MPs have today accused “morally bankrupt” billionaires of using the UK as a “laundromat” for illicit finance despite a slew of fresh sanctions.

In a new report: “The Cost of Complacency: illicit finance and the war in Ukraine”, the foreign affairs committee urges  the government to act now, while sanctions against Russia are in place, to tackle the flow of illicit finance through London.  

The committee finds that the government’s rhetoric of “clamping down” has not been matched with constructive action.

The report concludes that the government’s lack of willingness to bring forward legislation stemming the flow of Russian money has directly contributed to the UK’s status as a safe haven for corrupt wealth. It is “shameful that it has taken a war to galvanise the government into action”.

Sanctions against oligarchs and those who support, or receive benefit from, the Russian government are not in and of themselves enough, argues the committee. Their report calls for consideration of whether prosecutions can be brought and whether criminal cases can be built. The report finds that legislation targeting enablers should be strengthened.

The report concludes that without the necessary means and resources enforcement agencies are toothless, and urges a substantial increase in funding and expert resourcing for the National Crime Agency, Serious Fraud Office and other responsible agencies.

The committee calls on the government to publish its long-awaited review of the Tier 1 Investor visa scheme. The government should also explain what action will be taken in relation to those who were granted a visa without due diligence, particularly those who now hold permanent residency or British citizenship, and what action it has taken against those it has deemed to be a national security risk.

The report is an interim one, and the committee’s inquiry into illicit and emerging finance is ongoing.

Tom Tugendhat MP, chair of the foreign affairs committee, said today: “New laws are only half the battle. Enforcement agencies need funding, resources and highly-specialised staff in order to do their job effectively. It isn’t just our financial legislation that needs a rewrite. Tier 1 Visas were golden tickets for wealthy investors, who were able to purchase access to the UK. The government must do its due diligence to investigate all individuals applying for visas, no matter the size of their bank account.

“Allowing illicit finance to fester has wide-ranging ramifications, corroding trust in our institutions and undermining national security. The UK’s status as a safe haven for dirty money is a stain on our reputation. The government must bring legislation in line with the morals of the British people and close the loopholes that allow for such rife exploitation.”

A government spokesperson told Politics.co.uk in light of the report: “There is no place for dirty money in the UK, not least that linked to Russia. We have taken robust action to crack down on illicit finance including by toughening up enforcement action and transparency requirements in order to target corrupt elites, and earlier this year we set out our plans to go further than ever in bearing down on anyone who seeks to abuse our financial system.

“We are one of the most active countries in financial sanctions enforcement in the world and our experts are on constant alert to combat the threat.

“In lockstep with our allies, the UK has been tightening the ratchet with ever stronger sanctions against Russia since day one of Putin’s war. We have kept up the largest and most severe economic sanctions that Russia has ever faced, and have tripled the size of the FCDO’s sanctions team to enable that”.