Register of overseas mansion owners ‘first step’ to lifting the veil of secrecy but critics warns rules are riddled with loopholes for criminals to exploit.
The UK has launched a weapon to help target oligarchs and wealthy criminals who launder their money through UK property.
The Register of Overseas Entities is designed to help tackle the estimated £100bn a year of ill-gotten gains the National Crime Agency believes is channeled through the UK and London in particular.
The move comes six years after it was first announced by the former prime minister, David Cameron.
New purchases involving anonymous overseas buyers must now disclose the beneficial owners, with information to back it up, to Companies House before lawyers can make an application to UK Land Registry.
It aims to stop criminals hiding behind secretive chains of shell companies, and to support government efforts to root out Russian oligarchs using property in Britain to hide dirty money, the Department for Business, Energy and Industrial Strategy said.
“To ensure we are free of corrupt elites with suspicious wealth, we need to know who owns what,” junior business minister Lord Callanan said. “We are lifting the curtain and cracking down on those criminals attempting to hide their illicitly obtained wealth.”
Foreign entities that already own land in the UK that is within the scope of the register will have six months to comply by identifying their beneficial owner to Companies House.
The Companies House chief executive, Louise Smyth, said: “The launch of this new register is a significant milestone and marks a turning point in our transformation as we look to play a much greater role in tackling economic crime.”
The register will apply to property bought since January 1999 in England and Wales, and since December 2014 in Scotland.
Those not complying with the new rules could face sanctions including fines of up to £2,500 ($3,043) per day or five years in prison.
The register had been stalled but Russia’s invasion of Ukraine revived it as the UK sought to impose sanctions on Russian billionaire oligarchs and President Putin’s supporters who treated London as their playground.
Critics claim the move is a good start but point out that the register is full of loopholes that will be easily exploited by professional advisers.
The anti-corruption group, Spotlight on Corruption, described the register as a “crucial first step” toward clamping down on criminals.
“If implemented properly and penalties for non-compliance properly enforced, the register could be the world’s most transparent and accurate source of information on foreign ownership of property,” the group said.
“We look forward to working with Companies House to help make the register the gold standard for other countries to follow.”
Rachel Davies Teka, of Transparency International, said: “Transparency over the property sector is vital to help tackle criminals and the corrupt using Britain as a haven for their dirty money. This register should help start to lift the veil of secrecy over offshore companies that own real estate in the UK – a loophole that has been exploited by oligarchs and kleptocrats for too long.”
