博客 / April 11, 2014

Why do we let the corrupt hide their loot in London?

This week’s news heralded London as the ‘third best destination in the world’ to visit after Istanbul and Rome. This confirms what many of us who live here already know: London is a top place to live.  In the first 9 months of 2013, the capital pulled in 12.8 million visitors who spent a total of £3.37 billion, and our government is quite rightly keen to keep the tourists coming.

But there is a darker side to this influx of visitors. London is also home to some of the world’s most corrupt officials and their front men and women. Having stolen vast wealth from their people, they need a place to hide the loot and spend the money. The UK, with its booming property market, top-class private schools and banks who ask few questions, is an obvious draw.

We’ve seen this in the recent regime implosions in the Arab world. When the systematic corruption of a fallen regime is suddenly laid bare, the revelations were swiftly followed by headlines about the expensive private homes, huge bank accounts and glamorous double lives in glamourous Western hotspots. Think of Ben Ali’s family’s luxury yachtsin Spain or Saif al-Islam Gadaffi’s £10 million Hampstead mansion….

mansions.jpegBut shouldn’t this make us stop and think beyond those headlines? Apart from generating easy column inches, outrage after the event achieves little. The real question is, why are we actively making life easier for the corrupt and harder for their citizens in this way? After all, dictators and their cronies  generally make a mockery of their judicial systems while in office, so are unlikely to face justice in their own states. We then compound the impunity by letting them enjoy their foreign boltholes and hide the money they’ve looted in secretive bank accounts.

It doesn’t need to be like this. Instead of rolling out the red carpet to those with fat wallets and terrible governance and human rights records, we could help stem the emergence of future Gadaffis and Yanukovychs by  denying their visas and freezing their assets before their state has been looted so badly that its citizens pour out onto the streets in protest. The US has led by example on this front – its ‘kleptocracy initiative’ proactively denies access to corrupt officials and those who bribe them. Congress also passed the ‘Magnitsky Act’, designed to punish Russian officials responsible for the death of Russian lawyer Sergei Magnitsky in 2009. It allows the US to withhold visas and freeze financial assets of Russian officials thought to have been involved with human rights violations.

The UK has powers to ban such people, but does not routinely say if it’s done so – so it’s hard to know whether or not these powers are being exercised.  This lack of transparency around the process was highlighted in a parliamentary debate last week by Dominic Raab MP, who was calling for those responsible for the death of Magnitsky to be banned from the UK and have their assets frozen. Despite his position as MP, he’s not been able to find out what whether the UK has banned these individuals.

The UK’s powers to get corrupt funds frozen and returned to the countries they came from are also in need of an overhaul. Transparency International UK recently published a report showing a myriad of road-blocks in place to effective asset recovery for grand corruption. In other words, if you’re a kleptocrat with assets in the UK, the risk of those assets being discovered and confiscated is very low. The government is currently reviewing its asset recovery laws, but with a focus on criminal cases, not grand corruption.

These are major blots on an otherwise promising copybook. The UK has recently taken bold and meaningful steps towards becoming a world leader on tackling corruption, most notably by committing to public registries of the real owners of companies. This measure, if properly implemented, could go a long way to stopping dictators, drug lords, terrorists and other criminals hide their activities and move their money by using anonymous companies.  The next step is to make sure we have robust deterrent policies in place and in practice to deny safe haven to those same individuals – including making sure our visa regulations and asset recovery systems are fit for purpose.

Eleanor Nichol leads the Global Witness Governments and Corruption campaign. Follow her on twitter at @ellienichol