UK property market ‘safe haven for stolen cash’


A view of London’s Egerton Crescent, Britain’s most expensive street (file photo)A corruption watchdog in the UK says British property is a safe haven for money stolen around the world, urging the government to toughen its anti-money-laundering laws in a bid to ensure Britain is not “the destination of choice for global corruption.”

The report, released on Wednesday, was made by the campaign group Transparency International UK.

“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 executive director of Transparency International UK.

“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,” Barrington added.

According to the watchdog, over 36,000 properties covering 3.6 square kilometers in the capital of London, where house prices have soared in recent years, are held by firms in offshore tax havens. In the central London borough of Westminster, where the British government is located, almost one in ten properties is owned by an offshore company, while the rate in the capital’s prestigious Kensington and Chelsea districts rose by 7.3 percent.

The report said that, in 2011 alone, £3.8 billion ($5.8 billion) worth of British property were purchased by companies registered in the tax haven of British Virgin Islands.

The watchdog also revealed that nearly £200 million ($307 million) of property has been brought under criminal probe since 2004 as it is suspected that those properties were purchased with corrupted money. Transparency International added that the actual amount is likely to be much higher as the United Nations (UN) estimates that only one percent of laundered money is ever detected.

The campaign group urged the Tory-led coalition government to reform the country’s anti-money-laundering rules by demanding information on the ownership of holding companies in tax havens if they are used to buying properties, both residential and commercial.

A government spokeswoman responded to the watchdog report, saying it was committed to tackling illicit financial flows and the misuse of companies.

This comes as the UK has seen soaring property prices in recent years. In 2014, average property prices soared by 17.8 percent in London, while the rest of the country saw a price growth of 7.2 percent.

(source: Press Tv)


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