New UK property register targets Londongrad’s oligarchs
Londongrad will be no more, according to UK plans outlined yesterday. As a response to the invasion of Ukraine, the British Government is bringing forward legislation that creates a new public register of all properties in the UK. The move is targeted at Russian oligarchs who have been investing heavily and anonymously in real estate in England.
The new rules will “send a clear warning to those who have or who are thinking about using the UK property market to launder ill-gotten gains, particularly those linked to the Putin regime,” said Kwasi Kwarteng, the Business Secretary.
The Economic Crime (Transparency and Enforcement) Bill, presented to Parliament yesterday, was first proposed in 2016 by David Cameron’s Conservative government but it has stalled since then.
The new property register will apply retrospectively to assets bought up to 20 years ago in England and Wales and since 2014 in Scotland. This means that the secretive companies that have bought them will have to reveal the name of the beneficial owner or face restrictions on selling the property and a possible prison term of up to five years.
Properties held by trusts will also be brought into the scope of Unexplained Wealth Orders, a system which has existed since 2017 and allows British authorities to force disclosure of sources of wealth and seize assets.
Kwarteng said the new register of beneficial ownership of property will be up and running within “a few months”, but Tory as well as Labour MPs said the process should be speeded up. “Every day we waste now gives those benefitting from Putin longer to hide their dirty money elsewhere,” said James Murray, a Labour MP.
If the new rules will be enforced they will have a significant impact on the prime and super-prime residential market in London and Surrey, where Russian oligarchs have been buying luxury homes and estates for many years.
The Pandora Papers leak last year revealed the details of 1,500 UK properties worth £170 billion owned by offshore companies, several of which are linked to Russian oligarchs close to Putin. For example Mikhail Gutseriev, who last year was the target of sanctions by the US, the EU and the UK, appears to own over £50 million of property in London.
The UK Government’s move is intended to show solidarity with the people of Ukraine but it also wants to safeguard the reputation of London, long regarded as a safe haven for oligarchs and what PM Boris Johnson calls their “ill-gotten gains”. The UK capital no longer wants to be known as “Moscow-on-Thames”.