More than 35,000 London properties currently have unknown offshore owners.
Curious sightseers have been flocking for tickets on a “kleptocracy tour” of London after a recent spate of publicity, hoping for a glimpse into the murky world of Russian oligarchs in the capital.
But providing an insight into the lifestyles of the super-rich was never our purpose.
Rather, the tour was designed to expose how billionaires from countries such as Russia, Ukraine and Kazakhstan have been allowed to buy London property with shady money and operate freely in our capital.
Mega-rich homes tour puts spotlight on London's oligarchs. More than 35,000 London properties have offshore owners, with no one knowing who they belong to or where the money came from.
During a tour of the most opulent of these our “guides”, all prominent investigative journalists and money-laundering experts, explain the role of the so-called enablers – bankers, lawyers, agents – who facilitate the transactions and describe how dirty money has flooded our bricks and mortar.
Running a guided tour of London wasn’t the first choice of anti-corruption campaigners such as myself. The idea arose after our campaign for greater transparency of property ownership ran into a stone wall of government inaction.
On board the kleptocracy tour bus in February.
ClampK.org, the Committee for Legislation Against Money Laundering in Properties by Kleptocrats, was formed after my documentary, From Russia With Cash, was broadcast on Channel 4 last July. Sixteen major anti-corruption NGOs soon joined the initiative.
Kyiv -London Frome Ukraine with Cash
Less than three weeks later David Cameron announced that he was aware of the dirty money pouring into the capital, and vowed to fight it. But months have gone by without any progress by the government.
There are currently 36,342 offshore owned properties in London, and we don’t know who owns them
We needed to find a way to raise the problem of questionable cash coming into our city, much of it linked to money laundering operations thought to total billions of pounds a year.
But we couldn’t rely on the media because of the threat of legal battles. Despite the fact that our journalists used mostly public sources in their investigations, publishers are wary of reprinting accusations of potentially illegal sources of wealth.
Journalists need hard proof of ownership, yet the offshore companies these homes are registered to make it nearly impossible to figure out who they actually belong to.
succinct summary what is kleptocracy
Many also have so-called “nominee shareholders” acting on behalf of the real owners. Ownership can only be established if someone gets hold of the nominee agreement, but these papers are guarded away and treated as top secret.
There are currently 36,342 offshore-owned properties in London. In Westminster alone, we don’t know who owns one out of 10 properties. Not because we are rubbish investigators – rather the system of offshore corporate vehicles is designed for this purpose, so that the real proprietor cannot be traced.
This is exactly why criminals all over the world use offshore companies to hide the origin of their funds. The ease with which this can be done has turned many London properties into the reserve currency of international crime.
For example, Deutsche Bank research has shown that illegal capital flowing from Russia in the tens of billions of pounds a year has had a direct influence on the rise in property prices in London.
Inaction
Call to tighten UK's new property law to crack down on ‘dirty money’
The government has done very little to bring transparency. Under pressure from the media, they admitted to the existence of the problem and the need to subject offshore companies which own real estate assets in the UK to the same regulations as any domestic company: requiring them to disclose ownership. But sadly, the matter hasn’t progressed any further.
The lack of action from Number 10 is even more surprising given the Global Anti-Corruption Summit opening in London in May.
Crime, Kleptocracy, and Politics: Developments in Modern Russia
The government has had almost a year since we started campaigning to start a legislative reform process which could have resulted in a draft bill in time for the summit. Cameron could have shown how Britain is championing the global fight against corruption – but he has squandered the opportunity.
So it’s left to us, and projects like the Kleptocracy Tours, to try to jump-start the process of cleaning up offshore home ownership in London.
The next Kleptocracy Tour of London takes place on 12 April
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