Estimated Completion, April 2018
May 8, 2017
There’s evidence that the UK property market has become a safe haven for corrupt money stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies.
We’re not talking about just one or two secret homes. Transparency International UK research shows that 36,342 London properties are owned by companies registered in offshore havens. Not even the Land Registry knows who owns these homes.
Over 75% of properties under investigation for corruption in a recent ten year period used offshore corporate secrecy, demonstrating that this is a clear vehicle for money laundering.
In the Summit communique, leaders agreed to
“…take steps to eliminate loopholes that allow corruption to thrive through the misuse of these entities, and work, in accordance with national law, to ensure a level playing field between foreign and domestic companies in respect of requirements to provide beneficial ownership information.”
At the Anti-Corruption Summit, the UK committed to “establish a public register of company beneficial ownership information for foreign companies who already own or buy property in the UK, or who bid on central government contracts.” Then-Prime Minister David Cameron said that public registers of beneficial ownership information were the “gold standard”, and every country should ultimately aim to have them.
This commitment was also reiterated in the UK’s Open Government Partnership 2016 – 2018 National Action Plan.
The UK opened a call for evidence on a beneficial ownership register to increase the transparency of overseas investment in property and public contracts in April 2017. The results of the consultation were published in March 2018.
In January 2018 the UK Government announced that the UK would not put forward primary legislation on introducing a public register, revealing the true owners of overseas companies buying UK property, until at least summer 2019. This means the Government has missed its original deadline of April 2018.
In line with the Government’s new timetable, the Department for Business, Energy and Industrial Strategy opened a consultation on a draft bill for the register in July 2018.
As Duncan Hames, Director of Policy at TI-UK, said (23 July 2018):
“These proposals finally put to paper a long-promised tool that will help lift the veil of secrecy of property ownership that corrupt individuals exploit here. After several years of campaigning and advocacy we are pleased that the first steps to introducing this important register have been made.”
“For too long the UK has welcomed corrupt money and very often it has been our property market that has provided a hiding place. This bill should eventually leave corrupt individuals one less place to stash their dirty money. Once this consultation concludes we expect the Government to make this legislation an urgent priority.”
“We now call on MPs from all parties to continue to support this register and ensure its passage through Parliament at the earliest possible opportunity. Every day that passes without it, is another day for stolen wealth to anonymously enter our property market. It’s also essential that once implemented this register should be maintained with the highest levels of integrity, to ensure it is accurate, effective and ultimately a sharp tool in ending the UK’s role as a safe haven for corrupt money.”
The consultation document published alongside the draft bill sets out the Government’s plans for publishing the equivalent information for public contracts separately: “The information about beneficial ownership [of companies that are awarded contracts that meet certain conditions or thresholds] that will be required will, as a minimum, be equivalent to that proposed for the Register of Overseas Entities, and it will be published in an equally transparent way. The Government is currently considering mechanisms including the Contracts Finder Service (currently used to publish contract award information) to achieve this. The Government believes that using a different mechanism to that proposed for overseas entities dealing with land is proportionate, will better meet the anti-corruption aim, and will fit more naturally with the existing scheme of procurement rules, drawing on existing transparency mechanisms. The Government remains committed to the timetable already laid out. Cabinet Office is leading on this strand of work.”
— Transparency Int’lUK (@TransparencyUK) April 5, 2017