Overseas Territories: Tax Transparency

Alex Sobel Excerpts

Wednesday 5th February 2025 Westminster Hall

[Joe Powell (Kensington and Bayswater) (Lab)]

I beg to move,

That this House has considered tax transparency in the Overseas Territories.

It is a pleasure to serve under your chairship, Mr Turner. Having worked on anti-corruption, open government and transparency issues for more than a decade, I am often asked why such issues matter when there are so many pressing challenges facing our country. It can often seem an intractable problem—billions and trillions flowing through the international financial system that will end up elsewhere. What difference does it make to our constituents? I hope this debate will show directly why it matters to our Treasury and our tax take; to the housing crisis; to the fight against organised crime; to the enforcement of our sanctions against Putin; to fighting poverty around the world; and to restoring trust, transparency and accountability to our democracy.

This Government have made a strong start on combating illicit finance and kleptocracy. I particularly welcome the Foreign Secretary’s personal campaign on this issue, which has seen an expansion of our sanctions, the appointment of Baroness Hodge as the UK’s anti-corruption champion, and a cross-departmental team of Ministers charged with developing a new anti-corruption strategy, to which I know my hon. Friend the Exchequer Secretary to the Treasury has a strong commitment.

The Foreign Secretary’s ambition to transform Britian from the dirty-money capital to the anti-corruption capital of the world is absolutely the right objective. It matters for our international reputation and our standing in the world. To be taken seriously as a leader on democracy and anti-corruption, our own house has to be in order. The uncomfortable truth is that while some of the most notorious and brazen enablers of illicit finance and money laundering are operating as part of the UK family, we will not be able to claim that leadership role. Despite years of warm words and communiqués about fighting economic crime, the overseas territories are still one of the premier global destinations for moving dirty money, and it is time for that to change.

Since the full-scale invasion of Ukraine in 2022, I have led the local Kensington Against Dirty Money campaign in my constituency of Kensington and Bayswater, where more than 6,000 properties are owned overseas. Our most popular activity is a local kleptocracy tour of often empty mansions owned by autocrats and their supporters from around the world. Transparency International found that £5.9 billion in suspicious funds had been used to purchase UK properties through shell companies registered in the overseas territories, with £1.1 billion of that in my constituency. The ownership vehicle of choice is an anonymous trust, with the most popular location being the British Virgin Islands. The BVI has a population of less than a quarter of my constituency, so it would be highly surprising if BVI residents were the beneficial owners of the properties.

Thanks to investigative journalists and a series of high-profile leaks from the Panama and Paradise papers to “Cyprus Confidential”, we know who the actual owners are. That is why the previous Government—with thanks to the right hon. Member for Sutton Coldfield (Mr Mitchell)—took action in the previous Parliament with cross-party support to implement a register of overseas entities. That gives us good and helpful information, but a glaring loophole remains. Trust-owned property does not need to be declared—and in the Royal Borough of Kensington and Chelsea that accounts for 40% of the foreign-owned property. That allows the UK property market to continue as a laundromat for illicit finance. I ask the Government to look at closing this loophole and adding trusts to the property register as soon as possible.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

Does my hon. Friend agree that without those actions there is a real danger that significant sums of Russian assets and money, which could be sanctioned and used to reconstruct Ukraine, will be left in the hands of the supporters and perpetrators of the war in Ukraine?

[Joe Powell]

I completely agree. Without transparency, we cannot follow the money. We have some prominent examples of properties owned by sanctioned oligarchs that came into the sanctions regime only after investigations uncovered those assets. Keeping the anonymous trust option available, without the requirement to declare the true owners, allows for exactly the sort of behaviour that my hon. Friend outlines.

The main opposition is from some highly self-interested trust lawyers, so I urge the Government to take on those claims and bring trust-owned property into the register, which would help us not only to fight economic crime but to revitalise our high streets, where buildings often sit empty because enforcement action cannot be taken when the true owners cannot be tracked down. Indeed, some of my constituents were evicted using a spurious section 21 notice by an anonymous landlord who was based overseas in a tax haven.

My local walking tour, as part of the Kensington Against Dirty Money campaign, ends outside Roman Abramovich’s frozen mansion, which he purchased for £120 million, on Kensington Palace Gardens. In the past week or so, Abramovich has again been in the news, this time for allegations that he owes approximately £1 billion in UK taxes. At the heart of this story are, again, the UK overseas territories. Abramovich and his advisers used a complex web of corporate structures, via Cyprus and the BVI, to use money from the sale of Sibneft back to the Russian Government at huge profit in 2005. They set up approximately 200 hedge funds and maintained that the operations were happening in the BVI, but it has now been uncovered that the real activity was continuing in London—indeed, in Stamford Bridge itself.

This is potentially the biggest tax case since Bernie Ecclestone, and it is vital that His Majesty’s Revenue and Customs has the resources it needs to investigate. Enforcement of the rules and regulations is critical to recovering as much money as possible for the Exchequer and supporting the Minister’s efforts to improve the public finances. It is also time to upgrade our anti-money laundering supervision regime for professional bodies such as accountancy and legal firms, so that dirty money does not flow through the City. The previous Government opened a consultation, but it has not been responded to.

This is urgent, because Abramovich’s is not an isolated case. For years, the BVI has been the global destination of choice for those seeking maximum secrecy for their money. It featured prominently in the Panama papers, in which half of the exposed entities were linked to the BVI. That is why Parliament has clearly stated its will that public registries of beneficial ownership should be implemented across the overseas territories and Crown dependencies.

At the first Joint Ministerial Council of this new Government, in November last year, the BVI, alongside other overseas territories, promised reforms to ensure maximum transparency, and the Government reiterated their commitment to full public access in due course. I absolutely support the Government in this mission, which is why it was so deeply disappointing to see the BVI’s proposals around company registries, which were published last month. Access would be severely restricted. One provision would even allow company owners to be notified not only that someone is attempting to uncover their identity, but of who is making the request and why, putting investigative journalists and anti-corruption activists at risk of legal or physical intimidation. Worse still, that warning system could tip off criminals and give them a head start, allowing them to move illicit assets before enforcement agencies can act. Such measures do not protect business or privacy; they protect kleptocrats and criminals.

We know it can be done: Gibraltar has shown us what can be achieved. It introduced a public register that is similar to the one that the UK has had for several years. If Gibraltar can do it and we can do it, so can the BVI, the Cayman Islands, Bermuda and all the overseas territories. We must not let our Crown dependencies off the hook, either.

Many overseas territories have cited the privacy concerns outlined in the European Court of Justice rulings, but I encourage them all to review the sixth anti-money laundering directive, which would ensure that journalists, civil society, law enforcement and businesses with anti-money laundering duties all have access to the register anonymously and in full. I continue to believe that public registers are the best solution for the overseas territories and Crown dependencies, but minimum progress would be to meet that European regulatory standard.

It is clear from all the evidence—I expect we will hear much more today—that we need to do far more collectively to support the overseas territories to make progress on economic crime. The path forward is challenging, but I know the Government are seized of its importance. The overseas territories must meet the June deadline to make progress towards public registers. There must be no further delays. Trust-owned property should be included in the register of overseas entities. AML supervision should be strengthened to halt the enablers of dirty money. HMRC, the National Crime Agency and other enforcement agencies must proactively make cases and have the skills and resources they need.

To galvanise our international partners, the Foreign Secretary’s proposal for a summit of financial centres here in London would create a focal point for aligning rules and policies. I hope this debate will galvanise support across the House for the vital mission of tackling corruption and economic crime.

UK-Ukraine 100-year Partnership

Alex Sobel Excerpts

Monday 20th January 2025 Commons Chamber

[Mr Lammy]

I am grateful to the right hon. Lady for her words, which underline the bipartisan support in this House. It was very useful for me to be in Washington DC with the Defence Secretary last May, when we underlined to colleagues across Capitol Hill that here in the United Kingdom this remains a bipartisan issue. It is a great indication of what we can achieve in this Parliament on matters of the greatest concern.

On the right hon. Lady’s last point, she will understand that today is inauguration day and it would have been a bit pre-emptive to have had discussions with the incoming Administration on the security guarantees and on Ukraine’s path to NATO. She knows that we set out an irreversible pathway to membership at the NATO conference when we came into office, and that remains the position. She also asked me about the security pillar, and that is important. Helping Ukraine to reach NATO’s standards, particularly across its military structures, to support Ukraine’s irreversible path to NATO membership, is something that we in this country take very seriously.

Ukraine has defended itself resolutely in cyber-space in the face of Russian aggression, and the UK has been proud to support that defence, both in Ukraine and also in the next-door country. The right hon. Lady mentioned cyber. I was in Moldova seeing the work that we fund, which began before we came into power. It is good, hugely important work, and when we see the interference across the region in Romania and Georgia, the importance of this work is underlined even further.

The right hon. Lady rightly talked about the maritime context and strengthening our maritime capabilities. Working with Ukraine to protect Black sea security is essential to its future security and prosperity. Some 49% of Ukraine’s pre-war trade went through the Black sea, and I might say that that is why, for a substantial period of history, Russia has wanted total control of much of the Black sea. Through the agreement, we will work together to ensure the safety of trade in the Black and Azov seas through joint naval tasking and de-mining activity, which will be hugely important once this war comes to an end.

More broadly, it is important for me to be absolutely clear on the issue of third-party support. I raised concerns with my Chinese counterpart when I was in China on 18 October about the supply of equipment to Russia and the Democratic People’s Republic of Korea’s relationship with Russia. The right hon. Lady knows that I went on to designate companies that we saw dealing with that dual-use technology. The direct participation of DPRK troops in combat operations is another dangerous expansion of Putin’s illegal war against Ukraine and further proof that he has no interest in peace. We have also imposed sanctions on a number of Iranian individuals, on 10 September and again on 18 November, including Iran Air, in response to Iran’s transfer of ballistic missiles to Russia.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I want once again to thank the Foreign Secretary, the Defence Secretary and the Prime Minister for willing this partnership into life. As chair of the all-party parliamentary group on Ukraine, I fully support all nine pillars of the agreement, as I am sure all members of the all-party group do. Pillar 4 deals with the economy and trade, and there are many things we can do now to deepen and strengthen our trade relations with Ukraine, one of which involves joint ventures. What work will be done to remove insurance barriers and trade barriers, for instance, to give access to kindred or joint venture partnerships between UK and Ukrainian companies in all areas, including defence?

[Mr Lammy]

I am grateful to my hon. Friend for all his work on the all-party group. He will be pleased that there are active conversations on this very issue at this time. He will know, too, that because of some of the changes that my right hon. Friend the Defence Secretary has made on procurement, we are doing all we can to assist trade in Ukraine, as complicated as that is at this moment.

Frozen Russian Assets: Ukraine

Alex Sobel Excerpts

Monday 6th January 2025 Commons Chamber

[Mike Martin]

I thank the Chair of the Defence Committee, on which I have the honour of serving. He is of course right, and that is why we have come here today. As I make progress with my speech, I will set out some of the arguments.

“Never again” leaves us with a moral question: how do we answer the genocidal abduction of children on European soil? It also leaves us with a strategic question, to which I will now turn.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I thank the hon. Gentleman for securing the debate, and for the wonderful way that he has started his speech. It is important to recognise that the abduction of children from Ukraine—from Crimea and the Donbas—did not start in 2022; it started in 2014. It has been going on for 11 years. The figures that he gives are broadly correct, I think, from meetings that I have had with Crimea Platform and others in Ukraine, but the second world war, to which he alluded, lasted only six years. The camps existed for only three years, and we are 11 years into this child abduction. International humanitarian law effectively started with Nuremburg. Does he agree that we will need to take a much longer and deeper look at resetting international law, post the Ukraine war?

[Mike Martin]

I agree. This is a war crime of stupendous scale, breadth and width. There is a question of not only justice, but getting those children back to their families in Ukraine. That is part of the work that we all must do once the war is over, with Russia defeated and Ukraine victorious.

Syria

Alex Sobel Excerpts

Monday 9th December 2024 Commons Chamber

[Mr Lammy]

There have been a number of propositions in the last few days, all of which merit further scrutiny and understanding. I am not going to back any single suggestion on behalf of the UK—I think it is important that those suggestions should come from organisations on the ground, and that we continue to work with regional partners. I stand by what I said before at the Dispatch Box: long gone are the days in which a plan is drawn up in the UK Foreign Office and presented as if it is the plan. That cannot be the way; we have to work with the grain of Syrian society, as complex and diverse as my hon. Friend rightly suggests it is.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

Like Minister Falconer, I was at the Doha forum this weekend, and there was palpable relief among the vast majority of delegates that the brutal murderer Assad had finally fallen. However, Sergey Lavrov also attended the Doha forum, and although I boycotted his session, the readout was that he was deeply uncomfortable in answering questions about Syria—rightly so, as he has so much Syrian blood on his hands, alongside his boss Vladimir Putin. Does my right hon. Friend the Foreign Secretary agree that it is unacceptable for Russia to retain its two military bases in Syria, and that those bases must be closed down for the stability of the region?

[Mr Lammy]

My hon. Friend makes a very strong point about Russian capability and desire. The two bases that exist also run operations into Africa and support militia groups on the African continent, and Russia’s long-standing, cynical desire to have a deep sea port in the region is what sat behind Putin’s support for Assad in the first place. We see Vladimir Putin in this Parliament.

Ukraine

Alex Sobel Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Catherine West]

The right hon. Gentleman makes an important point about the psychology of this conflict. It is why it is so important, particularly in these desperate winter months, that we remain firm. I commend him and others for all their work on the all-party parliamentary group on Ukraine, and all their work on security and intelligence, to provide that important, dedicated cross-party support to Ukraine. In the end, we know that it is for Ukraine to determine its position on its future, its just peace and its vision for its own people, but we will be behind the Ukrainians so that they know we can be relied on.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I was heartened to hear the Minister say that we would support the self-defence of Ukraine for as long as it takes. One of the most important aspects of that is the development of new military technology, particularly through joint ventures between the UK and Ukraine on areas such as drones and unmanned aerial vehicles. One such example is the Black Arrow project. The first stage of that project has been completed and the drones have been manufactured, but they have been stuck here since May this year, because no export control licence has been granted. Will the Minister implore her colleagues in the Department for Business and Trade to facilitate those licences quickly, as those drones will help not just the defence of Ukraine, but our sovereign manufacturing capability for defence?

[Catherine West]

I commend the chair of the all-party parliamentary group on Ukraine not just for his very long train trips across Ukraine to visit and offer his support, but for his technical knowledge. If he will give me permission, I will write to him with details of exactly where the project is at, so that he can give reassurance to all of his many followers in Ukraine.

Ukraine: 1,000 Days

Alex Sobel Excerpts

Tuesday 19th November 2024 Commons Chamber

[Mr Lammy]

I understand the right hon. Gentleman’s strength of feeling and why, as a Back Bencher, he is doubling down on the issue. I think he will see that this Government have led and continue to lead in the debates right across our allies. He will also understand, however, that we need communication discipline on these issues. That is what we see with our opponents in Russia, the DPRK and Iran. I therefore lament a little some of the debate that we read across the newspapers. Members are not going to get those sorts of leaks or suggestions from me at the Dispatch Box.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

As chair of the all-party parliamentary group on Ukraine, I thank the Foreign Secretary and the Defence Secretary for all their staunch work in support of Ukraine.

We have heard a lot of talk about escalation. Last week, we had a group of Ukrainian MPs in Parliament talking about the continued and escalating attacks on the country and particularly on Kharkiv, a city of 2 million people. Today, we have a Moldovan group here talking about an attempt by Russia, using dirty cash brought in suitcases from Moscow, to buy their elections. We are seeing a hybrid war against the whole of Europe, including us in the United Kingdom.

The threats of escalation by the Kremlin are happening irrespective of the action of the United Kingdom or any other country. North Korean troops are in Ukraine now, fighting on European soil. Will the Foreign Secretary reassure me that whatever the threats from the Kremlin, our support will be unstinting and we will not stand back from supporting Ukraine’s right to self-determination?

[Mr Lammy]

I thank my hon. Friend for all he does in the all-party parliamentary group on Ukraine to champion the country’s cause in this Parliament and beyond, with the visits he has made and his updates to me over the past few years. He raises a number of issues and I want to assure him that we are alongside him and we continue to be alongside the Ukrainian people.

My hon. Friend raises an issue that I think is important and which has not come up so far: the malign activity of Russia and the hybrid threats it is engaged in right across the region. One country in particular—Moldova—is on the front line of Russian hybrid threats, and the interference in its elections has been entirely unacceptable. We stand in solidarity with the people of Moldova and continue to support them against the threats to journalists and the disinformation from the Russian regime, and the other extreme examples being received.

Oral Answers to Questions

Alex Sobel Excerpts

Tuesday 30th July 2024 Commons Chamber

[Anneliese Dodds]

The UK has encouraged dialogue between Ethiopia and Somalia on the Ethiopia-Somaliland memorandum of understanding. We have also expressed our full respect for the sovereignty and territorial integrity of the Federal Republic of Somalia. I would of course be happy to meet the right hon. Gentleman to discuss any issue, including that one.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I welcome my right hon. Friend the Foreign Secretary and his team to their places. I have discussed with many of them the chronic human rights situation in West Papua over many years. In 2019, President Widodo invited the United Nations High Commissioner for Human Rights to visit West Papua, but that visit has not yet taken place. What steps are the Government taking to ensure that such a visit takes place, with both the Indonesian Government and the United Nations?

[Catherine West]

I thank my hon. Friend for his interparliamentary work on that important issue. The UK strongly supports the efforts of the authorities and civil society to address the legitimate concerns of the people of Papua, as my hon. Friend has highlighted many times in this House. We continue to monitor the situation in Papua, including the ongoing issue of internal civil displacement caused by clashes between separatists and Indonesian security forces in Papua. The UK remains supportive of a visit by the UN High Commissioner for Human Rights.