LONDON (Reuters) – British property can still be held through opaque trusts, despite efforts to shine a light on the real owners in a crackdown on Russian oligarchs and corrupt elites laundering illicit wealth, lawmakers said on Wednesday.
In an Economic Crime Manifesto, parliamentarians from across the political divide, who are members of parliamentary groups on anti-corruption and fair business banking, called for loopholes in the new Register of Overseas Entities to be closed.
The register, introduced as part of the 2022 Economic Crime Act, is designed to stop foreign criminals using Britain as a haven to launder, hide and spend funds in the wake of Russia’s invasion of Ukraine that year.
“Unfortunately, design flaws limit the effectiveness of the register and continue to enable anonymous ownership of property in Britain through opaque trusts,” the lawmaker groups said. They called on the next parliament, following a general election this year, to continue to try and turn the tide on dirty money.
The government has consulted on the transparency of land ownership when trusts are involved and is currently considering the responses.
Lawmakers also pointed out that the effectiveness of Companies House, Britain’s public corporate register, was inhibited by a decision to outsource identity verification to corporate service providers without ensuring they were independently and adequately regulated and supervised.
Companies House has been granted greater powers to query information and request supporting evidence, identify directors and beneficiaries of companies and share data with other government departments and enforcement agencies.
The cost of creating a company has also increased to 50 pounds ($62.25) from 12 pounds – although costs remain far below the EU average of 300 euros ($319.20).
“Although there has been progress, we still have a long way to go before the UK can stem the flow of dirty money, halt our unwitting enabling of kleptocratic regimes and reclaim our reputation as a trusted jurisdiction,” the lawmakers said.
($1 = 0.9398 euro)
($1 = 0.8032 pound)
(Reporting by Kirstin Ridley; editing by Jonathan Oatis)