There is evidence that the UK property market is being used as a safe haven for corrupt money stolen from around the world, facilitated by laws which allow UK property to be owned by secret offshore companies.
Research from Transparency International UK has identified 176 properties worth £4.4 billion in the UK that have been bought with suspicious wealth. £1.8 billion of this is from the UAE, £940 million (a fifth of our 4.4 figure) from Russia, £762 million from Ukraine, and £252 million from Kazakhstan. We have also identified properties we believe are owned by individuals in Azerbaijan , Nigeria, Libya, Pakistan and others.
The owners of these properties were only brought to light due to leaks and court documents, so this is likely the tip of the iceberg.
What happened at the Summit
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.
What has happened since?
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. The consultation closed in September 2018.
A joint parliamentary committee was appointed in February 2019 to scrutinise the draft bill prior to legislation being laid in the UK Parliament. It issued a report in May 2019 urging the Government to put the draft legislation to Parliament “as soon as possible” while also noting the “need for a Register of Overseas Entities has increased”. The Government responded to this report by reaffirming its commitment to legislate for a public register of the real owners of overseas companies that own or buy property in the UK.
TI-UK and others called on the Government to include this legislation in the December 2019 Queen’s Speech. It was included with a commitment to progress legislation.
HM Government reiterated its commitment to progress legislation for the register when Parliamentary time allows in UK Anti-Corruption Strategy Year 2 Update.
TI-UK is calling on the Government and MPs from all parties to continue to support this register and ensure its passage through Parliament at the earliest opportunity. Every day that passes without it is another day for stolen wealth to anonymously enter our property market.
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.