THE BLOG
04/03/2015 05:34 GMT | Updated 03/05/2015 06:59 BST

UK Property Gives Global Corrupt a Home

If you walk down a residential street in central London, the chances are that some, perhaps the majority, of property is owned by overseas buyers.

You might wonder who they are. To find out, your first port of call would be the Land Registry, which lists who owns property in England and Wales. What this might tell you is that many properties are indeed owned by overseas buyers - but not the ones you would expect. You will almost certainly not find the names of Russian Oligarchs or Chinese government officials or the children of foreign dictators. You will probably find unknown shell companies based in off-shore jurisdictions like the British Virgin Islands, the Cayman Islands and the Channel Islands.

The problem is that the Land Registry itself does not know who is behind these shell companies, or in the jargon, who is the 'beneficial owner' of the property.

There's nothing wrong with foreign investment per se. But currently, corrupt politicians, officials and businesspeople are able to launder money through the UK, buying much sought-after London lifestyles at very little personal risk. In London's most exclusive postcodes, property is often bought using anonymous shell companies based in off-shore jurisdictions, such as the British Virgin Islands, with not even the Land Registry knowing who the real owner is.

36,342 London properties covering a total of 2.25 square miles are held by hidden companies registered in offshore havens, according to new research from Transparency International, published today.

The research - analysing previously unseen data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit - found that 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities.

Clearly, there is a problem that needs to be addressed. For those in possession of corrupt funds, a property in the UK can provide a secure investment, but also help bestow prestige, respectability and a bolthole when the going gets rough at home. Most importantly, UK property can be acquired anonymously through companies registered in secrecy jurisdictions and anti-money laundering checks can be bypassed with relative ease.

However, 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 sleep-walked into this situation, and the Government needs to act quickly to make sure that the UK does not become the destination of choice for global corruption.

Today, Transparency International UK launches the Unmask the Corrupt campaign, calling on the incoming UK government to establish transparency over who owns the companies that own so much property in the UK.

When transparency is so poor that not even the Land Registry knows who really owns Britain, the space has been created in which corruption can thrive. Corrupt money can be used to buy British property with no scrutiny or accountability. It's time to make UK property more transparent, and unmask the corrupt.