Billions of pounds worth of UK property is currently being held by secretive offshore companies, serving as a possible safe haven for stolen money, according to a recent corruption report. Offshore companies are firms registered abroad – usually in offshore financial centers.
One investigator said that it is almost “like putting money in a Swiss bank – they have become ubiquitous for the corrupt”.
Anti-corruption campaign group Transparency International identified 36,342 properties in London that are held by companies registered in offshore havens such as the British Virgin Islands, Jersey and the Isle of Man.
The report found that one tenth of properties in Westminster are owned by a company in an offshore haven.
London is a hotspot where secretive companies hold property.
“There is growing evidence that the UK property market has become a safe haven for corrupt capital stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies,” said Transparency International executive director Robert Barrington.
“This has a devastating effect on the countries from which the money has been stolen, and it’s hard to see how welcoming in the world’s corrupt elite is beneficial to communities in the UK.”
The group proposes that the Land Registry require transparency concerning who the owners of companies are, as a means of ensuring that Britain is not “the destination of choice for global corruption”.
Obtaining evidence can take years, says police spokesman
Det Ch Insp Jonathan Benton, head of operations at the Met’s proceeds of corruption unit, said:
“In nearly all the grand corruption cases we investigate, we find what we suspect is proceeds of corruption being used to purchase high-value properties,”
A metropolitan police spokesman said:
“It can take years to unpick the layers of corruption and secrecy which ultimately result in the purchase of UK properties,”
“Such properties are often owned by companies registered in foreign jurisdictions and while secrecy jurisdictions have been co-operative with our investigations, obtaining evidence can take years.”
“We would welcome any regulation which makes it harder for corrupt officials to hide money that has been stolen from civilians across the world, in our own neighbourhoods.”
The government says that it is trying to tackle the problem
The British government said it is committed to cracking down on illicit money flows and improving corporate transparency.
A government spokesman said:
“The government is committed to tackling illicit financial flows and the misuse of companies. That is why we are taking forward world leading reform to improve corporate transparency and working hard to encourage others to take equally ambitious action in this space.”
Comment from a spokesman for the States of Jersey:
A spokesman for the States of Jersey said:
“We know the beneficial ownership of all companies incorporated in Jersey and that information is available to law enforcement and tax authorities on request.
“Therefore, there is no reason why the UK police, using the appropriate channels, would not be able to get information on the beneficial owners concerned.”