Kleptocrat crackdown will force property ownership into the open

Foreign owners of British property hiding behind shell companies could face five years in prison under measures to crack down on Russian “kleptocrats” using “Londongrad” to launder their wealth. The plans, which will be announced by Boris Johnson today, will force owners to disclose their identities by making it illegal to hide the true “beneficial” ownership of UK property. Penalties of up to five years in prison will be coupled with new powers for the police to investigate the owners of UK assets that are believed to have been paid for by money laundering. The register of overseas entities will apply retrospectively to property bought by overseas owners up to 20 years ago in England and Wales and since December 2014 in Scotland. It will be held by Companies House, with support from the UK’s land registries. Entities who do not declare their “beneficial owner” on the register will face restrictions over selling property and those who break the rules could face up to five years in prison. Research by the anti-corruption organisation Transparency International revealed this month that £1.5bn of UK property had been bought since 2016 by Russians accused of corruption or with close links to the Kremlin. This could be an underestimate because those who own many of the 100,000 UK properties held through foreign companies are not required to disclose their identities on any UK register. Johnson said it would ensure there was “no place for dirty money in the UK”. He added: “We are going faster and harder to tear back the façade that those supporting Putin’s campaign of destruction have been hiding behind.” The long-awaited measure was first proposed several years ago to tackle the £100bn of illicit financing that the National Crime Agency estimates is channelled through the UK each year. Draft legislation was drawn up in 2018, but was inexplicably put on hold by the government. Separately, a new “kleptocracy” cell based in the National Crime Agency will be set up this week to investigate sanctions evasion. Foreign secretary Liz Truss said more “kleptocrats” will be hit with restrictions in the coming weeks, telling them: “We will come after you.” A list of 100 oligarchs has apparently been drawn up, with plans to sanction another “every few weeks”. Michael Gove, the housing secretary, is drawing up plans for new powers that could see those hit by sanctions stripped of their properties. Under the proposals, first raised at cabinet, the government would introduce emergency legislation enabling the state to seize residential and commercial property. It is thought this could be rushed through as early as next week. A senior government source said the seized property could be used to house Ukrainian refugees. The Times (£) and The Times (£) The FT (£) The Guardian