The government’s long-delayed register of offshore owners of UK property will fail to tackle corruption unless multiple loopholes in the draft legislation are closed, experts have warned.
On Monday, the government announced it would introduce a “register of overseas entities” requiring anonymous foreign owners of UK property to publicly declare their true identities as part of its draft Economic Crime (Transparency and Enforcement) bill.
The legislation would require any overseas owner of a UK property, including an owner hiding behind secrecy devices such as shell companies, trusts or foundations, to disclose their identity to Companies House.
It would apply to any property in England and Wales bought by an overseas company within the past 20 years. Failure to comply with the register would be punished with a prison sentence of up to five years, or daily fines of up to £500.
Experts warned that the draft bill’s apparently feeble enforcement measures and seemingly endless delays to implementation would severely hamstring its effectiveness.
Steve Goodrich, head of research and investigations at the anti-corruption group Transparency International UK, said the bill’s proposed £500-per-day fine for non-compliance would be laughed off by corrupt officials.
“Where prosecution isn’t really an option, because for instance the owner lives in Russia, which doesn’t extradite its citizens, then you’re left with fines only. £500 a day is small change for those with deep pockets,” he said.
“We’re calling for graduated sanctions, increasing fines over a certain period, with the prospect of confiscation where non-compliance is stubborn.”
The timescale for the register being brought into force remains vague. The government announcement says
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