In 2017, the year following the 2016 London Anti-Corruption Summit, the government launched a UK Anti-Corruption Strategy 2017-2022 to provide a framework to guide HM Government anti-corruption policies and actions. In 2018, the Financial Action Task Force (FATF), the international standard setter for anti-money laundering and counter terrorist finance, assessed the UK and found it to have the strongest controls of any country assessed so far. Indeed, a plethora of tools are available to the UK authorities in detecting and punishing economic crime, whether it be Unexplained Wealth Orders, Account Freezing Orders or Restraint Orders. So far, however, these powers have not been used to their maximum effect; for example, since their introduction three years ago, only five UWOs have been made.
Much of the commentary on the Integrated Review of Security, Defence, Development, and Foreign Policy has focused on its treatment of the return of great power competition and the size of the UK nuclear deterrent. But there has been almost no mention of corruption and its consequences. Indeed, the word appears just seven times, four of which are in the same paragraph on the commitment to launch a second global sanctions regime on corruption as part of the UK’s Anti-Corruption Strategy, and one in a footnote. When the Global Anti-Corruption Sanctions Regulations 2021, were introduced in April, 22 individuals involved in notorious corruption cases in Russia, South Africa, South Sudan, and throughout Latin America were targeted by imposing asset freezes and travel bans against them. Quite apart from some notable omissions, this rather smacks of shutting the stable door after the horse has bolted rather than disrupting corrupt activity in the first place.
A commitment to tackle illicit finance, mostly in connection with serious organised crime, fares slightly better with fourteen mentions, including the recognition that by undermining good governance and faith in our economy, it tarnishes our global reputation by allowing corrupt assets to be held in the UK. But there are few clues though about how this will be addressed beyond a bland statement about how, under an Economic Crime Plan dating from 2019, the number of trained financial investigators within our police forces will be increased; the Suspicious Activity Reports regime overhauled to ensure critical intelligence informs their investigations; and the National Economic Crime Centre bolstered. Legislation will be introduced that tackles economic crime, including the use of UK corporate structures in facilitating high-end money laundering, reforming Companies House registration and limited partnerships, and creating a register of overseas entities owning property in the UK. But this reads more as a wish list than a concrete plan, particularly as it is qualified by ‘as soon as parliamentary time allows.’
A total of £83 million is pledged to implement all these measures. However, there is no corresponding commitment of funds to support the UK’s Overseas Territories with technical and financial assistance in order to aid them with their commitment to introduce public registers of company beneficial ownership, in line with obligations under the Sanctions and Anti-Money Laundering Act (2018), by 2023.
The Integrated Review recognises that conflict and instability will continue to pose a major test to global security and resilience, marked by weakened or failed states, extreme poverty, and flourishing transnational security challenges. Again, this is not followed through beyond a general statement about working to reduce the frequency and intensity of conflict and instability, to alleviate suffering, and to minimise the opportunities for state and non-state actors to undermine international security. Although merging of the Department for International Development with the Foreign & Commonwealth Office should, in theory, bring more coherence to this area, it remains to be seen whether old rivalries can be set aside. Perhaps a test of this will be the integrated Review’s stated priority to establish a more integrated approach to government work on conflict and instability, including establishing a new conflict centre within the FCDO, tightening the focus of the cross-government Conflict, Stability and Security Fund, and placing greater emphasis on addressing the drivers of conflict (such as grievances, political marginalisation and criminal economies), atrocity prevention and strengthening fragile countries’ resilience to external interference – but not, apparently, corruption. The aim is to enhance our impact and reduce the risk of ‘mission creep’ or of inadvertently doing harm by working with governments and civil society in regions that are of greatest priority to the UK.
Transparency International, the global anti-corruption NGO defines corruption as the ‘abuse of entrusted power for private gain’. One of the ways in which corrupt individuals are able to siphon off funds from state budgets and launder the proceeds of their crimes is through secretive shell companies registered either in the UK or in one of its offshore financial centres. Despite efforts to prevent money laundering in recent years, as recognised in the Financial Action Task Force’s report on the topic in December 2018,