Government should tap private sector expertise to tackle kleptocracy, experts urge

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Experts have urged the government to tap into the expertise of the private sector to tackle kleptocracy, as current legislation and investigative practices are “not fit for purpose”.

Better intelligence and better law enforcement – ​​as opposed to the current “weak tools” – are needed to tackle embezzlement by those linked to rogue schemes, they say.

Researchers have urged the government to publicly declare that kleptocracy is a threat to the rule of law and international security. They called on all public institutions to make transparency a priority and to better protect researchers and those investigating kleptocracy from legal threats made by kleptocrats.

The written evidence was submitted to the Foreign Affairs Committee by Professor John Heathershaw, of the University of Exeter; Thomas Mayne, of the University of Exeter and Chatham House; Dr Tena Prelec, University of Oxford and University of Exeter; Professor Ricardo Soares de Oliveira of Oxford University; Professor Alex Cooley of Barnard College and Columbia University and Casey Michel, journalist and author of American Kleptocracy.

The recommendations are drawn from research conducted as part of the FCDO-funded Global Integrity Anti-Corruption Evidence program. Researchers have so far recorded £2billion of UK property linked to kleptocracies as part of their work.

Professor Heathershaw said: “To fight kleptocracy, we need an intergovernmental approach, domestic policy changes with the aim of more effective foreign and security policy, as well as defense of the state. of law in the UK. We need a revolution in the thinking of the foreign policy establishment.

“The UK lacks and badly needs a strategy to counter kleptocracy. This is a problem that has been brewing for at least two decades. By providing a pathway to the global economy for Russia and Kazakhstan, the UK has helped fuel both hubris over Ukraine’s invasion and resentment over Kazakhstan’s crisis. The problem of kleptocracy in the UK is not just an issue of the rule of law, but of international security.

Researchers say the UK initially trailed the US, EU and Switzerland in individual sanctions applied after the invasion of Ukraine because the Department of Foreign Affairs’ FCDO sanctions unit Foreign Affairs lacked capacity and that the government “just didn’t know where a lot of those assets were.” . The follow-on amendment to remove the “suitability test” from the Economic Crimes Bill would not have been necessary if the government had the ability to analyze kleptocracy.

Experts say the proposed joint US-UK task force on tackling kleptocracy is desperately needed to “boost the UK’s own anti-kleptocracy strategy”. They demand that the Tier 1 Investor Visa Scandal report be released, and then that the Conservative Party pledge to forgo all donations from individuals identified as being at high risk of corruption or a threat to national security.

Dr Mayne said: “There is a danger that UWOs, even in revised form, will only have an impact in the clearest anti-corruption cases, where the state official has no possibility of meeting the requirements of the order, probably because they are no longer part of the political elite of their country of origin. Unless there is some new reform or legal precedent to establish that the wealth accumulated through such political means is in fact not “lawfully obtained”, then the UWOs will remain a weak tool against kleptocracy.

Scholars have called for regime membership, family ties to a kleptocratic regime, or business relationship with regime membership to be used as the civil standard of proof of illegal sources of wealth.

The report calls for increased funding and mandate for UK law enforcement agencies so they can properly investigate and freeze assets obtained through corruption. It also recommends sweeping reform or replacement of the SAR system to require private sector professionals in regulated sectors to submit less but more detailed cases of suspected elites, corporations and their associates of kleptocracies – not just PEPs – to the NCA’s Financial Intelligence Unit (FIU) and/or other means of enforcement. Commercial or legal confidentiality requirements should not prevent such disclosure where money laundering is suspected.

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