May’s new laws to target “illicit enrichment” of public officials

Home secretary Theresa May has today announced proposals for new laws that would target MPs, councillors and civil servants suspected of corruption.

Part of a wider shake-up of measures to tackle money laundering, the proposed new rules would establish a new offence of “illicit enrichment” for cases where a public official’s assets have increased significantly without satisfactory explanation, the Home Office said.

Stressing that the move was not a “knee-jerk” reaction to the Panama Papers, Mrs May said the economy was “at risk of being undermined” by money laundering, illicit finance and the funding of terrorism, and that officials should face the prospect of having their property and cash seized should they fail to disclose their wealth and its source to authorities.

Her new proposals - subject to a six-week consultation period being launched in the Commons - plan to give the civil courts powers to impose new “unexplained wealth orders”.

They would force suspected money launderers to declare their wealth under threat of having their assets arrested.

The government described the plans as “aggressive” and “the most significant change to the UK’s anti-money laundering and terrorist finance regime in over a decade”.

Mrs May said: “The laundering of proceeds of crime through UK institutions is not only a financial crime, it fuels political instability around the world, supports terrorists and extremism and poses a direct and immediate threat to our domestic security and our overseas interests.

“We will forge a new partnership with industry to improve suspicious activity reporting, deliver deeper information-sharing and take joint action on enforcement.

“And we will act vigorously against the criminals and terrorists responsible, to protect the security and prosperity of our citizens, and safeguard the integrity of Britain’s financial economy.”

Under the reforms a new administrative power to designate an entity as being “of money laundering concern” is also being considered.

This would require those in the “regulated” sector - such as banks, legal and accountancy firms - to take “special measures” when dealing with them.

In October last year an official national risk assessment said that taken as a whole, money laundering “represents a significant threat to the UK’s national security”.

Robert Barrington, executive director of anti-corruption body Transparency International UK, said: “There are some excellent ideas here, but the proof of the pudding will be in whether they are put into action.

“The powers that are envisaged could make a real difference and, while it is important they are properly debated in Parliament to allay any concerns over civil liberties, it is equally important that they are not watered down by self-interested lobbying during the consultation process.”