Prime Minister David Cameron Vows to Clamp Down On Corrupt Money In UK Property Market

David Cameron announced today that the UK government will take steps to stop corrupt money from entering the UK’s property market, in a move welcomed by Global Witness.  Specifically, the UK government has committed to: 

• Consulting on ways to make property ownership by foreign companies much more transparent; 
• Publishing Land Registry data on which foreign companies own which land and property title in England and Wales.
  

“We welcome David Cameron’s announcement to clamp down on corruption in the UK property market,” said Chido Dunn at Global Witness. “Our recent investigations have revealed that corrupt officials use London houses as a safe haven for their stolen loot.What’s more, they often hide their identities behind layers of offshore companies.  What the UK needs now is to shine a light on who really owns property in this country.”

Global Witness’ recent reports have shown that London’s high-end property market is one of the go-to destinations to give questionable funds a veneer of respectability (1). This kind of access to the financial system entrenches the corruption that keeps citizens in poor countries poor and threatens global stability.  

It is currently far too easy for the criminal and corrupt to launder money through luxury property, hiding the real owners behind anonymous companies, often registered in secrecy jurisdictions like the BVI and hidden behind “nominee” directors. According to Transparency International (UK), at least £122bn worth of property in England and Wales is now owned by companies registered offshore, and 75% of properties whose owners are under investigation for corruption made use of this kind of secrecy. 

Global Witness is calling for all companies that own UK property to be required to tell the Land Registry who their beneficial owners are, and for the UK to convince the British Overseas Territories and Crown Dependencies to create their own public registers of beneficial ownership.

“There is an urgent need for transparency in the UK’s property market and its system of company ownership. Our research shows that the housing market is a big blind spot in the UK’s anti-corruption fight, and that has dire consequences. Some of the Gaddafi family’s stolen loot ended up in London – a famous example but far from a one-off. Unless we know who is behind these companies and where their money has come, the cash will keep pouring in,” said Chido Dunn.

The UK government has also committed to examining whether there is a case for insisting that any non-UK company wishing to bid on a contract with the UK government should also publicly state who really owns it.  This is another welcome move, as just last week the World Bank made a similar commitment in relation to companies participating in Bank-financed contracts.