UK Government brings forward Economic Crime Bill

The UK Government has accelerated a bill designed to prevent the laundering of ‘dirty money’ in the UK’s housing markets by introducing a register of overseas entities that highlights the owners of international companies that own properties and land in the UK.

Much delayed legislation outlined in the Economic Crime (Enforcement and Transparency) Bill is now expected as early as this week, in part to target the finances of Russian Oligarchs, close to President Putin and operating within the UK. However, measures involving changes of procedures by Companies House may still take many months to impact those currently under scrutiny.

Register of Beneficial Ownership

A beneficial ownership register would mean that anonymous foreign owners of property within the UK would have to reveal their identities and could no longer hide behind shell companies.

The register is likely to apply retrospectively, including property bought by overseas nationals, up to twenty years ago in England and Wales and since 2014 in Scotland. Entities that do not declare the beneficial owner could face restrictions on selling property or up to five years in prison.

08 Nov 2021
Economic Crime Levy should consider existing MLR costs

Plans have been announced to introduce a new levy in order to raise £100 million per year from the anti-money laundering regulated sector to help fund reforms outlined in the 2019 Economic Crime Plan.

Unexplained Wealth Orders

The legislation also makes it easier for Unexplained Wealth Orders (UWOs) to be issued by authorities, which means that properties may be seized without having to prove to a legal standard that they were gained through criminal activity. 

The announcement comes as the UK Government, alongside the US and European Union, have imposed sanctions on Russia and its supporters in response to the invasion of Ukraine. The package of sanctions is the strongest that England has ever inflicted on Russia and aims to ensure that Russia will suffer financially.

Money Laundering Regulations

Propertymark has long supported proposals for transparency of ownership through a public register to go hand in hand with Money Laundering Regulations, to avoid criminal funds being concealed, and has made suggestions to the UK Government on how this could best be implemented.

Propertymark called on the UK Government to introduce a public register of overseas entities owning property in the UK back in 2018 and it is high time that legislation has been brought forward.

Despite repeated promises, including being mentioned in the December 2019 Queen’s Speech, the UK Government failed to deliver. However recent events serve as a reminder that property is a high-risk sector for money laundering because any foreign company can buy property in the UK without having a presence in the country. Criminal funds can be concealed and made to look legitimate through an untraceable ‘company’ and subsequently the purchasing of property. When agents try to determine the true, or ‘beneficial’ owners, they find only documents listing shell companies. 

To maintain integrity in our housing market it is vital to know who the ultimate owner of a property is and it is imperative that the register is set up as soon as possible. The longer we wait for the register, the longer corrupt individuals will be able to use the UK property market to hide their wealth.

Timothy Douglas Head of Policy and Campaigns | Propertymark