The government says the law will change to allow more allies of President Putin to face punishment.
Image source, EPA
The government is to change the law to make it easier to introduce sanctions against Russian oligarchs, after criticism the UK was acting too slowly.
Ministers are tabling amendments to the Economic Crime Bill which are designed to allow the UK to align with penalties imposed by allies in the EU and US.
Prime Minister Boris Johnson said foreigners trying to launder money in the UK would have “nowhere to hide”.
But Labour accused the government of making a “U-turn under pressure”.
Ministers have already imposed asset freezes on individuals and companies with links to Russian President Vladimir Putin, following the invasion of Ukraine nine days ago.
But opposition parties have said the government needs to do more to tackle wealthy Putin allies who store large amounts of money in London.
The bill, which has cross-party support, is expected to be fast-tracked through Parliament on Monday.
Outlining its amendments, the Foreign Office said the “appropriateness test” – a threshold that needs to be met when imposing sanctions on individuals – would be removed.
It is also speeding up the deadline for overseas companies to declare their true owners – from 18 months to six months. Maximum fines for non-compliance with this rule are set to increase from £500 to £2,500 per day.
The bill is expected to become law by the middle of this month.
Mr Johnson said: “The UK has led the way with the toughest package of sanctions against Putin’s regime and we’re bolstering this with new powers in our arsenal to go further and faster.
“We will ramp up the pressure on those criminal elites trying to launder money on UK soil and close the net on corruption. They will have nowhere to hide.”
Shadow foreign secretary David Lammy welcomed the government’s “U-turn”, but added: “It is totally unacceptable that Putin-linked oligarchs who should have already faced sanctions are being allowed to move their money around because of government incompetence.
“Ministers should have introduced the laws needed to work in lock-step with our allies and partners months ago, not be left sanctioning hundreds fewer individuals and entities than the EU and the US.”
Recent research by campaign group Transparency International suggests £1.5bn worth of UK property has been bought by Russians accused of corruption or links to the Kremlin since 2016.