is still a long way to go to stop the flow of dirty money in the UK. 

“The flawed Economic Crime Act cannot be the end of the road. By putting proper transparency, tough enforcement, genuine accountability and smart regulation at the heart of all we do, we can send the world’s crooks and kleptocrats a message: Britain is once again open for clean business,” stated Dame Margaret Hodge MP, Chair APPG on Anti-Corruption & Responsible Tax, in the manifesto.

Hodge calls Russia’s war in Ukraine a “watershed moment” that put the spotlight on the UK’s dirty money culture and forced the government to take action. The legislation that was passed in response was a good first step but she says it was frustrating that the MPs could not persuade the government to go “further and faster.”

The manifesto declares that this year’s election winner has a “unique chance for global leadership” on tackling economic crime.

What can be done? The APPG points to current loopholes that allow owners to hide behind trusts. They recommend the UK’s Overseas Territories and Crown Dependencies bring in public registers of company ownership. The group is also calling for tightening anti-money laundering (AML) regulations, finding ways to legally seize frozen assets and enhancing resources for enforcement by reinvesting fines in an economic crime-fighting fund.

The APPG cannot enact legislation but it can increase pressure to force legislation. Tackling economic crime is vital to the Uk’s economy and prosperity, notes Nigel Mills MP and Co-Chair APPG on Anti-Corruption & Responsible Tax. He adds that it signals to the world that the UK welcomes legitimate and clean investment, and that it is a trusted place to set up a company and do business.

“This Manifesto sets out exactly how we clean up our act, so that our country no longer naively welcomes fraudsters, tax evaders and corrupt money. If we can deliver on this Manifesto, then we can once again proudly say that Britain is ‘open for business’,” says Mills.

The recommendations from the manifesto:

Transparency

• The Government must ensure that public registers of beneficial ownership in the Overseas Territories and Crown Dependencies are swiftly implemented with full and free access to company data, not limited to single entries. 

• There should be no greater privacy for those who own assets through trusts, compared to those who own assets directly or through an overseas company. The existing UK trust register housed in HMRC should be made more transparent, so that everybody can understand who controls trusts; such transparency would deter the use of trusts to commit wrongdoing. 

• The Register of Overseas Entities should publish information on the owners of UK properties. This should include publishing information about the parties to trusts that own properties via overseas entities, so there can get a clear picture of the ultimate beneficial owners of all properties in the UK. 

• The UK must close remaining loopholes in corporate transparency. All companies and firms should declare the identity of individuals with significant ownership or control over their activities. This must include English, Welsh and Northern Irish Limited Partnerships. The UK should also impose obligations on Companies House to verify the status of shareholders and stop people hiding behind nominee shareholders. 

Regulation:

• The Government must bring forward a ‘failure to prevent’ fraud offence, which covers companies of all sizes, and they must introduce a new ‘failure to prevent’ money laundering offence.

• The Government must introduce senior executive liability for economic crimes committed by the company as a result of neglect by a senior executive. They should introduce individual liability for senior executives who facilitate or fail to prevent these crimes from taking place. 

• The Government must broaden the scope of regulations on the enablers of economic crime. The Anti-Money Laundering Regulations (MLRs) should cover private schools, universities, PR agencies, developers, all letting agents and commodity traders. The Government should also re-examine the case for litigation to be exempt from anti-money laundering duties. 

Enforcement

• The Treasury should establish a cross-governmental Economic Crime Fighting Fund and reinvest a proportion of the proceeds of regulatory and criminal fines, asset recovery, and deferred prosecution agreements to provide sustainable funding and increase capabilities. 

• Large technology companies must play a more important role in financing enforcement agencies against economic crimes originating online. The Government must implement a ‘Fraud Levy’ on large tech corporations which inevitably facilitate fraud. 

• The Government must toughen up enforcement of sanctions in partnership with international allies. This includes using sanctions more proactively to target human rights abusers and kleptocrats, clamping down on sanctions evaders and their enablers, and properly enforcing trade sanctions so the UK doesn’t continue to support Russian fuel exports, facilitating the Kremlin’s war efforts.

Accountability

• The Government must enhance the role of the Electoral Commission as an effective watchdog with greater responsibilities, powers, and independence. Individual donations should be capped, and political parties should be required to conduct more rigorous checks on the source of wealth behind their donations.  
  
• The Government should drastically increase transparency and accountability of its lobbying framework to cover a significantly broader range of agents and activities, as well as greater transparency on the content of meetings. Ministerial and lobbying declarations should provide meaningful insights into the content of meetings conducted with a more extensive range of people, including senior advisors and Committee Chairs and covering a wider range of methods of communication. 

• The Government should reform public procurement rules so that it is easier to debar and exclude companies that have been complicit in fraud or economic crimes. The government must also seek to clawback money lost to corruption during Covid-19.  

• The UK needs stronger economic crime leadership and accountability, with the publication of an Anti-Corruption Strategy and the re-appointment of an anti-corruption champion, who can have genuine influence on government policy and resource allocation. At the operational level, the Government should appoint an Independent Economic Crime Commissioner to ensure accountability across government departments and substantially enhance the UK’s defences against and response to economic crime.