1. Robert Barrington, Executive Director, Transparency International UK
Corruption & the London property market
TI Norway, Oslo
June
Robert Barrington, Executive Director, Transparency International UK

2. About TI-UK 45 staff UK focus on Global programmes on Corrupt capital
Corruption in politics
Business integrity
Anything the media throw at us (Aid, football, Russia, Trump, etc)
Global programmes on
Defence & Security
Pharmaceuticals & Healthcare

4. Corrupt capital The global corruption footprint of the UK
Foreign bribe-paying
Corrupt capital
Acting as a safe have for the proceeds of corruption
City of London
Overseas Territories
Crown Dependencies

5. What is the size of the problem?
£100 billion + laundered via UK each year
[source: National Crime Agency]
How much is of corrupt origin?
How much flows into London/UK property?

6. What is the impact of the problem?

7. Key findings [source: Faulty Towers, TI-UK, 2017]
The London property market is highly vulnerable to corrupt wealth flowing into it.
Analysis of open source material found over £4.2 billion worth of properties bought with suspicious wealth – around 150 properties.
House prices are affected as illicit wealth and crisis capital entering the UK increase demand in the London housing market, particularly at the top-end; “the ripple effects they generate resonate across London”
New build developments are built targeting wealthy international investors and are not meeting demand for affordable homes.
In 14 landmark London developments almost 40 per cent of future homes were bought by those from high corruption risk jurisdictions.

8. Key findings [source: Faulty Towers, TI-UK, 2017]
London’s role as a global safe haven is resulting in an underuse of housing stock.
Areas with higher levels of property owned by anonymous companies also have high levels of abnormally low electricity usage; an indicator for empty or underused homes.
Young people are moving out of London in record numbers due to the cost of housing.
Over half of Londoners responding to our survey said wealthy overseas investors are causing house prices to rise and more than 1 in 5 believed money laundering was a motivating factor for overseas investment.

9. Case study: Russia Igor Shuvalov, First Deputy Prime Minister
Declared assets (including wife) £634,000
Declared annual income £112,000
Allegedly owns London property worth £11.44 million

10. Some obvious loopholes – Companies House
Just twenty people at Companies House police around four million firms’ compliance with company law, without proactive checks made on the accuracy of the information submitted.
4,000 beneficial owners in the Persons of Significant Control (PSC) register are listed under the age of two, and five beneficial owners control more than 6,000 companies – raising the question of whether some of these individuals are nominees.
40 per cent of incorporations last year were done directly through Companies House, which does not undertake background checks on customers.
766 UK corporate vehicles alleged to have been used in 52 large scale corruption and money laundering cases amounting to £80 billion. A quarter of these companies are still active.

11. What can be done about it - 1
Technical fixes
Beneficial ownership transparency
Professional enablers
Close loopholes – eg Crown Dependencies, AML supervision
Proper enforcement

12. What can be done about it - 2
Fundamental reforms for:
Prevent money being stolen
Enable it to be tracked
Facilitate asset freezing and recovery
Punishment of individuals not just removal of assets

13. Some steps forward Unexplained Wealth Orders
UK Beneficial Ownership Transparency
Overseas Territories transparency
Narrative link to national security
UK Anti-Corruption Strategy

14. Possible roadblocks Brexit Uncooperative jurisdictions
Lack of global leadership
Crackdown on civil society

15. causes for optimism Improved political understanding Public anger
Transparency revolution
open government
social media
Growing evidence base
Cooperation across jurisdictions

16. www.transparency.org.uk - www.transparency.org
Robert Barrington -
transparency.org.uk