Secret buyers of luxury properties in Britain face jail in new crackdown

LONDON: Frontmen who help wealthy investors from Russia and other states use foreign shell companies to hide the ownership of luxury London properties face up to two years in jail and unlimited fines, Britain’s government said on Thursday.

The punishments will be included in draft laws to be passed in the summer that will compel foreign companies which own or buy property to disclose their ultimate owners in a bid to crack down on money-laundering.

Investors from Russia, China and the Middle East have poured billions into London, buying everything from luxury properties to entire companies, but the origin of some of those funds has been questioned by transparency campaigners.

London property especially has attracted foreign buyers thanks to its mix of top-end apartments, luxury penthouses and gleaming skyscrapers alongside corporations who use the city as global hub.

Although the new laws are not specifically directed at Russia, the British capital has been dubbed “Londongrad” due to the large amounts of Russian money that have poured in since the collapse of the Soviet Union in 1991.

Some British lawmakers have urged Prime Minister Theresa May to freeze the private assets of senior members in Russian President Vladimir Putin’s circle in retaliation for the poisoning of a former double agent in England two weeks ago.

“The UK is taking a leading role in the global fight against corruption, including cracking down on the use of shell companies to launder dirty money by buying up some of London’s prime real estate,” Andrew Griffiths, a junior business minister said in a statement.

“Our public register will ensure we know who owns UK property wherever they are from and will help authorities come down hard on frontmen seeking to conceal their paymasters’ true identities.”

More than 180 million pounds($254 million) worth of property in Britain has been brought under criminal investigation as the suspected proceeds of corruption since 2004, and more than 75 percent of properties currently under investigation use off-shore corporate secrecy, the statement said.

It is unclear how much money is laundered through Britain, but the National Crime Agency has said calculations of between 36 billion pounds and 90 billion pounds are “a significant underestimate”.