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Transparency International claims BOT are used to launder 'corrupt' money

Monday, March 9th 2015 - 08:07 UTC
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New research showed 36,342 London properties covering 2.25 square miles were held by hidden companies registered in ‘offshore havens’, the organization said. New research showed 36,342 London properties covering 2.25 square miles were held by hidden companies registered in ‘offshore havens’, the organization said.
According to data from Met’s Proceeds of Corruption Unit, over £180m worth of property in the UK is or has been under criminal investigation According to data from Met’s Proceeds of Corruption Unit, over £180m worth of property in the UK is or has been under criminal investigation
Transparency should be established over who owns the companies that own so much property through making transparency a Land Registry requirement. Transparency should be established over who owns the companies that own so much property through making transparency a Land Registry requirement.

British territories including Gibraltar are being used by criminals and foreign officials to launder ‘corrupt’ money through the purchase of up market UK properties, according to the respected anti-corruption organization Transparency International.

 The organization said the British Government needed to act quickly to make sure the UK does not become “the destination of choice for global corruption”. In a report published this week, campaigners said ‘corrupt money’ was finding a safe haven in the UK property market.

New research showed 36,342 London properties covering a total of 2.25 square miles were held by hidden companies registered in ‘offshore havens’, the organization said.

“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 Robert Barrington, the organization’s executive director.

“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.”

“It is astonishing that the UK has sleepwalked into this situation, and the [British] Government needs to act quickly to make sure that the UK does not become the destination of choice for global corruption.”

“Some relatively simple measures would be a good start, such as the Land Registry requiring transparency over who owns the companies that own so much UK property.”

The study, analyzing data from the Land Registry and the Metropolitan Police Proceeds of Corruption Unit, found that 75% of properties whose owners were under investigation for corruption made use of offshore corporate secrecy to hide their identities.

According to data released by the Met’s Proceeds of Corruption Unit, over £180m worth of property in the UK is or has been under criminal investigation as the suspected proceeds of corruption in the last 10 years.

This total value represents 120 properties in the UK that have been brought under investigation since 2004 that have a recorded or estimated value. A remaining 24 have no estimated value.

This is believed to be the tip of the iceberg. More than 75% of the properties under criminal investigation use offshore corporate secrecy.

The report said many of the properties under investigation by the Met’s Proceeds of Corruption Unit were held through companies registered in British Overseas Territories and Crown Dependencies.

According to its data, 49% of those properties were registered in Jersey. The second most common jurisdiction was the Isle of Man at 15% and the third was the British Virgin Islands, with 10%.

The report added that, according to the Met’s data, 5% of properties under investigation for grand corruption in the UK were held through Gibraltar-registered companies.

The data confirms for the first time that companies incorporated in the Crown Dependencies and British Overseas Territories are the preferred option for concealment for those under criminal investigation for grand corruption in the UK, Transparency International said.

Detective Chief Inspector Jon Benton, Director of Operations at the Met’s Proceeds of Corruption Unit, told campaigners that properties purchased with illicit money were nearly always layered through off-shore structures.

“The lack of access to beneficial ownership information about offshore companies that hold property in the UK is a major barrier for our investigations,” he said. “Investigators may spend months and years attempting to peel back layers of secrecy in order to uncover how the proceeds of corruption are being laundered in the UK.”

The campaigners make 10 recommendations for reform, calling for action from the British Government, lawyers and estate agents to ensure the property market is no longer a safe haven for corrupt funds.

The most important is that transparency should be established over who owns the companies that own so much property through making transparency a Land Registry requirement.

The Metropolitan Police (MPS) said the report shone a light on how the property market was exploited by corrupt officials to launder money stolen from civilians across the globe.

A spokesman said: “Investigating grand corruption is a complex process requiring protracted cross-jurisdiction work with authorities around the world.”

“Working with non-governmental and civil society organisations is integral to improving understanding of the scale of the issue and tackling it. With this in mind, we contributed to the research for Transparency International’s report.”

“Since the MPS launched the Proceeds of Corruption Unit (POCU) in 2007, it has investigated ownership of 144 properties worth over an estimated £180 million. These sensitive operations are ongoing.

“The POCU currently has assets worth £88.5 million under restraint. It has confiscated £8.5 million, of which over £6 million relates to properties purchased in the UK. It has repatriated £1.27 million and continues to work on the repatriation of other monies.”

“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 also face challenges in other forms. For example, relationships with some jurisdictions can be set back by a change in regime, and the influence of corrupt politicians on a country’s own anti-corruption organization can hamper access to crucial evidence.”

“The MPS is committed to working with partners across the globe to overcome these issues, and 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 neighborhoods.”

Transparency International’s report is called ‘Corruption on your Doorstep: How corrupt capital is used to buy property in the UK’. An interactive map detailing the number of offshore-owned homes per London borough can be viewed at ukunmaskthecorrupt.org

A UK Government spokeswoman 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.”

The Gibraltar Government did not react to the Transparency International report but has repeatedly stressed that the Rock, as an EU jurisdiction, complies fully with financial transparency and anti-money laundering obligations under European and international regulations.

Categories: Politics, International.

Top Comments

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  • ilsen

    I welcome all the troll comments, especially that we have all the money, and they don't!
    arf!
    Legal or illegal, the UK is rich and they are poor.
    arf! arf!

    Mar 09th, 2015 - 08:51 am 0
  • Englander

    Personally I would prefer to see all such properties confiscated and the proceeds spent on more destroyers, frigates, tanks, typhoons and troops. That would be at the same time as the UK stopped all foreign aid and stopped immigrants claiming any kind of benefit. Not holding my breath as no current British politician is up to the job that urgently needs doing.

    Mar 09th, 2015 - 09:02 am 0
  • ilsen

    @2
    First on the list should be the fact the UK sends £20 million, per annum, via the EU. In some form of 'Aid' budget.
    This should be stopped immediately, especially since Argentina constistantly claims it's a 1st world country that deserves a a seat at the 'top-table' in the UN.
    Write to your MP. I have done so.
    Without your voice, without the the ground swell of public opinion.

    Mar 09th, 2015 - 10:09 am 0
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