British PM promises crackdown on ‘dirty money’ in property

Britain on Tuesday said it would clamp down on the use of “dirty money” to buy up expensive properties, promising to expose the owners of anonymous foreign shell companies hiding cash in London’s buoyant housing market.

Prime minister David Cameron, speaking in Singapore on a trade visit, said the promise was part of anti-corruption efforts to ensure Britain did not become a "safe haven for corrupt money from around the world".

“We know that some high-value properties – particularly in London – are being bought by people overseas through anonymous shell companies, some of them with plundered or laundered cash,” Mr Cameron said. “There is no place for dirty money in Britain.”

Property in parts of London is among the most expensive in the world. This, combined with strong property law and looser restrictions on foreign buyers than some other international locations, makes it an attractive place to bury cash in assets that will hold their value.

In 2012 a British court ruled that an eight-bedroom London mansion, worth £10 million (€14 million), was bought using stolen Libyan state funds by Saadi Gadafy, son of former dictator Muammar Gadafy.

About £122 billion (€171.5 billion) of property in England and Wales is owned via offshore companies, Mr Cameron said.

He announced that a central registry of land and properties owned by foreign firms would be set up, giving details of who owns some 100,000 titles.

Persuasive effect

Anti-corruption campaign group

Global Witness

welcomed the measures, saying improved transparency would have a strong persuasive effect in deterring criminals looking to hide stolen money.

“The challenge will be to make sure than any information kept on a register is up to date and accurate,” said Robert Palmer, leader of the Global Witness campaigns involving banks and anonymous firms.

Mr Palmer also urged the government to press for similar levels of transparency from Britain’s overseas territories, many of which are used in the complex company structures often employed to avoid or evade tax.

Legal firm Eversheds cautioned that the measures alone would not stop the flow of money through property.

“The offshore corporate landowners are not the end of the trail,” said Polly Sprenger, a specialist in corporate and economic crime at Eversheds.

“For real advancement,” she said, “the government would need to insist on exposure of the ‘ultimate beneficial owner’, that is, the individuals behind the corporate front.”

Cameron also said the government would consider implementing rules to force foreign firms wishing to bid on government contracts to provide full details on their ownership structure. – (Reuters)