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Since 2016, almost £6 billion in suspect funds has been channeled through companies registered in the British Overseas Territories to buy British properties, a new analysis has found.
The research by campaign group Transparency International UK found that 494 British properties worth a total of £5.9 billion had been purchased through organizations registered in the overseas territories over the past eight years.
According to TI, each property included was either owned by a person politically exposed in a jurisdiction with a high risk of corruption; had been sanctioned by the British government since its purchase; or was subsequently charged or convicted of, or is alleged to have committed, financial crimes.
The British Virgin Islands was found to be the origin of more than 90 percent of the funds, equivalent to a value of £5.5 billion, leading to the purchase of 475 properties, mainly in London.
The data is compiled from a combination of court documents, land registry and company data, as well as leaks such as the Pandora Papers, and is broken down by parliamentary constituency.
TI estimated that the new figures relating to the British Overseas Territories have brought the total amount of suspect funds invested in UK real estate since 2016 to £11.1 billion.
Margot Mollat, senior policy manager at TI UK, said the research highlights the “role of the overseas territories as global hubs for suspect and illicit wealth”.
“The secrecy afforded by these jurisdictions has made them a favorite destination for corrupt individuals seeking to conceal criminal acts and enjoy the proceeds of their crimes with impunity,” she added.
The Cities of London and Westminster constituency saw the highest value of properties purchased, with a total of £3.61 billion invested in 224 buildings since 2016.
This was followed by Kensington and Bayswater, where 83 properties worth a total of £1.1 billion were purchased over the period.
MP Joe Powell, who was elected to represent the constituency in July, recently led a cross-party group of MPs in writing to the Secretary of State, urging him to tackle tax evasion in the areas.
The letter asked Foreign Secretary David Lammy to push for a faster establishment of public registers of beneficial ownership in the areas. The MPs argued that publishing the registers, which record who ultimately owns or controls a company, would better enable investigators to track money held abroad to uncover economic crime.
While some areas, such as Montserrat, have introduced registries, others, such as the Cayman Islands and the British Virgin Islands, have postponed this until June 2025.
Powell, who is also chairman of the All-Party Parliamentary Group for Anti-Corruption and Responsible Tax, said “dirty money in London properties is worsening the housing crisis, hollowing out communities and bad for democracy”.
“[We need] full transparency on assets protected in trusts, public registers of corporate ownership in the Overseas Territories and Crown Dependent Territories, and for UK enforcement agencies to step up their investigations,” he added.
A spokesperson for the BVI said it is “unwavering in its commitment to combating money laundering, tax evasion and all forms of illicit financial activity.
“Working with the UK Government, the BVI has established a dedicated sanctions unit to ensure compliance with international financial sanctions. Furthermore, we are advancing efforts to increase transparency by preparing to provide access to beneficial ownership information in cases where a legitimate interest is demonstrated,” she added.