Accountants, lawyers and PR executives will be offered £250,000 to blow the whistle on corrupt Russian oligarchs under Labour plans.
In his speech at the Labour Party conference in Liverpool on Monday, David Lammy will unveil a new reward scheme aimed at tracking down assets linked to illicit finance.
The shadow foreign secretary has made shutting down the “London laundromat” of corrupt foreign money channelled through the UK one of his main priorities if Labour wins the next election.
According to a report by the Commons Foreign Affairs Committee in 2022, London is a “hub for illicit finance”, with assets laundered through the UK helping to finance Vladimir Putin’s war in Ukraine.
The committee also found that “enablers” of illicit finance such as lawyers, bankers, PR managers and estate agents are helping the corrupt to conceal their wealth in Britain.
In his speech, Mr Lammy will argue that dirty money laundered through the UK helps to prop up autocratic regimes and fuels crime on British streets.
‘Fight against kleptocracy’
While 1,627 Russian individuals and 238 entities are now subject to UK sanctions against Russia, Labour points out that so far there have been no enforcement measures taken against individuals or companies since the invasion of Ukraine.
To “turn up the fight against kleptocracy”, Mr Lammy will announce a reward scheme for whistleblowers.
Individuals coming forward with information that leads to the discovery of assets belonging to sanctioned individuals or entities held in the UK, or who expose sanctions breaches, would be eligible to receive rewards of up to 25 per cent of the Office of Financial Sanctions Implementation’s (OFSI’s) fines.
OFSI fines can reach £1 million, meaning whistleblowers could receive up to £250,000.
Labour said the policy would be cost-neutral because rewards would only be eligible if the information leads to a sanctions fine.
In his speech, Mr Lammy is expected to say: “When I visited Kyiv, anti-corruption campaigners told me Britain must stop Putin’s cronies from laundering their dirty money in our capital.
“Dirty cash which fuels violent crime on our streets and turns London homes into the bitcoins of kleptocrats.
“Labour will answer their call and turn up the fight against kleptocracy. That’s why today I’m announcing a new whistle-blower scheme to reward those who expose illicit assets and sanctions breaches and help to recover misappropriated funds.
“Under the Tories, Britain became the money-laundering capital of the world. With Labour, Britain will be the anti-corruption capital of the world.”
Mirrors US schemes
The policy mirrors existing schemes in the US relating to sanctions, money-laundering and other corrupt practices. In 2022, $37.8 million (£31 million) was paid by the US Internal Revenue Service to 132 whistle-blowers.
HMRC already has a system of financial incentives for identification of tax evasion, which paid out more than £500,000 last year, but it has no equivalent scheme in relation to sanctions.
Labour has already backed calls for the establishment of an international anti-corruption court and has committed to hosting a global summit on tackling corruption in London within one year of getting into office.
In his speech, Mr Lammy will reaffirm Labour’s support for Ukraine’s fight against Russia and its eventual Nato membership.
He is expected to say: “Foreign policy must always start with security.
“We meet as the dark clouds of Putin’s war are raining bombs down on Ukrainian cities for the second year.
“Our message to the Ukrainians with us today is this: if Labour wins the next election, Britain’s support for you will not waver.
“We will support you to victory and when you win we will support you on your rightful path to join Nato.”