Real Estate is Becoming a Primary Target for Money Launderers in the UK
According to a government report, Luxury London homes are a new method to launder illicit funds. The National Crime Agency is stepping up to investigate the illegally gained money flooding into the country.
The National Risk Assessment of Money Laundering and Terrorist Financing in the 2020 report highlighted the rising threat of money laundering and terror financing through Luxury London homes: “Corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds.”
Treasury and the Home Office has put together a report stating that there has been an increase in overseas buyers investing in property in the UK: “The high amounts of money that can be moved in one transaction and the appreciation in value, along with the enhanced lifestyle, makes them very attractive to criminals.”
The real estate agents have now upgraded their risk scoring to medium. However, some agents in the market of luxury homes have failed to comply with the regulations of anti-money laundering. Many real estate agents have not registered with HM Revenue and Customs for anti-money-laundering supervision.
National risk assessment by @USTreasury @ukhomeoffice details how the real estate sector has been used to #launder funds @guardian https://t.co/M0gskIZOCn
— Global Financial Integrity (@IllicitFlows) December 23, 2020
A report by the Treasury states that it is hard to identify the source of money due to the complex system of shell companies. These entities are registered in the overseas jurisdiction, and due to the anonymity nature, the source of funds is obscured.
Jerry Walters, the managing director of FCS Compliance says that more than five billion pounds of the UK’s property have been bought with illegal funds. Transparency International suggests that in order to eliminate such activities, the government should reveal the identities of overseas owners of such properties.
