Illicit Finance: War in Ukraine

If we are to prevent Russia and other autocratic states, such as China, from proving that aggression pays, there can be no halfway house, no split-the-difference deal, that segments a sovereign state. That would shred what Winston Churchill called the “sinews of peace” in the title of his famous iron curtain speech, which helped to lay the foundations of the global security and stability that we have too readily taken for granted. The democratic powers would gain only short-term respite from further wars of aggression, selling out generations of blood spilt and of patient deterrence, to offer the next generation —well, exactly what? Who can ever forget that “peace in our time” in 1939 turned out to be a false respite?

So this motion is an important message. It is also a signal to our own public about how we are inviting our own voters to regard the Russian aggression. Our news channels and politics are cluttered with trivia, but also with any number of urgent issues that are also existential threats—not least, climate change and the race to net zero. But we need to convey an ugly truth: war, and the threat of war, displaces every other threat by its immediacy. If the globe, by neglect, cascades into the chaos and waste of increasing state-on-state warfare, with all its death and destruction, and economic and trade disruption, the net zero target will be just another casualty. So our democracy, and democracy around the world, must not fail this test.

The question is: how can Ukraine win this war, in the terms set out by the motion? On that, we find that some are more doubtful than others. We have had the strange spectacle of the US President’s reluctance to advance Ukraine’s membership of NATO, for fear that, as President Biden said:

“If the war is going on, then we’re all in war…with Russia”.

That somewhat misses the point. President Putin has himself declared that his war is a war against NATO. The fact is that we are already in the war. Denial of that is denial of the profound and dangerous consequences of this war for our own security. The democratic world cannot afford to stumble in our support for Ukraine. The House heard my right hon. Friend the Prime Minister confirm earlier that the Vilnius summit was one of the most significant in NATO’s history. Ukraine was not immediately offered NATO membership, as we and others might have hoped, but we should understand why. It is problematic to extend the article 5 protection to a nation that is being torn by conflict as we speak.

However, we can be pleased to see the words of the Vilnius communiqué:

“Ukraine’s future is in NATO.”

We can also be grateful for President Biden’s support for those words. Furthermore, the Vilnius summit dispensed with the requirement for the usual membership action plan, and also established a new NATO-Ukraine council, formalising a relationship between Ukraine and NATO. All that and, not least, the continuing active and practical support for Ukraine, reinforces the underlying intention of NATO nations, in principle, that we will accept only one outcome from the war: the complete expulsion of Russian armed forces from Ukrainian territory.

I wonder whether my right hon. Friend the Minister would agree that NATO membership for Ukraine is also essential as soon as the war ends. Will the Government commit to that? There will only be a significant flow of investment into a post-war Ukraine if that investment is underpinned by NATO’s article 5 security guarantee. When the Czech Republic was first offered accession talks for NATO membership in 1997, the flow of private foreign investment into the country doubled within a week.

I wonder whether the Labour Opposition can expand on their position on the commitment to NATO enlargement. Earlier this week, a slightly different motion was planned for today’s Order Paper, but I was persuaded to remove the reference to continuing NATO enlargement, in the interests of cross-party unity. That is what we are pursuing today, so this is a genuinely well-motivated inquiry. Why was it necessary to remove the reference to NATO enlargement?

Today, the Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), supported enlarging it. I am grateful for that late support, but will Labour make clear its support for the text in paragraph 4 of the Vilnius communiqué? That includes the words:

“We reaffirm our commitment to NATO’s Open Door policy and to Article 10 of the Washington Treaty. Every nation has the right to choose its own security arrangements.”

Does Labour stand by the decision made at the Bucharest summit in 2008, reiterated this week in Vilnius, which says that not just Ukraine but Georgia

“will become a member of NATO”?

The House will await the shadow Minister’s response to those questions.

What Ukraine must also have now is more NATO standard weaponry and more training. It still does not have enough and, as its young men die on the battlefields, we should be forgiving of President Zelensky’s constant pleading. I am certain that the Secretary of State for Defence did not want to cause a stir with his slightly unguarded remarks, but they carried an important message that the Ukrainian Government and Ukrainian representatives can be more persuasive of others who are perhaps reluctant to support Ukraine, or reluctant to support it with the necessary weapons and matériel.

The UK has been a trailblazer. The Government should be congratulated on the UK being the first nation to give significant military support to Ukraine, while countries such as the United States and Germany were holding back. We were the first to provide military training and lethal weapons, and the first to commit tanks and long-range missiles. It is in the interests of the whole world that the Ukrainian armed forces get what they need, and as fast as possible. The more they have now, the quicker they can achieve victory. It is a simple equation. The longer the war takes, the more expensive it will be for NATO countries and for the rest of the world in the longer term. It will also be more dangerous, because the longer we take to help Ukraine achieve victory, the bigger problem a belligerent Russia will become.

The UK does all of this not out of some misplaced notion of national vanity about our role in the world, but to defend our own national interest. The UK plays a vital leadership role in the world. The UK has to step up, or the world will become a far more dangerous place for our own citizens, as well as for everybody else. The post-war era of peace and security was founded on deterrence. When deterrence failed and the Russian tanks rolled into Ukraine on 24 February last year, the peace and security of Europe was shattered. It must be restored, or democracy around the world will have failed in its resolve and the dictators will have triumphed.

The motion before the House this afternoon is not just a declaration of support for the policy of His Majesty’s Government on Ukraine; it is a banner under which we must rally our people and the other democracies of the world, in support of the freedom and security of us all.

That takes us to the core of the argument set out in the Foreign Affairs Committee report. The threats that we have to confront now are not simply places on a map, but domains; they are the political, cyber and, crucially, economic worlds. We have to recognise that the way we will be attacked will not simply be by states, but by states acting together with others.

Those proxy forces will be more dangerous, in many ways. Sometimes it will be organisations such as the Islamic Revolutionary Guard Corps, acting in concert with the Government of Iran, but at other times it will be private military companies, such as the Wagner Group. Increasingly, these nexus threats will couple with organised crime groups and together they will exploit our vulnerabilities in the economic crime space, to generate the millions needed to cashflow violence. That is why the Foreign Affairs Committee, under the leadership of the then Chair, the right hon. Member for Tonbridge and Malling (Tom Tugendhat), who is now the Minister for Security, spent so much time over the past couple of years looking at the question of illicit finance.

Russia is at the centre of the debate because we have to learn the simple truth that we have to re-contain Russia. When we look at Russian history, we see one clear lesson: Russia is constantly in the business of invading its neighbours. We have to remember the throttling of Berlin in 1948 and the invasions of Hungary, Czechoslovakia, Afghanistan, Georgia, Moldova and Ukraine. We in this House have to learn the lesson that a mainstay—a cornerstone—of our security policy has to be a strategy for re-containing Russia. We cannot change the geography of Russia, but we can and must end Russia’s ceaseless choreography of war.

With Sweden’s admission to NATO, along with Finland, we have now rebuilt NATO’s eastern flank. That task will not be complete, as the Chair of the Liaison Committee said, until Ukraine, and I hope one day Georgia, join NATO. But we have to recognise that there is an awful lot more that we need to do to close down the domains of politics, cyber and economy.

The Foreign Affairs Committee report focuses on the economic world. Frankly, it is a shame that it took the invasion of Ukraine to prompt the Government to get serious about bringing forward the Economic Crime and Corporate Transparency Bill, which is currently in the other House. At least the Government have made progress. I hope that we can build on what I hope is an emerging consensus in the other place about some of the reforms that will be needed. Together, we have to ensure that we have shut down Londongrad for good. For many years, our country has not simply been a target, but a crime scene. We have been the place where hundreds of billions of roubles, stolen from the Russian people, have been laundered and, in many cases, recycled into Putin’s ceaseless war of violence.

In the Foreign Affairs Committee’s report, we set out four basic sets of reforms needed in the fields of prevention, intelligence, enforcement and prosecution. In the realm of prevention, it is obviously vital that we impose upon directors some much tougher obligations and finally ensure that Companies House becomes a regulator, not a library where accounts are filed to gather dust.

Not many of us will remember this, but when this House decided to create limited liability laws, back in 1851, the Prime Minister of the day, Viscount Palmerston, confronted quite a contentious debate and a divided House. At one point he had to threaten the House with sitting right the way through to the summer in order to get the legislation on the books. Limited liability partnerships are not found in nature; they are the creation of us as legislators and create significant privileges for those who want to come together and form a company. Viscount Palmerston said that it would allow Britain’s army of small savers to combine their small pots together to create great firms of the future

“for the advantage of the community as a whole.”

He told the Commons:

“There is nothing that would more tend to the general advantage of the public.”—[Official Report, 26 July 1855; Vol. 139, c. 1390.]

Yet today many are exploiting the licence to create companies, to create firms, that subvert the common good. We should stop them. That is why our Committee underlined the imperative of building a stronger Companies House and creating stronger obligations on directors, their proxies and their enablers. The Economic Crime and Corporate Transparency Bill does offer some progress, but it could be stronger. Crucially, we need to create a duty on the registrar to verify information, not simply provide a power that enables the registrar to do something. We need to toughen the obligations of corporate criminal liability. In fact, the report cited in the motion says that

“reform of outdated and ineffective corporate criminal liability laws which mean that it is difficult to hold large companies to account for economic crimes”—

should be reformed.

On this front, the Government commissioned a report from the Law Commission some years ago. The options for change have been on the table since the summer of last year. I gently say to Ministers that it is time to move forward on those options.

It is not simply directors who need stronger obligations; enablers do, too. That is why our report advised the Government to study the lessons from, for example, the enablers Bill from the United States Congress and the Countering America’s Adversaries Through Sanctions Act. These contain protections that should be aligned with UK law. The Economic Crime and Corporate Transparency Bill makes it easier for the Law Society to impose penalties on bad lawyers, but far more important are Lord Agnew’s amendments to the Bill, which were passed in the other place. I hope the Minister can confirm that the Government will not resist those amendments when that Bill comes to us in the next week or two. These require nominees to declare who they are working for. That will help us to identify who the persons of significant control are. It introduces an offence for nominees who do not declare themselves. That is a recommendation of the Financial Action Task Force, and the investigations by both the BBC and The Times have underlined just why we need it. They found that Viktor Fedotov, a Russian-born oil executive accused of £143 million-worth of contracting fraud in Russia, owns two properties in the UK via offshore trust structures, administered by the wealth management firm JCC. But owing to the nominee loophole, Mr Fedotov is not named as the beneficial owner of the corporate trustees that hold property in his name. That is the kind of loophole that made Londongrad possible. We should close it and we should close it together.

The other place has also supplied amendments that close exemptions for trusts, which would stop trusts in the Register of Overseas Entities being used as an opaque vehicle for illicit finance. The other place has also introduced amendments creating sanctions for directors failing to prevent money laundering. It has also closed the loophole that allows small and medium-sized enterprises to escape these sorts of obligations. The amendments are sensible. They are supported by both sides of the House. I hope the Minister, when she winds up, will be able to confirm that the Government will not seek to oppose those amendments.

Secondly, our Committee reflected on the kind of intelligence that we will need to track down bad people who finance Putin’s regime. We thought it was therefore essential that the Government now fulfil their commitment to publish their review of the tier 1 golden visa scheme. That has been promised repeatedly and it is time that we saw it on the table here in the House. Crucially, our Committee was unanimous that better protection was needed for journalists under a revised and comprehensive anti-SLAPP set of laws, but also new protections with a whistleblowing Bill. We asked the Foreign, Commonwealth and Development Office to push for a whistleblowing Bill to offer protection for those who speak out or uncover economic crimes. As yet, we have had no plans from the Government to fulfil that recommendation.

The third area, which is possibly the most significant, is the enforcement gap. We know that this is a problem. Organisations such as the Atlantic Council have been so concerned that they have warned that the UK’s effort to tackle kleptocracy is

“in severe danger of being shown as a paper tiger”.

Obviously, the key is to increase funding for law enforcement. The Government have promised £400 million to fund a three-year programme, but economic crime costs this country £350 billion. In 2019, the head of the National Crime Agency said that the budget needed for the NCA was closer to £3 billion. The Royal United Services Institute says that annual investment of at least a quarter of a billion pounds is needed. We could raise that money if only we took on the argument of setting, say, a £100 fee for setting up new companies, which is, of course, the fee level recommended by the Treasury Committee. That is double what His Majesty’s Government are currently proposing. We need stronger proposals from Ministers to plug the gap where our credibility should be.

Finally, enforcement will mean little if we cannot prosecute the criminals once we find them. That is why we welcomed the sanctions that have been passed by His Majesty’s Government, but, like many people in this House—I suspect that the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) will pursue this point—we are also clear on our Committee that assets should be seized, not simply frozen. We know that it will take some international action at the United Nations to change the norms in international law around immunity for organisations such as central banks. It is also important that we move ahead with the prosecution of Russia for aggression, so that it cannot claim in some way that it is a victim under the terms of the European convention. But, again, what most of us in this House want to see is a Bill on that table that shows how we will seize assets, not simply freeze them.

Important measures have been brought forward in the other place, too. The Economic Crime and Corporate Transparency Bill would widely extend cost caps beyond simply unexplained wealth orders. Again, it is extremely important that Ministers accept rather than reject those measures. But, taken together, we have now taken, through the work of many people on both sides of the House, some serious measures that will shut down Londongrad, and that will learn the lessons from the way in which Putin was able to cash-flow his violence through exploiting his friends in the City of London and elsewhere. We must accept that, even when Ukraine is triumphant, the Russian threat will simply transform itself once again. That is why we must ensure that our economic system, which we have worked so hard to create, is disrupted and denied to those who wish us ill.

That has happened here with Russia. Russia made it very clear what it was going to do, right the way from South Ossetia to the invasion of Crimea and the Donbas. These were very clear first steps in telling us that Greater Russia was on the move and was an objective of Putin, not just an idea. On the Minsk agreements, I remember sitting in Cabinet on this. I am not saying I was ahead of anyone else, but I remember saying, “How many of us here are really worried about the fact that there is an agreement now granting the right for Russia to sit on territory that it has invaded and occupied?” Everybody shrugged slightly and said, “Well, there’s not much we can do about it.” That, of course, was the signal to Putin that we were not prepared to stand up. That first phase only established for him the entirety of his project and its feasibility, and then there was the constant supply of weapons and the terrible shooting down of the airliner. Those were all constant steps, telling us the direction and that he was testing us. Every time he tested us, he succeeded: we backed down and did nothing. The result has been this final full invasion—or attempted invasion—of Ukraine.

In that context, I am slightly sorry that NATO was not able to send Ukraine a stronger signal about its future with regards to NATO. I agree with my hon. Friend the Member for Harwich and North Essex in that I applaud much of what the NATO-Ukraine Council did and think it is an excellent start, but I think we could have been more positive. America and Germany particularly stood in the way of the general mood of the council to offer more to Ukraine. I know that we probably could not have brought Ukraine in immediately, but everyone harped on about article 5 being the problem because it committed people to go to war. It does no such thing, by the way; it is always worth reading these things before pronouncing on them. Article 5 does not commit the nations in NATO to go directly to war. It commits them to agree together to take action as they deem “necessary”. Simply put, it is quite important that it is not an absolute: the declaration of a war against one is a war against all is then followed by actions as deemed necessary in nations. That means that, by and large, we will probably come together and do that, but it does not mean that we would have to be at war in Ukraine. We could have offered that relationship, and reading the article tells me that that is the case.

I commend the leadership of my right hon. Friend the Prime Minister in all this, as I commend the UK’s leadership. The beauty is that the Government and Prime Ministers have led the way on the issue in so many ways, as my hon. Friend the Member for Harwich and North Essex mentioned. The good news, of course, is that this House has not been divided on any of it. The House has sent a strong signal that Parliament stands by those in Ukraine and by the Government’s actions in trying to support them. That is very important because it is not always the case; in America, it is not necessarily the case at the moment. This Parliament has stood head and shoulders among most others, and it is because of that that we have been able to lead in terms of equipment, support, and recommendations with regards to NATO. The UK is influential in these matters and long may it remain so.

I return to the question raised by the right hon. Member for Birmingham, Hodge Hill: how do we deal with Ukraine’s aftermath? Right now, there is a debate taking place about frozen assets. We have frozen the private assets of some oligarchs and we have frozen the Russian national Government’s assets here in the UK, in America, in Canada and in various other nations through their markets. It is quite an interesting debate, though. We can certainly seize private assets, although even that has been debated—but it is quite clear that under international law it is wholly feasible for us to do so—but the real debate begins when it comes to very extensive Russian national assets that are now just sitting there. How can we deal with those? It is not the case that doing this immediately opens the door to the Chinese and others to seize our assets should they wish to. There are a number of arguments, which I will quickly run through.

There are a number of routes around the problem of sovereign immunity in relation to claims against Russia for its conduct in the war and an attempt to obtain access to those assets. Customary international law permits the imposition of sanctions and restraint of assets in furtherance of international peace and security and legitimate foreign policy objectives. That means that, if asset-freezing measures are failing to achieve those aims, it would seem—this is important—very permissible in principle for measures of seizure to be adopted as a necessary and proportionate next step. They are not ruled out; they are by a natural extension. We must view international law as a movable process that is not set in stone. It has always been capable to shift international law by what nations agree. This is an important, feasible point. States are obliged under international law to take all necessary and proportionate steps to bring an end to a breach of peremptory norms of international law. That is important, because it sets the tone for why we may look at this carefully.

It was Lord Bingham who said that the public policy consideration that had greatest claim on the loyalty of the law—this is really important—was that where there was a wrong, there should be a remedy. We must always be governed by that in law. That is why I believe it is wholly feasible for us now to start the process by which we may undertake the pathway to the potential seizure or subsequent seizure of Russian assets for reparations.

I will conclude by mentioning, as I did in a previous question to the Prime Minister, that I came back a few days ago from Ukraine. It was a privilege to be there, working with a remarkable charity that I have now supported twice in Ukraine, called Siobhan’s Trust, which—in a classically British kind of way—just set off when Russia invaded Ukraine and went towards the danger. The people from that charity have been feeding those dispossessed of their properties and fleeing the war. They moved into Ukraine and have now moved down near the frontline, and they feed people there from pizza trucks. They have made over 1 million pizzas for people in Ukraine, and they produce joy and hope in people’s hearts when they are there, as they wear what they call Ukrainian kilts and they put the boombox on. People’s faces really lift when they see this peculiarly quixotic British crowd—who seem impervious to the idea that they are within the range of shell shot—having fun; it lifts their spirits and brings them great hope.

The thing I discovered while I was out there, and the one thing I know from having served, is that war is terrible. War is horrendous. War hurts those who are not directly involved in it—more, perhaps, than those who are. It is a terrible, terrible affair, to be avoided at almost all costs, except when justice must prevail. However, talking to the military and to some of the guys I saw down there near the front about their problems and issues, I must say to the right hon. Member for Birmingham, Hodge Hill that we still have so much more to do.

Ukraine is the frontline of NATO. There is no beating about the bush: if Ukraine fails on this, we all fail, and the repercussions, as the right hon. Gentleman said, will be terrible. Ukraine’s war is already our war, whether we give it membership of NATO or not. It is our war. We started that when, much to Putin’s shock, we stood by what we said we would do.

The war in Ukraine has exposed our own failure to understand what war fighting really means. The truth is that almost all of us in NATO have abandoned the idea of the sheer extent of a full-scale war. When I talked to the Ukrainian soldiers, the amount of ammunition they told me they use on a daily basis is astonishing. We have forgotten that, so we do not have stockpiles appropriate to fighting war, and we have to replenish those in double-quick time, because they need that ammunition. They are running short of artillery ammunition, not because we do not want to give it to them, but because so many of us do not have enough artillery ammunition to give them right now, having placed contracts only recently. America, by and large, has many more stockpiles than we do, but it is a fact of life that if we wish to avoid war, we must prepare for it, and we simply have not prepared for it over the years to the extent we needed to.

The Ukrainians need that support. They need training; many of their soldiers get two or three weeks’ training and then they are on the frontline. I swear to God, having been a soldier myself, that it takes a long time to understand proper fieldcraft, and the less someone knows, the more likely they are to be wounded or killed, because they will take the wrong decisions. I will not say exactly what is required, but I must talk to the Government about what they could do. Ukraine also faces conscription issues.

The reality is that Ukraine must win this war, but it needs us to be literally, as Roosevelt once said, the “arsenal of democracy”. It is for us who are not on the frontline to supply those who are, so that they may achieve their goal of victory. With victory comes the second phase of reparations and restoration. We must be in that right to the finish, for if Ukraine fails first in the war, or fails subsequently in the peace, we will carry the blame for it, and rightly so. We will never be forgiven. I simply say to my right hon. Friend at the Dispatch Box, “This is our war. We must win it with them, or else we will all lose.”

“The intermittently released figures on blocked assets may seem impressive but likely represent a small fraction of all Russian dirty money hidden across the world… Governments need to be honest about the challenges they face in tracing and seizing the assets. They also need to explain what’s preventing them from pursuing further accountability measures—including confiscation—in relation to potentially illicit assets. This can help us better understand what reforms are needed.”

Economic crime has been an afterthought for far too long. The National Crime Agency budget has declined in real terms by 4.5% over the past five years. Approximately 225,000 people work in policing in England and Wales, covering London, right at the centre of this mess, but just 1,700 of them—less than 1%—work on all types of economic crime. The UK Government could follow the lead of the Dutch Parliament and set up a trust fund based on seized money from Russia and Russian oligarchs to fund the Prime Minister’s proposed Marshall plan to help rebuild Ukraine.

In the Republic of Ireland, property is frozen and subsequently forfeited if it appears to the court that a person is in possession or control of property that constitutes, directly or indirectly, proceeds of crime. The success of the Irish system stems partly from the resources provided to its Criminal Assets Bureau—something the UK has not traditionally been willing to do. The war in Ukraine has shown us that we need to close the loopholes, and we need to close them now.

I extend my thanks to the charity that the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) mentioned. We all have examples of people who have come forward in the past couple of years and shown amazing compassion and strength. I know so many families in Hornsey and Wood Green who have opened their doors and had families stay, even beyond the six months. Even though the scheme was not perfect—we all knew that—it was fantastic to see our citizens come forward to help.

To move on to the substance of the FAC’s report, it is clear that if the Government had introduced the necessary legislation in time, they could have stemmed the flow of illicit finance prior to Russia’s full-scale invasion of Ukraine. However, kleptocrats and oligarchs have been emboldened, believing fundamentally that their vast wealth will be safe in London and that their assets will flourish. To go further on that thought, perhaps we could do more on the question of property and China, rather than waiting until tensions develop in that particular relationship.

The Labour party has been pressing the Government for action for years, and has raised the issue of illicit finance several times on the Floor of the House. In January, the shadow Foreign Secretary, my right hon. Friend the Member for Tottenham (Mr Lammy), made it clear that when we are in Government we will answer calls from the US and beyond to establish a transatlantic anti-corruption council to co-ordinate the international fight against corruption, money laundering and illicit finance. In a speech just this week at the Bingham Centre, my right hon. Friend announced that Labour would join calls for the establishment of an international anti-corruption court designed to prosecute the most egregious acts of corruption across the globe.

The FAC report illustrates that the measures adopted in the Economic Crime (Transparency and Enforcement) Act 2022 did not go far enough to tackle to the problem. It states that the steps taken by the Government since February last year

“are not preventative but rather constitute damage limitation”—

damage brought about by years of apathy on the issue. The new Economic Crime and Corporate Transparency Bill finally acts on some, but not all, of the promises in the Government’s 2019 economic crime plan. Indeed, the six-month delay between the two pieces of legislation has allowed thousands more illicit companies to register.

We welcome the Bill, but it must go much further to ensure not just that we keep up, but that when it comes to cracking down on illicit finance, Britain holds the gold standard. It was therefore profoundly disappointing that in Committee back in January there was little in the way of movement from the Government, even when they struggled to find fault with our amendments and new clauses. Every single effort by Opposition parties to strengthen the Bill was met by resistance from Ministers, and every Opposition amendment that was pressed to a vote was defeated. As a result, Committee stage amounted to little more than a litany of missed opportunities, forcing us to return to those arguments once again in this debate, as we will no doubt have to do again during the Bill’s remaining stages.

Although we welcome the fact that the Government have finally U-turned on introducing a corporate criminal liability offence, the Bill’s provisions on Companies House and the supervision of third-party enablers, especially trusted company service providers, are too weak and do not match international standards. The Bill also fails to set out a strategy to recoup assets seized through economic crime enforcement and to compensate the victims. The right hon. Member for Chingford and Woodford Green mentioned righting a wrong—finding a remedy.

Indeed, although we also welcome the steps taken in the Bill on cryptocurrencies, what consideration is being given to sanctioning cryptocurrency mixers Tornado Cash and Blender? [Interruption.] It is not a cocktail! The US Treasury has sanctioned both; why have we not? Will the Government bring the UK into line with the US Treasury’s approach? Putin and his cronies are more than capable of exploiting such gaps in our regime, so why are we so slow and allowing that to persist? That example is illustrative of the Government’s strategy when it comes to tackling Russia here at home. The report outlines that well:

“Although Ministers have spoken eloquently in the House about the need to clamp down on kleptocrats, rhetoric has not been matched by constructive action. Meanwhile, corrupt money has continued to flow into the UK.”

More broadly, even the limited progress that the legislation offers is hampered by the fact that the Government are not sufficiently resourcing the bodies tasked with enforcing the changes. The hon. Member for Inverclyde (Ronnie Cowan) went into the question of resource in detail, so I will not repeat that point, but the report finds that 0.042% of GDP is spent on funding national-level economic crime and enforcement bodies. As a result, money laundering prosecutions have dropped by 35% in the past five years.

Labour will continue to push the Government on the full seizure and repurposing of Russian state assets. There has been little or no movement from the Government on that issue in more than 500 days, despite our Opposition day motion of three weeks ago setting out the means to do so, and despite the fact that our allies are finding the courage to forge ahead. We must keep up. When can we expect the Government to introduce legislation that would allow the repurposing of Russian state assets? The Canadians have already done it; when will the UK Government catch up?

That issue is coupled with the challenge of closing loopholes in our regime that still allow the prohibitions established in secondary legislation to be circumvented. I understand that the Minister will write to the shadow Minister, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), after he raised at a statutory instrument Committee on Monday the question of the continued flow of Russian oil.

Fundamentally, the FAC report catalogues a litany of errors and shortfalls, and illustrates the extent of the Government’s sluggishness in bringing forward legislation fit to tackle the challenges that it outlines. We support the steps taken in the Economic Crime Act and the Economic Crime and Corporate Transparency Bill, which has been in the other place, but changes in the law must be accompanied by a decisive shift in culture on tackling illicit finance, on Government proactiveness, and on authorities having the means, resources and focus to tackle the issues at their core.

I thank all colleagues for their contributions, and particularly the Foreign Affairs Committee for its forensic and fair appraisal of the UK’s performance in this area. Positive steps have been taken, and we welcome them. We have made it clear that we will support the Government where we believe they are getting it right, but progress cannot now beget apathy and complacency. There is a long way to go to expunge dirty money from this country entirely. We owe it to the people of Ukraine to tear such finances from our institutions root and stem.

I hope that the Minister has heard the views of colleagues and will provide assurances that the Government will not take their foot of the pedal when our priority must be to build on the progress that has been made.

Our humanitarian assistance, delivered through the Government of Ukraine, the UN, non-governmental organisations and the International Committee of the Red Cross, is saving lives and helping to protect the most vulnerable, including women and children, the elderly and those with disabilities. The UK has committed £347 million of humanitarian assistance since February 2022, and we have helped to reach over 15.8 million people in need during this crisis. Our economic support includes over £1.7 billion in fiscal support to Ukraine, including approximately £1.65 billion in guarantees for World Bank and European Bank for Reconstruction and Development lending and £74 million in direct budgetary assistance.

The international community is united in supporting Ukraine, and our diplomatic response has been broad and comprehensive. We continue to work to strengthen NATO. It is in everyone’s interest for Sweden to join; its accession makes us all safer. Ukraine’s future place is in NATO, and it has already taken steps toward membership.

Reacting quickly to the invasion of Ukraine, we enacted the Economic Crime (Transparency and Enforcement) Act 2022, sanctioning over 1,600 individuals and entities and freezing £18 billion of Russian assets. We will continue to bear down on kleptocrats, criminals and terrorists who abuse our open economy through our new Economic Crime and Corporate Transparency Bill, and we will ensure that dirty money has nowhere to hide at home or overseas.