The law's proponents say a public register will bring accountability to the opaque world of offshore finance
UK lawmakers criticized proposed anti-money laundering legislation, saying the bill doesn’t do enough to force foreign owners to disclose their property holdings in Britain.
The lawmakers, from a cross-party committee of 12 members from the House of Commons and the House of Lords, said the legislation had loopholes that would allow foreign buyers to use trusts to avoid registering transactions. The committee also said the bill fails to set up an adequate system to verify and enforce the accuracy of property-owners’ filings.
The proposal is considered an important step in Prime Minister Theresa May’s push to prevent criminals and corrupt foreign officials from laundering money through the UK In 2018, suspicious offshore shell companies and similar entities parked more than 4 billion pounds ($5.1 billion) of real estate in London and other British regions, according to Transparency International, an anti-corruption group.
"There is nothing fundamentally wrong with the bill but we want to tighten it," Edward Faulks, the Conservative chairman of the joint committee, said in an interview. "It is very important that we make it as difficult as possible for criminals to use U.K. property as a vehicle for money laundering."
A cross-party committee formed of 12 members from both the House of Commons and the House of Lords said Monday that the measure may fail to meet its objectives if lawmakers don’t address its key weaknesses.
In an 86-page report, the panel said foreign buyers could use trusts to avoid registering their holdings because such structures wouldn’t be categorised as “overseas entities” under the law.
The committee also said the proposal should direct foreign owners to disclose upcoming deals to “capture information at the point where most money laundering occurs.
The government is expected to introduce the bill later this year. It will also cover property-owners in the British Virgin Islands, the Channel Islands, and other British overseas territories.
But while the lawmakers say the bill needs work, industry groups say that it violates basic privacy rights.
The Institute for Chartered Accountants in England and Wales questions making the registers accessible to the public. And the International Financial Centres Forum, an organization comprising lawyers, agents, and other professionals in British overseas domains, said the bill impinges on the rights of wealthy landowners to protect their privacy and security.
But the law’s proponents say a public register will bring accountability to the opaque world of offshore finance. There have been more than 2 billion data searches on a similar register already in place for UK-based companies.
“For the first time we could find out who really owns this country," said Ava Lee, a senior campaigner at Global Witness, a London-based anti-corruption group. "Now the government needs to step up and show the U.K. is no longer rolling out the red carpet for criminals."