News
Fast-track legislation to crackdown on Russian 'dirty money' in UK property market
Monday 28th February 2022
Marca De Silva
The government is planning to bring forward legislation as soon as this week to create a register for the beneficiaries of overseas firms, which would unmask the true owners of properties in the UK and potentially subject them to sanctions.
The move is designed to expose 'dirty money' invested in the UK property, with a view to identifying and clamping down on Russian oligarchs who have invested in the UK property market.
The Matryoshka doll of Russian-owned firms, which are often set-up offshore so the true owners are not identified, have long been used to purchase luxury homes in prime central London, despite the fact that MPs and campaigners have for years warned that this loophole can be used for money laundering by people linked to the Kremlin.
Boris Johnson's government has repeatedly promised to look into this form of investment, and is now looking to take immediate action, in light of the Russian invasion of Ukraine. But while the register would put offshore property owners "on notice", it is expected the measures could still take up to a year to enforce.
New processes to verify the identities of the company owners - to be carried out by Companies House - were not expected to be introduced to parliament until the autumn.
A government source told Sky News: "The PM is insisting we do it, it's now a top priority. But we would still be struggling to implement it this year.
"If Companies House can't verify who these people are, there's absolutely no point as people can just make up names and addresses."
Britain has already committed to implementing the "largest and most severe package of economic sanctions that Russia has ever seen" following the invasion of the Ukraine.
Reflecting on the sanctions, Martin Cheek, managing director at SmartSearch, said: "These sanctions are far-reaching, and the government clearly intends that Russia should suffer financially as a result of its invasion of Ukraine.
"However, if these sanctions are to be fully effective then it is essential that all regulated sectors in the UK play their part by undertaking effective due diligence to ensure that anyone on a sanctions or politically exposed person's list is highlighted."