News

Prime Minister vows to stem flow of ‘dirty money’ into London’s luxury property market

Saadi Gaddafi will have trouble buying another £10m luxury mansion in Hampstead through a faceless British Virgin Island shell company if reforms announced today by UK Prime Minister David Cameron have their desired effect.

"There is no place for dirty money in Britain," Cameron is expected to say in a speech in Singapore during a four-day visit to south-east Asia.

In a move welcomed by anti-corruption body Transparency International (TI), Cameron will promise to introduce a central public land registry of foreign companies, setting out which land they own.

He’ll say the government will also consult on whether to expand the new property register setting out the true owners of UK companies so that it would cover overseas-registered firms with a government contract.

According to TI, the UK’s connections with secrecy havens like the British Virgin Islands (BVI) make Britain very attractive for the world’s corrupt and criminal elites.

There should be no place for dirty money anywhere. That’s my message to foreign fraudsters: London is not a place to stash your dodgy cash– David Cameron, UK Prime Minister

TI research shows that 75% of UK properties under investigation for corruption are registered with offshore companies. In places like the BVI, details about company shareholders are not collected, making it nearly impossible to discover who hides behind them.

TI also found that 36,342 London properties – comprising an area equal to 2.25 sq miles – are held by offshore haven companies. Of these, 38% in the British Virgin Islands, 16% in Jersey, 9.5% in Isle of Man, and 9% in Guernsey. 

Almost one in 10 properties in the City of Westminster (9.3%) are owned by companies registered in an offshore secrecy jurisdiction. For Kensington & Chelsea the figure is 7.3% and for the City of London it’s 4.5%.

TI highlights the example of Saadi Gaddafi, son of the late Libyan dictator, buying his Hampstead mansion with £10m of Libyan state money via a BVI company called Capitana Seas Ltd.. 

"I want Britain to be the most open country in the world for investment," Cameron will say according to a prepared speech.

"But I want to ensure that all this money is clean money. There is no place for dirty money in Britain.

"Indeed, there should be no place for dirty money anywhere. That’s my message to foreign fraudsters: London is not a place to stash your dodgy cash."

The Primer Minister indicated that he would put fresh pressure on Britain’s offshore tax havens to increase transparency around company ownership.

"To really tackle corruption effectively, we need to be able to trace data from one country to another. We don’t want criminals to be able to go unnoticed, just because they move money across borders or have assets in different countries," he will say.

TI welcomed the commitment.

"With this announcement, the UK Government is taking significant steps towards tackling the scourge of corrupt money that is stolen from around the world and laundered into the UK through secret companies," said Nick Maxwell, TI UK’s head of advocacy and research.

"The PM has rightly identified the secrecy behind company ownership as a simple tool for money launderers. An end to secret offshore company in ownership of UK property and in UK procurement can help shift the UK from being a safe-haven for illicit wealth to a place where dirty money is not welcome."

  • A TI infographic exploring the issue is here.

Photograph: Almost one in 10 properties in the City of Westminster (9.3%) are owned by companies registered in an offshore secrecy jurisdiction, says Transparency International (Stefan Oemisch/Wikimedia Commons)

Story for GCR? Get in touch via email: [email protected]

Latest articles in News