As part of a new assault on money laundering, oligarch mansions purchased with “dirty money” in the richest areas of London may be confiscated and converted into affordable housing.
If it discovers that houses in neighbourhoods like Belgravia, Knightsbridge, and Mayfair have been purchased with ill-gotten gains or “money of a doubtful provenance,” Westminster City Council is considering using compulsory purchase orders.
According to Transparency International, Russians suspected of wrongdoing or having ties to the Kremlin have purchased homes in Westminster valued at about £430 million since 2016. More than any other British council area, this.
The number of properties registered to owners in Jersey has increased by 300% since 2010, whereas the number of properties registered to owners in Russia has increased by 1,200% since 2010.
After the owner fell behind on their council tax, the Labour-run council is now considering using a compulsory purchase order against a home registered in the Seychelles, according to the Guardian.
However, the authority confronts significant challenges, such as a lack of transparency about property ownership and insufficient oversight of corporations that are listed at Companies House.
Westminster said it was comparing homes held abroad with council tax data to see if they were being utilised for their claimed purposes. Westminster now has a waiting list for affordable housing of 4,000 people.
According to the council, “dirty money” is defined as money earned by illegal activity, bribery, or the improper use of public funds, and “money of doubtful provenance” is often linked to the use of tax havens or sophisticated shell firms.
“Westminster’s dirty secret has been known for many years,” said the council’s leader, Cllr. Adam Hug, “but those in authority turned the other way for far too long while money of dubious provenance flooded into London and investors took advantage of our comparatively lenient rules.”
“It took the crisis in Ukraine to bring oligarch investments and London’s transformation as a European laundry for filthy money back into the spotlight.”
However, the issue extends beyond Putin and his goons to a large number of people who see Belgravia, Knightsbridge, Mayfair, and other areas of Westminster as locations to launder their cash.
“This not only harms our city’s image by promoting authoritarianism overseas, but it also depletes the vibrancy of neighbourhoods with vacant or underused properties.”
Cllr. Hug is urging the government to adopt a number of measures, such as strengthening checks on property owners, to make it simpler to crack down on money laundering.
According to him, “Businesses House does not have the authority or resources to confront people who set up shady shell companies to launder and export money from London.”
“Getting a local government loan card requires more background checks than forming a business in the UK,” said the author.
“We want to collaborate with government ministers and agencies to clamp down on dirty money and make sure that organisations like HMRC and the National Crime Agency are adequately resourced,” the group said.
His other suggestions include implementing stricter identification checks and raising the registration price for businesses at Companies House from £12 to £50.
The suspected business rates avoidance by US-style confectionery shops and tourist shops on Oxford Street was the subject of a raid by Westminster, according to a report in MailOnline earlier this year.
A total of 30 shops are presently being looked for for evading corporate taxes totaling around £8 million.
The use of opaque shell business structures to prevent identifying the real owners and thwart efforts by the council to prosecute offenders has been a recurring theme in these investigations.