Area more than three times the size of Greater London owned in UK by secret companies in offshore tax havens

From Global Witness (no further comment from us is needed):

Area more than three times the size of Greater London owned by secret companies in offshore tax havens

An area of British land more than three times the size of Greater London is owned by secret companies in offshore jurisdictions like the British Virgin Islands,  Global Witness revealed today based on data from Private Eye (1).

The veil of secrecy makes it impossible to identify who actually owns this land and whether it was bought with clean money. This leaves the UK’s housing market wide open to abuse by corrupt politicians, tax evaders, money launderers and other criminals. The findings come as the effectiveness of the UK government’s proposals to crack down on tax haven secrecy in the wake of the “Panama Papers” are being questioned. 

“If the owners of property in the UK are hidden behind secret companies registered offshore, it’s impossible to know who they are and where they got their money.  We don’t want dictators, tax evaders and other criminals using our property market and banks to stash their loot and launder their cash – it’s bad for our economy, it’s bad for our security and it’s bad for our house prices,” said Chido Dunn of Global Witness.

The value of UK property owned offshore is estimated to be over £170 billion, and much of it is owned through companies in UK tax havens. Last year Global Witness revealed that big chunks of Baker Street are owned through offshore companies by a mysterious figure with close ties to a former Kazakh secret police chief accused of murder and money-laundering. Following this, the Prime Minister announced that he would consult on ways to make the UK’s property market more transparent to stop the dirty money from pouring in.

Global Witness is calling for the UK government to announce concrete measures at the UK’s Anti-Corruption Summit on 12 May that will:

• Create a public register of beneficial ownership for foreign companies
• that purchase land or property in England and Wales;
• Ensure that this register encompasses properties currently owned by foreign companies (estimated at £170bn worth), along with new purchases; and
• Ensure that this register is properly implemented and enforced.

While the government has shown leadership by putting these issues on the agenda, the proof will be in the implementation of any measures announced at the summit.

The Panama Papers have also revealed the role that UK-linked tax havens, such as the British Virgin Islands, play in facilitating corruption and money laundering. Over half of the anonymously owned companies listed in the Panama Papers were set up in the UK’s tax havens, or “Overseas Territories.”  The UK has the power to address one of the root causes of offshore secrecy by requiring the Overseas Territories to create public registers of the real owners of companies registered there, as is happening in UK itself. This would make it much harder for the world’s criminal and corrupt to hide their money there, and mark a huge step towards the global standard of transparency that UK Prime Minister David Cameron has said he wants to see.  

The Prime Minister has said that he want to see the Overseas Territories create full public registries of company owners. But so far, they have only agreed to set up private registries which are accessible to UK law enforcement. Given the scale of the criminality revealed by the Panama Papers and previous work by Global Witness, UK law enforcement won’t have the resources to stem the tide of suspect funds. To deter those with something to hide, this information needs to be available to a much wider pool of people, including civil society, journalists and the public.

“If we want to break our links to terror financing, dodgy dictators and other criminals we have to address the role the UK’s Overseas Territories play by creating public registries of company owners, like we’re getting in the UK.  The measures announced so far, such as private registers, won’t cut it. As things stand it will be a question of when, not if, the next great corruption scandal hits the UK tax havens.” 

ENDS.

Contacts: Oliver Courtney +44 7912 517147 

Notes:

1. A database of Land Registry documents leaked to Private Eye Magazine and shared with Global Witness revealed that 1.2 million acres of land in the UK is owned offshore. This area is over three times the size of Greater London, which measures 607 square miles, or 388,480 acres.