Crackdown on ‘middlemen’ serving Russian oligarchs: Lifestyle and concierge firms that work for wealthy foreign property clients could be shut down under new law, experts say
Scores of lifestyle and concierge firms catering for oligarchs and wealthy property clients are facing a crime blitz, experts have warned.
The Government’s proposed Economic Crime Bill will crack down on foreign buyers of UK property with a register of beneficial ownership dating back 20 years.
Russian oligarchs and other foreign buyers have so far been able to buy expensive properties in Britain while hiding ownership with a web of complex shell companies.
It is estimated by Transparency International that £1.5billion of property in London has been bought by Russians accused of corruption or with links to the Kremlin.
The Government’s proposed Economic Crime Bill will crack down on foreign buyers of UK property with a register of beneficial ownership dating back 20 years. Many Russian buyers have bought properties Belgrave Square, pictured, in recent years
Many of the property deals are arranged by middlemen who operate illegally to take a commission from clients while turning a blind eye to current anti-money laundering laws, industry experts have told The Mail on Sunday.
Around 200 firms, including lifestyle and concierge companies, family offices and illegal property brokers are facing a crackdown once the new law is introduced.
The firms are said to largely operate in London and the surrounding area but have failed to legally register as estate agents under the government-backed insurance schemes.
Jonathan Hopper, director on the board of the Property Ombudsman and CEO of Garrington property finders, said of the new bill: ‘There has been a focus on property agents and advisers for many years and it’s going to make sure they double down on compliance and treat everything they need to do very seriously.
‘It’s a small minority that fly under the radar and cause these problems.
‘Those that have been doing this as an additional lucrative revenue stream are going to come under quite a bit of scrutiny, they’ll either get their house in order or shut down very quickly.
Pictured, One Hyde Park in Knightsbridge, London, which at one point was the home of wealthy Russian businessmen Vladislav Doronin and Rinat Akhmetov. Many of the property deals are arranged by middlemen who operate illegally to take a commission from clients while turning a blind eye to current anti-money laundering laws
‘London has always been attractive to a lot of international buyers because it’s been seen as a safe harbour to put wealth into and property in of itself has been seen as a stable asset class.’
Timothy Douglas, of property agents’ trade body Property Mark, said: ‘A key element of the bill is the overseas register and their beneficial owners and that will be about maintaining integrity in the housing market by allowing agents to check who the buyers are.’
The Economic Crime Bill, first promised in 2016, was controversially shelved last month but revived following the outcry over the invasion of Ukraine.
The bill will also overhaul Unexplained Wealth Orders, allowing authorities to target those managing properties on behalf of rich individuals and protecting the government from crippling legal costs.
Around 200 firms, including lifestyle and concierge companies, family offices and illegal property brokers are facing a crackdown once the new law is introduced. Street signs for Chesham Place and Belgrave Square sit outside residential homes in London, where Russian oligarchs have properties
The National Crime Agency (NCA) estimates around £100billion of illicit finance is channelled through the UK each year.
But critics have warned the bill contains ambiguities which could allow wealthy individuals to still hide their identities with nominee agreements.
James Munro, of the National Trading Standards estate agency team, said: ‘If agents are not members of an approved redress scheme, they risk heavy fines or potentially prohibition orders, which would prevent them from engaging in estate agency work.’
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