A first-of-its-kind register, designed to root out corrupt
oligarchs and elites attempting to hide ill-gotten gains through
UK property, has come into force today.
The Register of Overseas Entities will require anonymous foreign
companies owning or seeking to buy UK land to reveal their true
owners, ensuring criminals cannot hide behind secretive chains of
shell companies.
The reforms will support government efforts to root out Russian
oligarchs and kleptocrats using UK land to hide illicit wealth.
From today, any foreign company wishing to buy UK property will
have to identify its beneficial owner and present verified
information to Companies House before any application to the UK’s
land registries can be made. Those overseas entities that already
own land in the UK that is in scope will have a 6-month
transitional period, starting today, to register their beneficial
owners or managing officers.
To ensure criminals are targeted effectively, the register
applies retrospectively to property bought since January 1999 in
England and Wales, and since December 2014 in Scotland. Those
foreign companies that do not comply with the new obligations
could face severe criminal sanctions, including fines of up to
£2,500 per day or a prison sentence of up to 5 years.
Business Minister said:
We have been clear that the UK is a place for legitimate business
only, and to ensure we are free of corrupt elites with suspicious
wealth, we need to know who owns what.
By getting this first of its kind register up and running at
breakneck speed, we are lifting the curtain and cracking down on
those criminals attempting to hide their illicitly obtained
wealth.
In addition, anti-avoidance measures mean that any overseas
entity that has disposed of property since 28 February 2022 –
when the legislation to create the register was first announced –
will be required to provide a statement to Companies House.
Companies House Chief Executive Louise
Smyth said:
The launch of this new register is a significant milestone in the
history of Companies House and marks a turning point in our
transformation as we look to play a much greater role in tackling
economic crime. We have worked at great pace with colleagues and
stakeholders across government and beyond to make this possible,
and we remain committed to supporting these partners as the
register is implemented.
The register was announced as part of the Economic Crime
(Transparency and Enforcement) Bill in February 2022, as part of
the UK’s immediate response to Russia’s invasion of Ukraine.
Since Royal Assent, the government has worked rapidly alongside
Companies House and the UK’s 3 land registries to get the
register up and running.
It forms part of a wider package of legislative proposals to
tackle illicit finance and bolster the powers of Companies House,
set out in February, and which will be introduced in Parliament
over the coming months. Proposals include requiring anyone
setting up, running, owning or controlling a company in the UK to
verify their identity with Companies House, as well as giving
Companies House the power to challenge information that appears
suspicious.
Further quotes
Kathryn Westmore, Senior Research Fellow, RUSI:
The launch of the ROE is an important and welcome step forward in
the UK’s fight against dirty money. The increased transparency
that it will bring should help to make the UK’s property market a
much less appealing destination for stolen and corrupt wealth.
Rebecca Lee, Chief Impact Officer,
OpenCorporates:
The ability to hide and spend suspect funds overseas is a large
part of what makes serious corruption and organised crime
possible. OpenCorporates welcomes the launch of this register as
a significant step for corporate transparency and a deterrent to
the use of UK property for laundering the proceeds of crime.
Importantly, the Register of Overseas Entities will be openly
accessible to all – allowing everyone to shine a light on its
contents.
Rachel Davies Teka, Advocacy Director, Transparency
International:
Transparency over the property sector is vital to help tackle
criminals and the corrupt using Britain as a haven for their
dirty money. This register should help start to lift the veil of
secrecy over offshore companies that own real estate in the UK -
a loophole that has been exploited by oligarchs and kleptocrats
for too long.
Spokesperson for Spotlight on Corruption:
The launch of the overseas register is a crucial first step
toward clamping down on those criminals who have been able to
launder their wealth through the UK’s property market. If
implemented properly and penalties for non-compliance are
properly enforced, the register could be the world’s most
transparent and accurate source of information on foreign
ownership of property. We look forward to working with Companies
House to help make the register the gold standard for other
countries to follow.
