Repression against “intermediaries” and concierge companies serving the Russian oligarchs
Crackdown on ‘middlemen’ serving Russian oligarchs: Lifestyle and concierge firms that work for wealthy foreign real estate clients could be shut down under new law, experts say
Dozens of lifestyle and concierge businesses catering to oligarchs and wealthy real estate clients are facing a blitz attack, experts have warned.
The Government’s proposed Economic Crimes Bill will crack down on overseas buyers of UK property with a 20-year-old beneficial ownership register.
Russian oligarchs and other foreign buyers have so far been able to buy expensive properties in Britain while hiding ownership with a network of complex shell companies.
Transparency International estimates that £1.5bn of real estate in London has been bought by Russians accused of corruption or with links to the Kremlin.
The Government’s proposed Economic Crimes Bill will crack down on overseas buyers of UK property with a 20-year-old beneficial ownership register. Many Russian buyers have purchased Belgrave Square properties, pictured, in recent years
Many property deals are arranged by intermediaries who operate illegally to take a commission from clients while turning a blind eye to current anti-money laundering laws, industry experts told the Mail on Sunday.
Around 200 businesses, including lifestyle and janitorial companies, family offices and illegal real estate brokers, face a crackdown once the new law is introduced.
The firms are said to operate largely in and around London but have failed to register legally as estate agents under government-backed insurance schemes.
Jonathan Hopper, director of the Property Ombudsman’s board and CEO of Garrington property finders, said of the new bill: ‘The focus has been on estate agents and advisers for many years and that will s ensure they double down on compliance and treat everything they need to do very seriously.
“It’s a small minority that flies under the radar and causes these problems.
“Those who have done this as an extra lucrative source of income are going to come under intense scrutiny, they will either get their house in order or close very quickly.
Pictured is One Hyde Park in Knightsbridge, London, which was at one time the home of wealthy Russian businessmen Vladislav Doronin and Rinat Akhmetov. Many real estate transactions are organized by intermediaries who operate illegally to take a commission from clients while turning a blind eye to the anti-money laundering laws in force.
“London has always been attractive to many international buyers as it has been seen as a safe haven to invest in and property itself has been seen as a stable asset class.”
Timothy Douglas, of estate agents trade body Property Mark, said: ‘A key part of the bill is the foreign registry and their beneficial owners and it will be about maintaining the integrity of the housing market by allowing agents to verify who the buyers are. ‘
The economic crime bill, first promised in 2016, was controversial last month but was revived following outcry over the invasion of Ukraine.
The bill will also overhaul unexplained wealth ordinances, allowing authorities to target those managing properties on behalf of wealthy individuals and protecting the government from crippling legal fees.
Around 200 businesses, including lifestyle and janitorial companies, family offices and illegal real estate brokers, face a crackdown once the new law is introduced. Street signs for Chesham Place and Belgrave Square hang outside residential homes in London, where Russian oligarchs have properties
The National Crime Agency (NCA) estimates that around £100 billion of illicit finance passes through the UK each year.
But critics have warned that the bill contains ambiguities that could allow wealthy individuals to further hide their identities with appointment deals.
James Munro, of the National Trading Standards estate agency team, said: “If agents are not members of an approved recourse scheme, they risk hefty fines or possibly restraining orders, which prevent them from engaging in estate agency work.”
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