12.10.2018 Offshore owners of British property will be forced to reveal their true identities

12.10.2018 Offshore owners of British property will be forced to reveal their true identities

The National Crime Agency said three years ago that overseas criminal gangs were using British property transactions to launder billions of pounds in corrupt funds. Parliament’s Foreign Affairs Committee went further earlier this year, saying that corrupt Russian funds laundered through the UK, including through purchasing property, posed a threat to national security.

In order to repair UK’s reputation as a high-risk jurisdiction for money laundering, the government is introducing legislation to force offshore companies holding UK properties to reveal the identities of their true or “beneficial” owners. Failing to do so could be punished with up to five years in jail and unlimited fine.

Under the new legislation, overseas companies that own UK properties will be required to identify their true owners on a publicly available register. The owners’ names will appear on a corporate registry, making it easier for law enforcement to seize assets linked to criminals or bought through “dirty money”.

Transparency campaigners, some of whom have battled current rules for several years, welcomed the legislation.

Duncan Hames, the director of policy at Transparency International UK, said “These proposals finally put to paper a long-promised tool that will help lift the veil of secrecy over 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.”

The proposed measures are not country-specific and, while they are likely to hit the large number of Russian oligarchs who have bought a large number of properties during the last few years, Pakistanis or nationals of other countries having UK properties through offshore companies will also be compelled to declare ownership.