Given the investigation and model defined, perhaps we should look inward here at home as the United States, especially a handful of cities are precisely the same.
Corruption On Your Doorstep: How Corrupt Capital Is Used to Buy Property in the UK
Corruption on your Doorstep looks at how corrupt money is used to buy property in the UK by analysing data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit. Findings in the report include the fact that 36342 London properties totalling 2.25 sq miles are held by offshore haven companies.
The research – analysing 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.
Key statistics
- £180m+ worth of property in UK have been brought under criminal investigation as the suspected proceeds of corruption since 2004. This is believed to be only the tip of the iceberg of the scale of proceeds of corruption invested in UK property. Over 75% of the properties under criminal investigation use offshore corporate secrecy
- The average price of a property under criminal investigation in the UK is £1.5m. The minimum is £130,000, the maximum is £9m and the median is £910,000. 48% of properties investigated were valued at over £1m
- 36,342 London properties totalling 2.25 sq miles are held by offshore haven companies. Of these, 38% in the British Virgin Islands, 16% in Jersey, 9.5% in Isle of Man, and 9% in Guernsey
- Almost one in ten properties in the City of Westminster (9.3 per cent), 7.3 per cent of properties in Kensington & Chelsea, and 4.5 per cent in the City of London are owned by companies registered in an offshore secrecy jurisdiction. TI-UK has launched an interactive map of London which reveals the statistics for each borough – ukunmaskthecorrupt.org
- In 2011 alone £3.8bn worth of UK property was bought by British Virgin Islands–registered companies
- According to the latest figures, which cover October 2013 to September 2014, estate agents contributed to only 0.05% of all Suspicious Activity Reports (SARs) submitted. This figure does not match the risks posed by money launderers to the UK property market
Transparency International makes 10 recommendations for reform, calling for buy in from the UK Government, lawyers, and estate agents to ensure that the UK property market is no longer a safe haven for corrupt funds. Action from the British Overseas Territories is also necessary to end this crisis.
The key recommendation is thattransparency should be established over who owns the companies that own so much property in the UK through making such transparency a Land Registry requirement. Sign our petition to UK political party leaders here.
A visual story of this journey and interactive map detailing the number of offshore-owned homes per London borough can be viewed at ukunmaskthecorrupt.org
I took a “Kleptocracy tour” around London and discovered the corruption capital
In part, NewStatesmen: London is a globally leading city, bustling with culture and educational capital, a booming economy, and abiding by the rule of law. But, combined with regulations allowing for the anonymous purchase of real estate, it’s for these reasons that the UK’s capital is one of the world’s largest laundromats, a city where money from corruption is being poured into property.
The scale of money laundering
The amount of money laundered through the UK is estimated to be at £48bn, or two per cent of GDP, while it estimated £120bn worth of UK property is owned by offshore entities and up to 36,000 properties in London exist where offshore havens were used to hide the true buyers’ identities.
How they get away with it
“This is a real problem,” Simon Farrell QC, an expert in money laundering and corruption, says. “The only reason for corporate ownership is to disguise the true ownership and for those with dubious funds and who have avoided tax to shelter profits in London, a safe haven where the rule of law prevails. It’s a disgrace.”
So now, “London is now the premier location worldwide for corruption-based money laundering,” says Ben Judah, author of a book about Russia called Fragile Empire (2013).
