Nick Shaxson ■ Scottish Government announces historic law to end secrecy of land ownership
This topic has been building slowly in some countries, whose economies are blighted by the fact that large tracts of real estate are owned by anonymous entities and arrangements, typically linked to tax havens. We’d highlight Private Eye’s searchable database of offshore-owned properties in the UK — and in this particular case the indefatigable Scottish land and transparency campaigner Andy Wightman. His latest blog begins like this:
“Mr Richard Scott (sometimes referred to as the Duke of Buccleuch) is frequently cited as the owner of the largest extent of private land in the United Kingdom. Yet, this has never been entirely accurate. The 242,000 acres of land in Scotland is owned not by Mr Scott, but mainly by a company called Buccleuch Estates Ltd.
Anderson Strathern Nominees Ltd. is a dormant company which is wholly owned by Anderson Strathern Asset Management Ltd. Anderson Strathern Asset Management Ltd. is wholly owned by Anderson Strathern LLP which, in turn is owned by the 53 partners in the law firm.
MS Estates Ltd. is wholly owned by Anderson Strathern Nominees Ltd. though the Directors include Mr Scott and other family members
Anderson Strathern Nominees Ltd. is ….. (but you know this).
So the ultimate owner of Buccluech Estates Ltd are 53 solicitors?
Well, not quite. Because what the Nominees do is to act on behalf of persons unknown on their behalf. These persons are likely to be members of the Scott family but we can’t know because the arrangements are not made public.”
Now read on. Getting to our headline, we post a press release from Global Witness, just received via e-mail. They cite a few examples of large estates in Scotland registered anonymously off-shore: for instance the 71,000 acre Glenavon and Braulen Estates, registered in Jersey and the Cayman Islands; the 10,000 acre Cluny Estate registered in Jersey the 56,000 acre Loch Ericht Estate, registered anonymously in Panama and Guernsey. Their press release reads:
The Scottish Government today introduced ground-breaking new measures to bring land ownership into the open, in a move strongly welcomed by Global Witness. These efforts will make it much easier for people in Scotland to know who is really behind ownership of land and hold those people to account.
A small number of individuals control of vast tracts of Scotland’s land and have been able to hide their identities behind anonymously owned shell companies. Today 432 land owner’s account for half of all Scotland’s privately owned land, 750,000 acres of which is owned by companies registered in secrecy jurisdictions. The anonymity of who is truly behind land ownership has meant there is little scrutiny of decisions over how land is used, or who benefits from those decisions, leaving families who live on the land open to exploitation by unscrupulous landlords.
Today’s announcement is designed to reverse that trend by creating a publicly accessible register of the real owners of land. Robust transparency measures have been called for by political parties across the Scottish Parliament and Police Scotland, as well as gaining significant public support. The register, introduced through the Land Reform (Scotland) Bill achieves the Government’s objectives of improving transparency in land ownership in Scotland: “As a matter of public policy it is of fundamental importance to know who owns land, who has the power to make decisions on how the land is managed and who is benefitting from the land”.
“This is a major step towards a fairer and more open model of land ownership, shining a light on those controlling some of Scotland’s most opaque corporate entities” said Megan MacInnes, Land Advisor with Global Witness. “As a result, thousands of people across Scotland will now be able to know who they are dealing with, and hold them accountable for their decisions”.
The current anonymity prevents local communities living on or affected by land from contacting the true owner (rather than an anonymous shell company) if they have a problem, and prevents law enforcement agencies from investigating crimes. Despite having won the right to roam, Scotland’s citizens don’t have the right to know who truly controls and makes decisions about the land they are walking on.
This historic move comes as momentum is gathering globally behind efforts to bring the real owners of land and property into the open. In July 2015, UK Prime Minister David Cameron announced that he would consult on similar measures to stop anonymous company owners from buying property in England and Wales. This builds on broader ownership transparency measures for all UK companies that will come into force at the end of this June.
Scotland’s public register, which will be introduced through regulations approved by the next Parliament, will contain the names and contact details of those who control or influence the legal entities owning land. Importantly, the regulation is expected to cover not just companies, but other more shadowy corporate entities, for example Scottish Limited Partnerships and other structures, which people use hide their control over land, including those registered off-shore. The focus on effective enforcement and sanctions, if this registration requirement is not met, is also welcomed.
However, it is critical that the regulations introduced are not watered down through the introduction of loopholes and exemptions. There must, for example, be a clear definition of what is meant by someone who has a ‘controlling interest’ in a legal entity owning land.”
Indonesia launches investigation following ‘Macao Money Machine’ report
October 2021 Spanish language podcast, Justicia ImPositiva: Los Pandora Papers, el Bitcoin en El Salvador y crisis de la inmobiliaria en China #64
Pandora Papers shows transparency failure is an accountability failure
Tax Justice Network Portuguese podcast #29: Fim à tributação que penaliza os mais pobres
Isle of Man banking data leak reveals how sharing data can identify offshore strategies and improve beneficial ownership
Isle of Man banking leak: Analysing banking data to reveal offshore strategies
29 September 2021