U.K. Cuts Planned Deadline for Foreigners to Declare Property
U.K. Cuts Planned Deadline for Foreigners to Declare Property
(Bloomberg) -- Boris Johnson’s government proposed to shorten by a year a planned grace period for foreign owners of U.K. property to register their interests, amid calls to accelerate action to tackle money laundering in the wake of Russia’s invasion of Ukraine.
Under legislation to be debated Monday in the House of Commons, the government plans to set up a register identifying the ultimate foreign owners of U.K. real estate, preventing them from hiding behind shell companies.
Under the draft bill, individuals would have 18 months to join the register, leading to charges from the opposition Labour Party that the grace period would allow wealthy foreigners -- and Russians in particular -- time to launder their money out of the U.K. before the new requirements set in.
But the Foreign Office late Friday said it would shorten that deadline to six months -- a proposal reported earlier by Bloomberg.
It also proposed new powers to more rapidly sanction those who have been punished already by U.K. allies, including the European Union, the U.S. or Canada. Johnson said the proposals will enable the U.K. to strengthen further its sanctions against Russia following the invasion of Ukraine -- already the most robust package of measures it’s imposed on another nation.
“We’re bolstering this with new powers in our arsenal to go further and faster,” Johnson said in an emailed statement. “We will ramp up the pressure on those criminal elites trying to launder money on U.K. soil and close the net on corruption. They will have nowhere to hide.”
‘Appropriateness’
The government also proposed removing a test of “appropriateness” when designating individuals for sanctions, enabling ministers to act more quickly. The change follows further criticism levied by Labour against the government for only sanctioning 11 wealthy Russians -- as well as Russian President Vladimir Putin and Foreign Minister Sergei Lavrov -- since last week’s invasion, while allies have moved more quickly.
The government also plans a fivefold increase in the daily fine for non-compliance with the property register to 2,500 pounds ($3,310).
The move comes just two days after Labour Party Leader Keir Starmer asked Johnson in the House of Commons: “Why are we giving Putin’s cronies 18 months to quietly launder their money out of the U.K. property market and into another safe haven?”
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Labour has proposed cutting the time gap to just 28 days. But ministers are concerned about striking the right balance between targeting foreign criminals and trapping legitimate, law-abiding owners, according to a person familiar with the matter. Under the legislation, failure to meet the registration deadline is an offense opening up owners to potential imprisonment or a fine.
Russia’s invasion of Ukraine forced the government to accelerate plans to introduce the register, which had been on the back-burner for successive Tory administrations since 2016. The aim is to bring transparency to property ownership and end concerns among Tory and Labour lawmakers alike that London has become a “laundromat” for wealthy foreigners -- and Russians in particular -- to clean up illicit wealth.
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