Will the new Economic Crime Bill that the UK government is now rushing through Parliament really put Londongrad out of business? The government says the legislation will help it get on top of Russian property in London, enforce sanctions, and bring more McMafia cases to tackle corruption and serious and organised crime. 

But there’s a risk the new measures will be more bark than bite – particularly if they aren’t coupled with a huge new investment in law enforcement.

Let’s take the new register of those who own UK property from overseas, which is intended to tackle the £170bn worth of foreign-owned property in this country. This legislation has been sitting on a government shelf for four years.

It’s very welcome that the government is now fast-tracking the register, but it contains some significant loopholes. As it currently stands, it allows a 6-month implementation period, giving Russian oligarchs plenty of time to shift their assets out of UK property. Meanwhile, there is nothing to stop people from asking someone to hold the property on their behalf as a ‘nominee’. What's more, companies that have property transferred into their name are allowed to plead ignorance about the identity of the individual who ultimately benefits.

Ultimately, the register is only going to be effective if the UK also fast-tracks legislation to make sure all the information can be verified at Companies House, and ensures there’s robust enforcement of the rules. The government has vowed to do that, in a second bill coming in the summer – but it has been promising this legislation for several years.

Next on the bill’s list are some welcome changes to the UK’s McMafia regime (Unexplained Wealth Orders) to allow law enforcement to investigate dodgy money. There hasn’t been any new use of these McMafia Orders since 2019 when the National Crime Agency (NCA) was hit with a £1.5m bill for trying one against the daughter of the former president of Kazakhstan. The Economic Crime Bill will make sure that law enforcement doesn’t get hit with huge costs when it brings reasonable cases to court. But for all their glitz, Unexplained Wealth Orders risk being a distraction. They only help law enforcement to investigate wealth – they don’t actually enable anyone to confiscate these assets, which is a separate process. If the government is serious about actually helping law enforcement to seize corrupt assets, these protections need to be expanded across all the different tools that law enforcement uses to tackle dirty money.

And finally – sanctions. The prime minister is keen on saying that the UK is imposing the severest sanctions on Russia after its horrific invasion of Ukraine. Sadly, saying so does not make it so.

By Tuesday, the EU had imposed sanctions on 493 Russian individuals and entities, including several London-based oligarchs. On Wednesday, it was impounding a super-yacht belonging to Alisher Usmanov, an oligarch with several UK mansions. On Thursday, Igor Sechin – the CEO of Russia’s second-largest state-owned oil company Rosneft, and one of Putin’s closest allies – had his superyacht seized in France.

But the UK has yet to sanction major oligarchs now on the EU’s list – including Igor Sechin and Nikolay Tokarev, the chief executive of the Russian state-controlled oil and gas company, Transneft.

Meanwhile, UK sanctions enforcement is minimal. In the past six years, the UK’s Office of Financial Sanctions Implementation (OFSI) has imposed just six fines, totalling £20.7m, despite reports of potential sanctions breaches of up to £1bn in 2019-20 alone. The UK hasn’t imposed a criminal penalty for sanctions evasion for 12 years. By contrast, in the US’s sanctions body, OFAC has imposed 87 fines worth £1.5bn since 2017.

The bill will make it easier for OFSI to bring enforcement. But OFSI is going to require increased fire-power if it’s going to make any difference – with just 40 investigators, it is dwarfed by OFAC in the US, which has more than 250.

It's all very well putting new bills on the statute book, but the UK’s track record on enforcing them is dismal. Recent aid cuts and a 4.2% decline in the NCA budget over the past five years, alongside serious cuts at the Crown Prosecution Service, mean that law enforcement is vastly outgunned and outmanoeuvred by wealthy kleptocrats in the fight against corruption.

Unless the government massively boosts investment in law enforcement by creating a new Economic Crime Fighting Fund, no number of big new announcements and no amount of fancy new legislation is going to prevent London remaining the launderer's ultimate destination of choice.